In Re Adelphia Communications Corp.
United States Bankruptcy Court for the Southern District of New York
359 Bankr. 54 (2006)
- Written by Rose VanHofwegen, JD
Facts
Cable television giant Adelphia Communications Corp. (ACC) and its subsidiaries (debtors) filed for reorganization under Chapter 11. A group of creditors holding ACC senior notes (bondholders) voted against the reorganization plan, while other creditors holding both ACC senior notes and notes owed by ACC subsidiaries (targets) voted to support the plan. The bondholders moved to disqualify by designation the targets’ votes, arguing that the targets (1) extracted special consideration for themselves in the proposed plan in the form of releases, exculpation, and fee awards or enticing “carrots” awarded only to members of their classes who voted for the plan; (2) engaged in overreaching behavior in soliciting plan support; and (3) voted their ACC claims for ulterior purposes because they voted to benefit their interests in subsidiaries instead of ACC or held claims in different debtors with inherently conflicting interests.
Rule of Law
Issue
Holding and Reasoning (Gerber, J.)
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