Adelphia finally files

Settle in for a long slow grind, because nothing will happen quickly now that Adelphia Communications has finally lumbered into bankruptcy court.

The scandal-ridden MSO filed for Chapter 11 bankruptcy protection last Wednesday, choosing U.S. District Court in Manhattan as the venue rather than a Pennsylvania court closer to the company's Coudersport, Pa., headquarters but farther away from the bankers and lawyers that will wrestle the company through. Adelphia said it has debts of $18.6 billion and assets with a book value of $24 billion.

Since the whole point of Chapter 11 is to shelter the company from clamoring creditors, Chairman Erkie Kailbourne said Adelphia's operations will continue semi-normally. On Thursday, the court allowed the company to continue to pay employees, pay local franchise authorities money owed them before the filing, and pay any deposits owed to customers. The company has secured $1.5 billion in financing from lenders that will be repaid ahead of even the most senior pre-filing creditors.

Among those creditors are cable networks and equipment vendors owed more than $400 million. Since they're unsecured and among the last to be paid out of the bankruptcy estate, they will likely collect five cents to 15 cents on the dollar.

Adelphia is likely to try to sell some of its cable systems serving 5.6 million subscribers, but that will be a slow process. The big wrestling match will be among bondholders, which analysts believe might collect 30 cents to 60 cents on the dollar. They'll be looking to jockey ahead of each another and challenge senior lenders ahead of them in the line of creditors to be repaid.