Still, he’s not ready to count Adelphia out. “They have some great markets, and very valuable assets,” he notes. “The key is how quickly they can emerge from bankruptcy, and how quickly they can upgrade their systems.” Unfortunately, the answer to that question could be later rather than sooner, thanks to the amount of litigation holding up the reorganization plan.
Even when Adelphia does exit Chapter 11, it must win back its credibility with customers and investors. “There is no question that what happened at Adelphia hurt it with customers,” says Stephen Effros, president of cable-TV consultants Effros Communications. And it happened at a critical time in the industry. Many cable companies are looking to become one-stop communications providers for the home, offering cable-TV, phone, and Internet service. “Customers need to have a lot of trust in a provider before they go to a single supplier,” says Effros. “That means companies need to provide the best customer service possible.”
Adelphia can do that, he says, only by first regaining the trust of its employees. Wittman, who spent the first few days of her tenure meeting with employees and customers, hopes the decentralization of the company will enable employees to take more ownership of their jobs. She says morale is on the mend: “People are very charged up about getting this thing fixed.”
Adelphia hopes to deliver a preliminary reorganization plan to its DIP creditors by the end of 2003, and is pushing to emerge from bankruptcy in mid-2004. Wittman is confident that the company will emerge in good condition. “This is a really terrific business,” she says. “It should not have been in bankruptcy in the first place.” She is also sure that what happened at Adelphia can never happen again: “We have to be beyond reproach, on every front.”
Joseph McCafferty is news editor of CFO.
May: John, James, Michael, and Timothy Rigas resign as Adelphia executives and directors.
June 25: Adelphia files voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. That same day, lenders agree to provide $1.5 billion in debtor-in-possession (DIP) financing.
June 28: Court grants Adelphia immediate access to $500 million of $1.5 billion DIP financing.
July 24: Adelphia files lawsuit against John Rigas and other former executives and board members of Adelphia.
August 23: Adelphia’s $1.5 billion DIP financing is approved.
November 6: Adelphia files a lawsuit against its former auditors, Deloitte & Touche LLP.
January 17: Adelphia announces it has entered into agreements with William Schleyer and Ronald Cooper.
January 28: Adelphia board authorizes the move of corporate headquarters to Denver.
March 7: Bankruptcy court approves employment agreements of chairman and CEO Schleyer and president and COO Cooper.
March 21: Adelphia names Vanessa Wittman CFO.
March 25: Adelphia announces the resignation of CFO Christopher Dunstan.
May 13: Adelphia elects two additional directors.