Inter-creditor strife threatens the bankruptcy court hearing in the sense that a) The reorganisation cannot take place

till litigation is settled. This will lead to delay in the reorganisation and possibly the offers might be taken back. b) The amount due to the creditors is still disputed and so might escalate. No company, including Time Warner and/or Comcast would want to take on this disputed debt. And so, the litigation needs to be resolved before any further step can be taken. At the same time, this cannot happen unless the creditors reach common ground on contentious issues. The issues of contention among the creditors are as follows: 1. Consolidation Structure Due to the haphazard ownership and subsidiary structure within Adelphia, there is an entity, Century Cable Holding, whose assets and liabilities under dispute by two creditor groups. Further adding to the issue is the fact that the assets in themselves are equity for another company while the liabilities are inter-company claims. Since the liabilities are also under dispute in certain cases, while the assets might have low to negligible value at the current time, it is possible that these claims will only get more entangled. 2. Inter-company claims The treatment of inter-company claims is another issue. There are differing views in the manner this should be treated. There are the following options : a) Treatment with other debt to third party lenders. b) Treatment as debt but subordinated to third party lenders c) Treatment as equity Of these, the claim of subordination might have been valid, if the entire organisation took debt as one. However, since within the structure, there are several holdings and subsidiaries which took debt on their own accord and have independent operations, the claim of subordination does not seem valid. The option of common equity might not be acceptable to the creditors since there is no guarantee of returns. However, for some debtors, this may seem like an opportunity to earn abnormal profits and they might want to get equity. So, treatment as regular debt seems to be the other viable option, since it is a guaranteed return. However, this is for risk averse creditors, and some creditors might not agree to it. 3. Fraudulent Conveyances The Holding Company creditors and the Arahova creditors are disputing certain transfers made within the company due to establishment of borrowing facilities. Since restructuring before the filing of bankruptcy might count as fraudulence in certain cases, this is being disputed by both companies. However, both creditors have gained due to these conveyances and so we recommend an out of court settlement for this issue instead of dragging it on.