Summary
Local franchise authorities want to know the impact that a bankruptcy will have on continued service in their areas. LFAs will also want to know whether they will have a seat in the creditor's committee.
Analysis
When Adelphia filed for bankruptcy in June 2005, local franchise authorities in Virginia scrambled for information to determine what impact the filing would have on service delivery in the state. LFAs wanted to know whether a restructure would result in a sale of the company (which it did) and if so, to whom. LFAs wanted to know whether their franchise agreements would be honored during and after the bankruptcy. LFAs, like Fairfax County, Virginia, were concerned about the continued funding of their institutional networks as well as continued service for subscribers. LFAs will also want to clarify whether they will be treated as creditors given their status as municipalities.
LFAs in Charter's service areas will face the same issues. Their biggest impediment, should a bankruptcy occur, will be the availability of personnel to monitor proceedings and funds to secure outside counsel.
Alton E. Drew
