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The U.S. assets of Adelphia are being acquired by Time Warner and Comcast for $12.7 billion in cash and 16% of Time Warner Cable’s common stock.

The transaction is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York and customary closing conditions. Adelphia will file a revised Plan of Reorganization and Draft Disclosure Statement with the Bankruptcy Court that reflects the terms of the transaction.

A Disclosure Statement hearing must be held, followed by creditor balloting on the plan and ultimately a confirmation hearing before the Bankruptcy Court leading to a confirmed Plan of Reorganization. Parallel to the bankruptcy process, for the deal to close it will require approvals of the FCC, the Justice Department (Hart-Scott-Rodino) and, where required, local franchising authorities. Subject to all necessary approvals, the deal is expected to close in approximately nine to 12 months.

Under the terms of the transaction, approved by the boards of directors of Adelphia, Time Warner and Comcast, Adelphia’s stakeholders will receive $9.2 billion in cash and 16 percent of Time Warner Cable’s common equity from Time Warner.

In addition, Comcast will pay Adelphia $3.5 billion in cash. Under proposed transactions between Time Warner and Comcast, the two companies will swap cable systems to enhance their respective geographic clusters and unwind Comcast’s investments in Time Warner Cable and Time Warner Entertainment Company, L.P. in an efficient and mutually beneficial way.

The Official Committee of the Unsecured Creditors supported Adelphia in moving forward with this transaction.

Bill Schleyer, chairman and CEO of Adelphia, said, “After extensive review of all options for the company, Adelphia’s Board of Directors has determined that this transaction delivers the maximum value to its bankruptcy constituents. We believe that this option is superior to Adelphia emerging as a standalone company. It is also a positive outcome for our cable customers, who will benefit from continuing considerable investment in our cable assets. The significant interest in Adelphia is a testament to the dramatic improvements our employees have made to the company and its assets during the past two years.”

The agreement does not include Adelphia’s cable system partnership in Puerto Rico.

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