================================================================= ADELPHIA BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2002 (ISSN XXXX-XXXX) March 28, 2002 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- ADELPHIA BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Any re-mailing of ADELPHIA BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO ADELPHIA BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF ADELPHIA BUSINESS SOLUTIONS [00002] CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2001 [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] ADELPHIA BUSINESS SOLUTIONS CHAPTER 11 DATABASE [00005] LIST OF ABIZ'S 20-LARGEST UNSECURED CREDITORS [00006] LIST OF ABIZ OPERATIONS' 20-LARGEST UNSECURED CREDITORS [00007] LIST OF ABIZ ATLANTIC'S 20-LARGEST UNSECURED CREDITORS [00008] LIST OF ABIZ FLORIDA'S 20-LARGEST UNSECURED CREDITORS [00009] LIST OF ABIZ KENTUCKY'S 20-LARGEST UNSECURED CREDITORS [00010] LIST OF ABIZ TENNESSEE'S 20-LARGEST UNSECURED CREDITORS [00011] LIST OF ABIZ VERMONT'S 20-LARGEST UNSECURED CREDITORS [00012] DEBTORS' MOTION TO OBTAIN $135,000,000 OF DIP FINANCING KEY DATE CALENDAR ----------------- 03/27/02 Voluntary Petition Date 04/11/02 Deadline for filing Schedules of Assets and Liabilities 04/11/02 Deadline for filing Statement of Financial Affairs 04/11/02 Deadline for filing Lists of Leases and Contracts 04/16/02 Deadline to provide Utilities with adequate assurance 05/26/02 Deadline to make decisions about lease dispositions 06/25/02 Deadline to remove actions pursuant to F.R.B.P. 9027 07/25/02 Expiration of Debtor's Exclusive Plan Proposal Period 09/23/02 Expiration of Debtor's Exclusive Solicitation Period 03/26/04 Deadline for Debtor's Commencement of Avoidance Actions 03/26/04 Expiration of ACC-Backed DIP Financing Facility Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO ADELPHIA BANKRUPTCY NEWS ----------------------------------------------------------------- ADELPHIA BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of ADELPHIA BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. To continue receiving ADELPHIA BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to: Bankruptcy Creditors' Service, Inc. 24 Perdicaris Place Trenton, NJ 08618 Telephone (609) 392-0900 Fax (609) 392-0040 E-mail: peter@bankrupt.com We have published similar newsletters tracking billion-dollar insolvency proceedings since 1990, starting with Federated Department Stores. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) ADELPHIA BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of ADELPHIA BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF ADELPHIA BUSINESS SOLUTIONS ----------------------------------------------------------------- Adelphia Business Solutions, Inc. 1 North Main Street Coudersport, Pennsylvania 16915-1141 Telephone (814) 274-9830 Fax (814) 274-9863 http://www.adelphia-abs.com Adelphia Business Solutions, Inc. (Nasdaq: ABIZ) is a leading provider of facilities-based integrated communications services to businesses, governmental customers, educational end users and other communications services providers throughout the United States. The Company provides customers with communications services such as local switch dial tone (also known as local phone service), long-distance service, high-speed data transmission, and Internet connectivity. ABIZ customers have a choice of receiving these services separately or as bundled packages, which are typically priced at a discount when compared to the price of the separate services. In order to serve its customers' broad and expanding communications needs, the Company has assembled a diverse collection of high-bandwidth, local, and long-haul network assets. ABIZ is integrating these assets with advanced communications technologies and services in order to provide comprehensive end-to-end communications services over its national network. As of December 31, 2001, ABIZ offered communications services in approximately 60 markets, including many of the top 40 metropolitan statistical areas in the United States. Today, ABIZ employs approximately 1,717 workers on an aggregate basis. In addition, in support of their operations, the Company regularly uses the services of their local partners and contract technicians for the installation and maintenance of their networks. As is typical of most telecommunications companies, ABIZ required a significant initial cash infusion to develop, construct, expand, and operate its local networks. Over the past several years, the Company has incurred substantial capital expenditures in an effort to develop its business capabilities, including installation and expansion of the networks, development of new markets, and construction and expansion of a network operations control center. Similar to most telecommunications companies, ABS' business plan contemplated a negative operating cash flow until the network was substantially complete and the Company established a firm customer base. ABIZ succeeded in that plan, reporting negative operating cash flows since its inception . . . and that pattern will continue. In the next 30-day period, the Company projects: Adelphia Business Solutions, Inc. Estimated Cash Receipts and Disbursements For the 30-Day Period Commending March 27, 2002 Estimated Cash Receipts $14,100,000 Estimated Cash Disbursements 31,800,000 ----------- Estimated Net Cash Uses $17,700,000 =========== The cash disbursements will include weekly payroll obligations approximating: $1,650,000 to Employees (Excluding Officers, Directors, and Stockholders); $20,000 to Officers, Directors, and Stockholders; and $975,000 to Financial and Business Consultants. ABIZ's initial network expansion plan anticipated operational growth in 175 to 200 new markets. In December 2000, ABIZ faced an industry-pervasive capital crisis and revised the overall network expansion plan by reducing the number of planned new markets to 80. As a result of that development, ABIZ reduced its aggregate national staff by approximately 8%. Thereafter, in 2001, ABIZ further contracted its network expansion plan to 50-60 new markets. "Despite the Company's efforts to curtail expenditures by revising the network expansion plan," Edward E. Babcock, ABIZ's Vice President of Finance explains, "a confluence of factors, including operating losses, the substantial capital investments necessary to develop the business, and debt service payments, has historically resulted, and continues to result, in substantial negative cash flow." "Absent the commencement of these chapter 11 cases," Mr. Babcock continues, "the Debtors' financial condition would continue to deteriorate. The operation and development of the Debtors' existing markets, and any additional investment in new products or services will require significant capital expenditures and a restructuring of the Debtors' indebtedness." ABIZ did not make the March 1, 2002 interest payment on its 12-1/4% Senior Secured Notes due 2004, because the Company didn't have the cash. The Company concluded that a financial restructuring could best be achieved through the chapter 11 process and that course of action is the most viable alternative for resolving the Company's financial difficulties. Prior to filing for bankruptcy protection, the Company held talks with an Ad Hoc Committee holding approximately 80% of the 12-1/4% Senior Secured Notes. ABIZ estimates that the holders of the 12-1/4% Notes are under water by more than $150,000,000. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, provides the Ad Hoc Committee with legal advice and Houlihan, Lokey, Howard & Zukin provides the Ad Hoc Committee with financial advisory services. There's no word as to whether the holders of the unsecured 13% Senior Discount Notes due 2003 and 12% Senior Subordinated Notes due 2007 have organized any informal committees. ----------------------------------------------------------------- [00002] CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2001 ----------------------------------------------------------------- ADELPHIA BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) At September 30, 2001 ASSETS: Current assets: Cash and cash equivalents ............... $ 506,000 Assets held for sale to affiliates ...... 100,490,000 Accounts receivable - net ............... 102,197,000 Other current assets .................... 33,385,000 -------------- Total current assets ............... 236,578,000 Restricted cash .............................. 18,900,000 Investments .................................. 54,829,000 Property, plant and equipment - net .......... 1,671,529,000 Other assets - net ........................... 144,498,000 -------------- Total .............................. $ 2,126,334,000 =============== LIABILITIES, PREFERRED STOCK, COMMON STOCK AND OTHER STOCKHOLDERS' (DEFICIENCY) EQUITY: Current liabilities: Accounts payable ....................... $ 86,408,000 Deposits on assets held for sale to affiliates ......................... 61,225,000 Due to parent - net .................... -- Due to affiliates - net ................ 27,747,000 Accrued interest ....................... 50,005,000 Accrued interest - parent .............. 9,442,000 Other current liabilities .............. 30,169,000 -------------- Total current liabilities .......... 264,996,000 13% Senior discount notes due 2003 ........... 303,840,000 12 1/4% Senior secured notes due 2004 ........ 250,000,000 12% Senior subordinated notes due 2007 ....... 300,000,000 Note payable ................................. 494,085,000 Other debt ................................... 41,422,000 -------------- Total liabilities .................. 1,654,343,000 -------------- 12 7/8% Senior exchangeable redeemable preferred stock ............................. 327,360,000 -------------- Common stock and other stockholders' (deficiency) equity: Class A common stock, $0.01 par value, 800,000,000 shares authorized, 47,772,906 shares outstanding ............. 478,000 Class B common stock, $0.01 par value, 400,000,000 shares authorized, 86,744,378 shares outstanding ............. 867,000 Additional paid in capital ................. 1,109,430,000 Class B common stock warrants .............. -- Unearned stock compensation ................ (2,836,000) Accumulated deficit ........................ (963,308,000) -------------- Total common stock and other stockholders' equity .............. 144,631,000 -------------- Total .............................. $ 2,126,334,000 ============== *** ABIZ's Vice President of Finance, Edward E. Babcock, and *** John B. Glicksman, ABIZ's Vice President & General Counsel, *** indicate that as of December 31, 2001, the Debtors' asset *** base has declined to approximately $944.75 million and ABIZ's *** liabilities were reduced to approximately $1.44 billion. ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- COUDERSPORT, Pennsylvania -- March 27, 2002 -- Adelphia Business Solutions, Inc. (Nasdaq: ABIZ) ("ABS") announced today that ABS and certain of its wholly-owned subsidiaries have commenced voluntary cases under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. ABS also announced that it has reached an agreement with Adelphia Communications Corporation and a Rigas family affiliate to provide debtor-in-possession (DIP) financing in the aggregate principal amount of up to $135 million. This DIP financing will provide an immediate source of funds to ABS, enabling it to satisfy the customary obligations associated with the daily operation of its business, including the timely payment of new inventory shipments, employee wages and other obligations. The DIP financing is subject to approval of the Bankruptcy Court. ABS is engaged in advanced negotiations with the holders of its 12-1/4% Senior Secured Notes due 2004 regarding the treatment of their claims. Any resolution of these negotiations will also be subject to approval of the Bankruptcy Court. In commencing these chapter 11 cases, ABS concluded that a financial restructuring, which could best be achieved through the chapter 11 process, was the most viable alternative for resolving its financial difficulties, given its capital requirements, its debt service obligations, the virtual shutdown of the telecommunications capital markets and the decline in the telecommunications industry generally. ----------------------------------------------------------------- [00004] ADELPHIA BUSINESS SOLUTIONS CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtor entities filing separate chapter 11 petitions: Case No. Debtor Entity -------- ------------- 02-11388 Adelphia Business Solutions Operations, Inc. 02-11389 Adelphia Business Solutions, Inc. 02-11390 Adelphia Business Solutions of Atlantic, Inc. 02-11391 Adelphia Business Solutions of Florida, Inc. 02-11392 Adelphia Business Solutions of Kentucky, Inc. 02-11393 Adelphia Business Solutions of Tennessee, Inc. 02-11394 Adelphia Business Solutions of Vermont, Inc. Petition Date: March 27, 2002 U.S. Bankruptcy Court: United States Bankruptcy Court Southern District of New York Alexander Hamilton Custom House One Bowling Green, 5th Floor New York, New York 10004-1408 Telephone (212) 668-2870 Bankruptcy Judge: The Honorable Stuart M. Bernstein Debtors' Counsel: Harvey R. Miller, Esq. Judy G.Z. Liu, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone (212) 310-8000 Debtors' Financial Advisor: UBS Warburg 299 Park Avenue, 35th Floor New York, New York 10171 U.S. Trustee: Carolyn S. Schwartz United States Trustee for Region 2 33 Whitehall Street, Suite 2100 New York, NY 10004 Telephone (212) 510-0500 - and - Mary Elizabeth Tom, Esq. Assistant United States Trustee 33 Whitehall Street, 22nd Floor New York, NY 10004 Telephone (212) 510-0500 ----------------------------------------------------------------- [00005] LIST OF ABIZ'S 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Creditor Nature of Claim Claim Amount -------- --------------- ------------ Bank of New York Indenture $303,840,000 Corporate Trust Division Trustee - 13% 5 Penn Plaza - 13th Floor Senior Discount New York, NY 10001-1810 Notes due 2003 Attn: Mr. Paul J. Schmalzel (212) 896-7172 Bank of New York Indenture $300,000,000 Corporate Trust Division Trustee - 12% 5 Penn Plaza - 13th Floor Senior New York, NY 10001-1810 Subordinated Attn: Mr. Paul J. Schmalzel Notes due 2007 (212) 896-7172 Bank of New York Indenture The Debtor Corporate Trust Division Trustee - 12 estimates that 5 Penn Plaza - 13th Floor 1/4% Senior the unsecured New York, NY 10001-1810 Secured deficiency Attn: Mr. Paul J. Schmalzel Notes due 2004 claim is in (212) 896-7172 excess of $150,000,000 Sprint Trade Debt $3,498,311 900 Springmill Street Mansfield, OH 44906 (419) 755-7466 Cumberland Promotion Trade Debt $500,000 Tennessee Football LP One Titans Way Nashville, TN 37213 Attn. Mr. Don Maclachlan TSI Trade Debt $461,651 12094 Collections Center Drive Lockbox #12094 Chicago, IL 60693 Attn: Ken Korver 350 CW Associates LP Trade Debt $136,354 P.O. Box 607 California, PA 15419-0607 (724) 228-0987 Verizon Trade Debt $16,420 P.O. Box 4833 Trenton, NJ 08650-4833 Verizon Trade Debt $11,083 P.O. Box 4430 Albany, NY 12204-0430 BellSouth Trade Debt $7,868 P.O. Box 33009 Charlotte, NC 28243-0001 De Lage Financial Serv. Trade Debt $2,387 P.O. Box 41601 Philadelphia, PA 19101-1601 Reference #92471 MCI Worldcom Trade Debt $1,825 P.O. Box 96023 Charlotte, NC 28296-0023 Edward Mioduski PM Trade Debt $1,600 71 Dinsmore Ave. Burgettstown, PA 15021 Attn: Edward (724) 743-9499 Keystone Business Machines Trade Debt $1,305 P.O. Box 41601 Philadelphia, PA 19101-1601 Southwestern Bell Trade Debt $1,062 P.O. Box 4706 Houston, TX 77210-4706 De Lage Financial Serv. Trade Debt $1,022 P.O. Box 41601 Philadelphia, PA 19101-1601 Attn: Al Paige (800) 442-2086 Verizon Trade Debt $763 P.O. Box 28001 Lehigh Valley, PA 18002 Diskriter Inc. Trade Debt $675 P.O. Box 360243 Pittsburgh, PA 15251-6243 (412) 344-9700 Verizon Trade Debt $572 P.O. Box 15124 Albany, NY 12212-5124 Southwestern Bell Telephone Trade Debt $519 P.O. Box 650661 Dallas, TX 75265-0661 ----------------------------------------------------------------- [00006] LIST OF ABIZ OPERATIONS' 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Creditor Nature of Claim Claim Amount -------- --------------- ------------ Bank of America N.A. Bank Loan $500,000,000 901 Main Street 64th Floor Plaza Dallas, TX 75283 Attn: Thomas Carter (214) 209-0924 - and - Chase Manhattan Bank 270 Park Avenue 37th Floor New York, NY 10017 Attn: Douglas A. Hurst (212) 270-1132 Fujitsu Trade Debt $18,475,381 P.O. Box 13730 Newark, NJ 07188-0730 (214) 690-6000 Bank Loan Verizon Trade Debt $6,309,429 P.O. Box 8585 Philadelphia, PA 19173-0001 Level 3 Com Trade Debt $6,099,660 1025 Eldorado Blvd. Broomfield, CO 80021 Attn: Tracy Holick Ameritech Trade Debt $4,947,264 208 S. Akard Room 504.12 Dallas, TX 75202 Attn: Valerie Fountain (214) 464-7900 BellSouth Trade Debt $2,225,846 Pro-Cabs Cabs Payment Receipt P.O. Box 105373 Atlanta, GA 30348 Grande Communications Inc. Trade Debt $1,783,962 Attn: Revenue Accounting 401 Carlson Circle San Marcos, TX 78666 Sharon Wigley (512) 878-5448 Broadwing Communications Serv. Trade Debt $1,341,229 112 Capital of Taxes Highway Austin, TX 78746-6426 Attn: Ernest Williams (877) WING-777 Convergent Networks Trade Debt $1,283,266 900 Chelmsford St. Tower 3 Lowell, MA 01851 (978) 323-3513 Pirelli Cable Corp. Trade Debt $939,943 P.O. Box 360869 Pittsburgh, PA 15251-6869 Attn: Frank (803) 951-4800 Metromedia Fiber Trade Debt $871,626 Network Services Inc. P.O. BOX 7247-6887 Philadelphia, PA 19170-6887 (914) 421-6700 SNET Diversified Group Inc. Trade Debt $743,355 P.O. Box 9076 New Haven, CT 06531-0076 Attn: Kathie Kelly (203) 694-7234 LG International (America) Inc. Trade Debt $712,124 P.O. Box 23527 Newark, NJ 07 189 (201) 816-2235 AT&T Trade Debt $627,439 P.O. Box 78425 Phoenix, AZ 85062-8425 Southwestern Bell Trade Debt $567,548 208 S. Akard Room 504.12 Dallas, TX 75202 Attn: Valerie Fountain (214) 464-7900 Qwest Trade Debt $505,864 P.O. Box 3400 Omaha. NE 68103 Tellabs Trade Debt $403,000 P.O. Box 99206 Chicago, IL 60693-9206 Attn: Cindy Cirlincione Carrier Access Corporation Trade Debt $349,326 Dept 1006 Denver, CO 80263-1006 Attn: Marion Lowstroh (303) 442-5455 ext. 5558 Ameritech Reseller Services Trade Debt $262,674 P.O. Box 1838 Saginaw, MI 48605-1838 (414) 390-2600 Sprint Trade Debt $249,774 P.O. Box 101465 Atlanta, GA 30392 (800) 366-0548 ----------------------------------------------------------------- [00007] LIST OF ABIZ ATLANTIC'S 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- None. ----------------------------------------------------------------- [00008] LIST OF ABIZ FLORIDA'S 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- None. ----------------------------------------------------------------- [00009] LIST OF ABIZ KENTUCKY'S 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Creditor Nature of Claim Claim Amount -------- --------------- ------------ Insight Communications Inc. Trade Debt $2,005,581 810 Seventh Avenue 40th Floor New York, NY 10019 (917) 286-2303 BellSouth Trade Debt $1,498,709 Pro-Cabs Cabs Payment Receipt P.O. Box 105373 Atlanta, GA 30348 Fujitsu Trade Debt $1,354,925 P.O. Box 13730 Newark, NJ 07188-0730 (214) 690-6000 AT&T Trade Debt $91,704 P.O. Box 9001310 Louisville, KY 40290-1310 Orius Central Office Services Trade Debt $78,025 LISN Inc. P.O. Box 402401 Atlanta, GA 30384-2401 (440) 984-2511 Sprint Trade Debt $62,332 P.O. Box 101465 Atlanta, GA 30392 (800) 366-0548 Verizon Trade Debt $58,002 P.O. Box 920041 Dallas, TX 75392-0041 SNET Diversified Trade Debt $37,640 Group Inc. P.O. Box 9076 New Haven, CT 06531-0076 Attn: Kathie Kelly (203) 694-7234 Deloitte & Touche Trade Debt $36,250 5550 LBJ Freeway Dallas, TX 75240 Attn: Karen Manera (972) 776-6000 Walker & Associates Inc. Trade Debt $29,486 P.O. Box 75 1578 Charlotte, NC 28275 Attn: Teri ext. 2699 (800) 472-1746 Illuminet Inc. Trade Debt $28,094 4501 Inteco Loop S.E. P.O. Box 2909 Olympia, WA 98507 Insight Communications Trade Debt $24,024 2544 Palumbo Dr. Lexington, KY 40509 (606) 514-1400 TJ Associates Trade Debt $19,519 41 6 West Muhammad Ali Blvd. Louisville, KY 40202 (502) 581-8800 Verizon South Trade Debt $19,265 P.O. Box 101687 Atlanta, GA 30392-1687 (800) 483-6222 Broadwing Communications Service Trade Debt $13,491 1122 Capital of Texas Highway Austin, TX 78746-6426 Attn: Ernest Williams Intermedia Communications Trade Debt $8,198 P.O. Box 915238 Collections Dept. Orlando, FL 32891-5238 Attn: Mark Botwinick Webb Properties Trade Debt $6,287 c/o Haymaker Co., Inc., Receiver 3120 Wall St., Suite 300 Lexington, KY 40513 Austin, TX 78746-6426 ADC Communications Inc. Trade Debt $4,221 P.O. Box 93283 Chicago, IL 60673-3283 Attn: Kris Moyer (800) 366-3891 Kentucky Towers Trade Debt $4,217 100 Kentucky Towers Louisville, KY 40202 Domino Partners Trade Debt $4,125 427-429 E. Market St. Louisville, KY 40202 Attn: Belinda R. Baser (502) 562-0088 ----------------------------------------------------------------- [00010] LIST OF ABIZ TENNESSEE'S 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- None. ----------------------------------------------------------------- [00011] LIST OF ABIZ VERMONT'S 20-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Creditor Nature of Claim Claim Amount -------- --------------- ------------ Fujitsu Trade Debt $742,959 P.O. Box 13730 Newark, NJ 07188-0730 (214) 690-6000 Verizon Trade Debt $208,810 P.O. Box 4430 Albany, NY 12204-0430 SNET Diversified Group Inc. Trade Debt $150,748 P.O. Box 9076 New Haven, CT 06531-0076 Attn: Kathie Kelly (203) 694-7234 Vermont Dept. of Taxes Trade Debt $138,122 109 State Street Montpelier, VT 05609-1401 Sprint Trade Debt $54,130 P.O. Box 101465 Atlanta, GA 30392 (800) 366-0548 AT&T Trade Debt $53,419 P.O. Box 78425 Phoenix, AZ 85062-8425 Engineers Construction Inc. Trade Debt $16,928 10 Engineers Drive P.O. Box 2187 South Burlington, VT 05407 (802) 863-6389 Walker and Associates, Inc. Trade Debt $16,079 P.O. Box 751578 Charlotte, NC 28275 (800) 472-1746 White Mountain Construction Trade Debt $11,756 Nations Bank 225 N. Calvert St. Lock-Box 631420 Baltimore, MD 21202 (603) 736-4766 Edlund Company Property Acct. Trade Debt $11,501 c/o Investment Properties, Inc. P.O. Box 929 Burlington, VT 05402-0929 Broadwing Communications Serv. Trade Debt $10,221 1122 Capital of Texas Highway Austin, TX 78746-6426 Attn: Ernest Williams Verizon Trade Debt $7,851 P.O. Box 15123 Albany, NY 12212-5123 Catamount/Woodlands LLC Trade Debt $5,454 c/o Redstone Commercial Group One Main Street Burlington, VT 05401 (802) 658-7400 Intermedia Communications Trade Debt $4,837 P.O. Box 915238 Collections Dept. Orlando, FL 32891-5238 Attn: Mark Botwinick Green Mountain Power Corp. Trade Debt $1,477 P.O. Box 1915 Brattleboro, VT 05302-1915 Jacob Ciborowski Trust Trade Debt $1,275 18 N. Main Street, Suite 203 Concord, NH 03301 Telmar Network Technology Trade Debt $1,206 P.O. Box 911683 Dallas, TX 75391-1683 (800) 326-4949 San-Mar Cleaning Services, Inc. Trade Debt $1,014 147 Edgewood Drive Colchester, VT 05446 River City Communications, Inc. Trade Debt $853 Box 325 White River Jct, VT 05001 (802) 295-1661 Burlington Seven Associates Trade Debt $700 5 Burlington Square P.O. Box 119 Burlington, VT 05402 (802) 658-2545 Verizon Trade Debt $431 P.O. Box 15 150 Worchester, MA 01650-0150 ----------------------------------------------------------------- [00012] DEBTORS' MOTION TO OBTAIN $135,000,000 OF DIP FINANCING ----------------------------------------------------------------- "The Debtors urgently require working capital to maintain their operations and businesses during the chapter 11 process," Judy G.Z. Liu, Esq., at Weil, Gotshal & Manges, LLP, tells the Bankruptcy Court. "Indeed, in the absence of available working capital, the Debtors would be forced to cease their operations and constrained to discontinue service to their customers. Any significant disruptions of the Debtors' ordinary course operations due to a lack of sufficient funding would be devastating at this critical juncture. The inability of the Debtors to obtain sufficient operating liquidity and to meet their postpetition obligations on a timely basis may result in a permanent and irreplaceable loss of business, causing a loss of value to the detriment of the Debtors and the creditors of the Debtors' estates." Prior to the Petition Date, ABIZ funded its working capital needs using (a) the proceeds realized from the issuance by ABIZ of (i) the 12-1/4% Senior Secured Notes due 2004, issued on August 27, 1997 in the aggregate amount of $250,000,000, (ii) the 13% Senior Discount Notes due 2003, issued on April 15, 1996 in the aggregate amount of $329,000,000, and (iii) the 12% Senior Subordinated Notes due 2007, issued on March 2, 1999 in the aggregate amount of $300,000,000; (b) unsecured borrowings under that certain bank credit facility between Adelphia Business Solutions Operations, Inc., as borrower, and Bank of America, NA and Chase Manhattan Bank, as Co-Administrative Agents, pursuant to which Adelphia Business Solutions Operations, Inc., a wholly owned subsidiary of ABIZ and one of the Debtors herein, borrowed an aggregate of $500,000,000; and (c) following the spin-off from Adelphia Communications Corporation, working capital funding from ACC in the aggregate amount of approximately $35,000,000. Shortly before the Petition Date, Adelphia contacted several potential post-bankruptcy lenders. Ultimately, the Debtors were able to identify two financial institutions as real potential sources of postpetition financing, but neither source submitted a proposal for more than $75 million -- not enough to see these cases through chapter 11. Moreover, the terms of those proposals were terribly onerous. The Debtors concluded that a debtor-in- possession financing proposal presented by Adelphia Communications Corporation, as the administrative agent for itself and certain Lenders party thereto from time to time, was the best. Talks with ACC culminated in documentation of a Secured Debtor in Possession Credit and Security Agreement, dated as of March 27, 2002, among the Debtors, as borrowers, and Adelphia Communications Corporation, as administrative agent for itself and other DIP Lenders. The facility provides the Debtors with access to up to $135,000,000 -- enough to meet the Company's working capital and liquidity needs throughout these chapter 11 cases. The salient terms of the DIP Financing facility are: Borrowers: Adelphia Business Solutions, Inc. Adelphia Business Solutions Atlantic, Inc. Adelphia Business Solutions of Tennessee, Inc. Adelphia Business Solutions of Vermont, Inc. Adelphia Business Solutions of Kentucky, Inc. Adelphia Business Solutions of Florida, Inc. Adelphia Business Solutions Operations, Inc. Guarantors: All of the Borrowers' direct and indirect domestic subsidiaries Lenders: Lenders party to the Facility from time to time. Administrative Agent: Adelphia Communications Corporation The Facility: A revolving credit facility made available to the Borrowers in an aggregate principal amount of $135,000,000 in two Tranches: * $67,500,000 Revolving Tranche A Loans backed by Adelphia Communications Corporation and * $67,500,000 Revolving Tranche B Loans backed by Highland 2000, L.P. Maturity Date: The earliest of: (a) March 26, 2004; (b) the effective date of a joint plan of reorganization; (c) termination after an Event of Default. Closing Date: The first date on which any Loan is made. Availability: Availability under the Facility will be subject to a borrowing base comprised of the sum of: (a) $5,000,000 and (b) the sum of: (x) (1) in the case of any Borrowings in April 2002, the amount of $27,000,000; and (2) in the case of any Borrowings thereafter, the amount listed as "Free Cash Flow Borrowings" in a non-public Cash Budget and (y) the cumulative amount of "Free Cash Flow Borrowings" from the Closing Date through the current month. Interest: Loans will bear interest at an annual rate of Wachovia Bank, N.A.'s prime rate plus 3.75%. In the event of a default, the Interest Rate increases by 2.00%. Fees: The Debtors agree to pay the Lenders: * an up-front $4,050,000 Closing Fee and * 1.00% [according to the DIP Loan Agreement, but 0.25%, according to a summary document] per year on every dollar not borrowed as a Commitment Fee. Mandatory Repayments: Mandatory repayments of the Loans under the Facility are required in an amount equal to: (1) 100% of the net sale proceeds from non- ordinary course asset sales; and (2) 100% of any insurance or condemnation proceeds received by a Borrower or Guarantor. Priority: All amounts owing by the Borrowers under the Facility and by the Guarantors will constitute allowed super-priority administrative expense claims with priority over all administrative expenses of the kind specified in 11 U.S.C. Sec. 503(b) and 11 U.S.C. Sec. 507(b), subject only to the Carve-Out. Carve-Out: The Lenders agree to a $4,000,000 Carve-Out [according to a draft copy of the DIP Loan Agreement, but $2,000,000 according to a draft copy of the Interim DIP Financing Order] to allow for payment of (i) professional fees incurred in the Cases that are acceptable to the Administrative Agent and (ii) fees pursuant to 28 U.S.C. Sec. 1930 payable to the United States Trustee or the Bankruptcy Clerk. Security: All amounts owing by the Borrowers under the Facility and by the Guarantors are secured by a first priority perfected security interest in and lien on all assets (tangible, intangible, real, personal and mixed) of the Borrowers and the Guarantors, whether now owned or hereafter acquired, including, without limitation, accounts, inventory, equipment, capital stock in subsidiaries, investment property, instruments, chattel paper, real estate, leasehold interests, contracts, patents, copyrights, trademarks and other general intangibles, and all products and proceeds thereof, subject only to (i) valid and enforceable liens of record as of the date of the commencement of the Cases and (ii) the Carve-out. Financial Covenants: The Debtors covenant that cumulative free cash flow will not deviate by more than $5,000,000 from these targets: Cumulative Free For the Quarter Ending Cash Flow Target ---------------------- ---------------- June 30, 2002 ($36,994,000) September 30, 2002 ($71,195,000) December 31, 2002 ($112,224,000) The Debtors covenant that Cumulative EBITDA will not deviate by more than $5,000,000 from these targets: Cumulative For the Quarter Ending EBITDA Target ---------------------- ------------- June 30, 2002 ($6,178,000) September 30, 2002 ($9,000,000) December 31, 2002 ($7,643,000) Additionally, the Debtors covenant that Total Assets will not deviate by more than $5,000,000 from non-public target amounts at the end of any fiscal quarter. The Debtors have determined, in the exercise of their sound business judgment, that it is critical to their reorganization efforts to obtain a postpetition credit facility providing access to up to: $27,000,000 on an interim basis, pending a Final DIP Financing Hearing; and up to $135,000,000 on a permanent basis to fund the Company's working capital needs during these chapter 11 cases. The DIP Financing Pact grants liens to the DIP Lenders on the same collateral that secures the 12-1/4% Senior Secured Notes. The Ad Hoc Committee contends that the stock pledges securing repayment of those notes diminish in value and that entitles the noteholders to adequate protection payments. Ms. Liu indicates that the Debtors disagree with the Ad Hoc Committee's contention. In exchange for peace on this issue, the Debtors agree to pay Akin Gump's and Houlihan Lokey's reasonable fees and expenses in connection with those professionals' representation of the Ad Hoc Committee. Lewis U. Davis, Jr., Esq., Paula A. Zawadzski, Esq., Joan G. Dorgan, Esq., and Joy Flowers, Esq., at Buchanan Ingersoll P.C., in Pittsburgh, represent Adelphia Communications Corporation in the Debtors' chapter 11 cases. *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: Professor Stuart Gilson's newest title, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." List Price: $79.95 -- Discounted to $55.96 at http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt -------------------------------------------------------------------------