2002 AGN SEPT 03 I23 - Laserfiche WebLink

Browse Search

Item #23 CITY OF COLTON AGENDA REPORT FOR THE COUNCIL MEETING OF, SEPTEMBER 3, 2002 TO: HON. MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: KATHY KIVLEY Assistant to the City Manager SUBJECT: Resolution Supporting Participation in a Coalition of Local Governments Regarding Adelphia Communications Bankruptcy Action DATE: August 29, 2002 BACKGROUND: In recent months, Adelphia Communications has undergone well-publicized financial difficulties. These difficulties have included filing for Chapter 11 bankruptcy, the disclosure of approximately $3.1 billion in previously undisclosed off-balance sheet obligations, the commencement of a Securities and Exchange Commission and two federal grand jury investigations, allegations of widespread corporate fraud, substantial defaults on bondholder debts, numerous shareholder lawsuits against Adelphia, and the arrest of five former Adelphia corporate executives. On June 20, 2002, the States of California and Nevada Chapter of the National Association of Telecommunications Officers and Advisors ("SCAN NATOA") hosted a forum in Ontario, California, for interested local franchising authorities to interact with various consultants regarding health and safety issues, bankruptcy, insurance, performance bonds and other sureties. At this forum, SCAN NATOA also discussed the formation of a local government committee to oversee the Adelphia bankruptcy. Such a committee would require appointment by the United States Trustee currently in charge of the Adelphia bankruptcy. On July 10, 2002, the National Association of Telecommunications Officers and advisors ("NATOA") Board of Directors, after a briefing on the activity of SCAN NATOA in this area, voted to join in support of SCAN NATOA's efforts. ANALYSIS/DISCUSSION: Bankruptcy law provides, in some circumstances, for the formation of a "committee" of parties sharing like interests in a bankruptcy proceeding. If the United States Trustee appointed an official committee of local government entities, the bankruptcy estate, i.e., Adelphia, would pay the professional fees incurred by the committee. On July 16, 2002, a letter was sent by SCAN NATOA to the General Counsel of Adelphia, 2