Sources: Adelphia to file for bankruptcy today

PHILADELPHIA – Adelphia Communications Corp., the nation’s sixth-largest cable company, plans to file for bankruptcy protection today, sources said Friday.

The company has reached an agreement with two banks for a $1.5 billion loan that would allow it to continue operating while it reorganizes, said the sources, who spoke on condition of anonymity.

Adelphia spokesman Eric Andrus would not comment on the likelihood or timing of a bankruptcy filing.

The company has been struggling in recent months after it was disclosed that the family of founder John J. Rigas engaged in an estimated $3.1 billion in off-the-books borrowing for which the company may bear liability.

Adelphia said the family used company cash or assets to help buy and run the Buffalo Sabres hockey team, expand the Rigases’ personal cable company holdings, acquire timberland and invest in a golf course.

The Securities and Exchange Commission and federal grand juries in Pennsylvania and New York are investigating.

Adelphia expects to restate three years of financial results to account for the off-the-books debt.

And amid the financial turmoil, Adelphia has been facing growing complaints from communities that cable installations have been halted, high-speed Internet connections have become unavailable and telephone help has been delayed.

Adelphia was dropped by the Nasdaq Stock Exchange and its stock has fallen from $20.39 before the off-the-books borrowing was disclosed in March to 15 cents Friday.