Adelphia Recovery Trust looks to amend declaration for tax purposes

By Caroline Salls

Pittsburgh, April 30 - The Adelphia Recovery Trust requested court approval to amend its declaration of trust as a condition to an Internal Revenue Service ruling that would confirm the trust's pass-through grantor trust status for tax purposes, according to a news release.

According to the release, if the trust is granted pass-through grantor trust status, Adelphia's litigation proceeds will not be subject to taxation at the trust level.

Adelphia Recovery said the proposed declaration of trust amendment eliminates the trustees' obligation to have the trust interests listed on a national securities exchange.

The motion also asks the U.S. Bankruptcy Court for the Southern District of New York to deem distributions to interest holders under a specified class of trust interests as first allocated to the deficiency in that class before being allocated to dividends accrued on that deficiency.

The trust said this could potentially impact the recovery of various classes in relation to the other classes.

A hearing is scheduled for June 3.

Adelphia, a Greenwood Village, Colo.-based cable operator, emerged from bankruptcy on Feb. 13, 2007. Its Chapter 11 case number is 02-41729.

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