Adelphia Communications and major creditors agreed to a plan that aims to allow the cable operator to emerge from bankruptcy in the fourth quarter.

The Greenwood Village, Colo., company said it had agreed to a framework with committees representing most major bondholders and trade creditors, including the Official Committee of Unsecured Creditors. "Significant individual creditors" have agreed as well, Adelphia said.

Under a compromise, some $1.08 billion in value will be transferred from certain unsecured creditors of various Adelphia subsidiaries to certain unsecured senior and trade creditors of the Adelphia Communications parent corporation. The move is subject, in some cases, to reimbursement from contingent sources of value, including the proceeds of a litigation trust to be established under the plan to pursue claims against third parties that are alleged to have damaged Adelphia.

The plan outlined in the agreement is conditioned on, among other things, the closing of the anticipated sale of substantially all of the company's assets to Time Warner ( TWX) and Comcast ( CMCSA). Adelphia intends to soon file a revised Plan of Reorganization and accompanying Disclosure Statement with the bankruptcy court embodying the terms of the agreement.

The expected July 31 closing date for the sale of Adelphia's assets and joint-venture interests to Time Warner Cable and Comcast remains in effect.