A major buyer of

Adelphia Communications

(ADLAE)

shares in recent weeks is scrambling to prevent its $84 million investment from going down the drain.

Highfields Capital Management, a Boston-based firm with more than $1 billion under management, publicly complained Friday that Adelphia's reported plan to raise cash via quick asset sales is a "shortsighted mistake ... tantamount to 'burning the furniture to keep the house warm.'"

Arguing that Adelphia, the troubled cable TV system operator, has assets that far outweigh its liabilities, Highfields argued in a

Securities and Exchange Commission

filing that the company should put the entire company up for sale in "an orderly sale process," one that Highfields says would reassure creditors that they would be paid in full and enable Adelphia to avoid a filing for bankruptcy protection.

But it appears that selling the company whole is a venture that would be fraught with difficulty, considering that the recent history of Adelphia looks like a case study of how to invite shareholder lawsuits. Presumably, potential buyers would be fearful of the legal liabilities they'd be taking on along with the company's business operations, no matter how attractive they might be. Adelphia fell 23 cents Friday to 93 cents.

Stakeholding

Highfields' filing, which discloses that the firm has acquired 6.5% of Adelphia's publicly traded stock over the past two months, spotlights the risks of betting on a turnaround in beaten-down stocks. Highfields says it started buying shares in Adelphia starting April 3, a week after the cable operator shocked investors by saying that it was potentially on the hook for $2.3 billion borrowed by the Rigas family of Coudersport, Pa., which at the time controlled the company's board of directors, executive suite and voting shares.

The hedge fund, which manages money for Harvard University's endowment, started buying Adelphia's shares at $10.99 -- roughly half the price the stock had been trading at before the company's revelation of its potential liabilities. As April turned to May, more disturbing news streamed out of Adelphia and the stock fell below $2. Highfields continued to buy Adelphia shares, evidently betting that the shares would recover once the company got its financial house in order.

But with Adelphia's delisting imminent and the company being in default, the possibility of a bankruptcy filing appears high. That turn of events would likely -- though not necessarily -- render valueless the shares held by Highfields and other equity holders.

Highfields didn't return a call seeking comment on Adelphia.

Down This Road Before

Though a bankruptcy filing would be an unpleasant outcome for investors who are long Adelphia's stock, it would be just another day at the office for Highfields. The investment firm, which appears to have profited from selling

Enron's

stock short, has a history of arguments -- not all of which it wins -- with companies in which it invests.

Earlier this year, Highfields loudly criticized

Reader's Digest

(RDA)

for both a stock repurchase agreement and a deal to acquire privately Reiman Publications. Reader's Digest didn't listen.

In 1999, Highfields badgered the management of Reynolds Metals, arguing that the company should sell itself. But when Reynolds announced a deal later that year to be acquired by

Alcoa

(AA) - Get Report

, Highfields complained bitterly that Reynolds had botched the deal by accepting too cheap a price. "Your behavior is reprehensible," said Highfields in a letter to the Reynolds board, "and ... you will forever be remembered for your failure in this matter."