NEW YORK (CNN/Money) - Adelphia Communications Corp.'s troubles continued to mount Friday as negotiations to sell some assets to Charter Communications fell through, raising the prospects of a Chapter 11 bankruptcy filing.

Nasdaq late Thursday decided to delist Adelphia, the nation's sixth-largest cable company, effective Monday for failing to file its annual report. Nasdaq requires companies to make timely financial reports to the Securities and Exchange Commission as a condition for being listed on its trading system.

The delisting triggers covenants in some of Adelphia's convertible bonds, forcing the company to buy back about $1.4 billion in convertible debt.

Late Thursday, Adelphia's banks gave the cable operator a one-week extension to sell some assets before it demands payment of about $7 billion in loans, a source familiar with the situation said.

Earlier this week, CNN/Money reported that Adelphia had been in "intense talks" to sell its Los Angeles assets to Charter Communications, which is controlled by Microsoft Corp. co-founder Paul Allen. An announcement had been expected by late this week.

The transaction had been expected to raise roughly $4 billion for Adelphia, which faces a cash crunch and could run out of money in 10 days, analysts have said. The cable company has about $16 billion in debt, missed a recent bond payment of $50 million, and has an interest payment due June 15.

Coudersport, Pa.-based Adelphia had wanted $3,600 per subscriber, down from the $4,000 it initially paid for the system. But Charter offered only $2,700 per subscriber, another source familiar with the negotiations said.

After the negotiations broke off, a Charter spokesman said, "We gave it our best."

Adelphia (ADLAE: Research, Estimates) shares shed more than 12 percent early Friday afternoon after plunging nearly 37 percent in morning trading.

The breakdown in negotiations and the Nasdaq delisting have spurred further speculation that Adelphia has little choice but to file for Chapter 11 bankruptcy protection.

"I don't know if anything else could prevent Adelphia from starting down that path," analyst David Joyce of Guzman & Co. said.

Adelphia has few option left and does not have the funds to buy back the $1.4 billion in debt, Joyce said. Citicorp, First Union and Bank of America still could extend enough credit to satisfy the bondholders. The cable company also could file its 10K with the SEC.

"That would get Adelphia relisted and bondholders wouldn't be able to call in the puts," Joyce said.

But bankruptcy likely will be the main topic at Adelphia's board meeting Saturday.

"We will attempt to sell selective assets and obtain additional capital," an Adelphia spokesman said Friday. "That's our priority over the next couple days."

The news caused Adelphia (ADLAE: Research, Estimates) shares to plunge 37 percent in morning trading on the Nasdaq.

Separately, a battle appears to be brewing between board member Leonard Tow and Adelphia's management. Tow, in a letter to Adelphia Chairman and interim CEO Erland Kailbourne, objected Thursday to the cable operator's planned sale of some of its assets.

Tow said he has asked for a "full and candid" briefing on the sale transaction but the company has yet to fulfill that request. Kailbourne, in another letter late Thursday, said he was surprised by Tow's claims and that it was the first time Tow had indicated his objection to an asset sale.

Kailbourne also vowed not to complete any transaction before the board meeting Saturday.

Kailbourne also revealed that Tow is trying to be elected chairman of Adelphia. Earlier this week, Tow and Scott Schneider secured seats on Adelphia's board after a two-week publicity campaign. Tow and his family trusts own about 12 percent of the company's stock. He is chairman and CEO of Citizens Communications while Schneider is vice chairman.

"I certainly hope that your letter is, and your participation as a member of the Board, will be directed towards what will benefit all of the company's shareholders and not in pursuit of a separate agenda," Kailbourne said.

On Friday, Highfields Capital Management, which owns 6.5 percent of Adelphia Class A shares, also objected to the company's selling assets. In a letter to Kailbourne, Highfields urged that the entire company be put up for sale and that Adelphia hire bankers to conduct an orderly auction.

Highland, a Boston-based investment management services firm, has conducted an analysis of Adelphia's assets, liabilities and recent disclosures and believes that the fair market value of the cable operator's assets substantially exceeds its liabilities.

"This will instill confidence in Adelphia's creditors that they will be paid in full and in a much shorter time frame than would be achievable in a bankruptcy proceeding," Highland Managing Directors Jonathan Jacobson and Richard Grubman said.