Adelphia Communications

1101 Words Jul 8th, 2015 5 Pages
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20 July 2015
Adelphia Communications Adelphia is the 6th biggest cable television provider in the United States and, with various subsidiaries, gives services of cable television and local telephone service to customers in 32 states and Puerto Rico. Adelphia means "brothers" in Greek. It used to be one of America's largest cable companies. John Rigas established the company and served as CEO and chairman. John's son Tim was CFO, and Tim's brothers, Michael, and James were Vice Presidents. All four were council members, along with John's son-in-law Peter Venetis. The Rigases also had 100% possession of class B super-voting shares, which granted the family majority voting rights.
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(Markon) The scandal came to light when the Rigases published that Adelphia was responsible for more than $2 billion in loans to family-owned entities. Outside board members took control and formed a special committee to investigate. The SEC launched a formal probe three and a half months ago and two grand juries, one in New York, and one in Pennsylvania began investigating. Adelphia also filed the lawsuit seeking more than $1 billion against the entire Rigas family, including John's wife, Doris, and his daughter Ellen and son-in-law, Peter Venetis. The lawsuit accuses the family of a violation of the Racketeer Influenced and Corrupt Organizations Act, breaching its fiduciary duties, wasting corporate assets, abusing control, breaching its contracts and other violations. The suit alleges that the Rigases "regularly conducted their business activities with the sole purpose of benefiting themselves at the expense of Adelphia" and borrowed company funds that "either directly or indirectly, unjustly enriched the Rigas family directors and other Rigas family members." The criminal complaint, filed in federal court in New York, offers the clearest view yet of one of the biggest cases of alleged insider dealing ever. In its lawsuit, filed in federal court in Manhattan, the Commission alleges that the defendants violated the antifraud, periodic reporting, record keeping, and internal controls
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