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Wending Creek Case Study

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As the company expanded, so did the family’s extravagant lifestyle. But, unbeknownst to investors and regulators, Adelphia was paying for most of it (Beebe & Michel, 2002). John built the family home on a large plot of land he named Wending Creek. Although it was considered a commerical farm, Wending Creek’s primary source of income was the $2 million a year it received for performing general maintenance and landscaping for Adelphia offices (Beebe & Michel, 2002). The company also paid $26 million for the 3,600 acres adjacent to the farm to preserve the view for the Rigas family (Associated Press, 2004). When the Rigases purchased the Buffalo Sabres, they made a point to publicly state that the family would own the hockey team, not the company. However, Adelphia was holding $150 million in loans on the team (Beebe & Michel, 2002). When John wanted to gift local residents with tickets to the games, Adelphia paid the family $744,000 for entertainment expenses including luxury-box rentals (Burke et al., 2002). Wife Doris had a flair for interior design and ran the family-owned company Eleni Interiors. In 2001, Adelphia paid Eleni over $12 million for office furnishing and paid Doris herself $371,000 for design services (Beebe & Michel, 2002). When son Michael bought a condo in Colorado, Adelphia footed the…show more content…
To begin with, there were the obvious impacts on Adelphia executives, several businesses and banks and the cable industry itself. As most probably know, several Rigas family members paid heavy prices. John and Timothy Rigas were convicted of bank fraud, conspiracy and securities fraud. (Reference.com, n.d.). John was sentenced to 15 years in prison and Timothy to 20. Though these were noted as being some of the harshest sentences since the fall of Enron, it is important to note that these two men could have received life sentences. (Associated Press,
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