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Adelphia. Stephen Buckfelder, Reid Fronk, and Ashley Roberts. Company Mission.

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stephen buckfelder reid fronk and ashley roberts


Stephen Buckfelder, Reid Fronk, and Ashley Roberts


Company Mission

“We will leverage our historical strengths of customer focus, community involvement, and employee dedication; address issues that limit profitability and growth; and act with a sense of urgency accountability and teamwork to emerge from bankruptcy and to succeed as a broadband industry leader. We will develop a reputation as a company with outstanding corporate governance.”


Adelphia Company Values

  • Urgency
  • Accountability
  • Integrity
  • Respect
  • Ethical Conduct
  • Teamwork and Communication
  • Recognition and Celebration
  • 1951- pays $72,000 for a run down movie theater in Coudersport, Pennsylvania
  • 1952-pays $300 for local cable franchise
  • 1954-Gus Rigas joins franchise
  • 1972- Incorporated, named Adelphia greek for “brother”
  • 1983-John buys out Gus’ shares and his three sons join
  • 1986-Adelphia goes public
  • 1999-pays $8.5 billion for Century Communication, Frontier Vision Partners, and Harron Communications

Becomes #6 cable company in the nation

  • 2001-Rigas inducted into cable television Hall of Fame

Scandal Timeline

  • March 2002 -Adephia announces that it provided collateral for $2.3 billion in loans to the Rigas family.
  • April 2002 -SEC issues formal order of investigation of Adelphia
  • May 2002- John Rigas resigns from positions as Chairman and CEO

Timothy Rigas resigns from positions as Executive Vice President, CFO, CAO and Treasurer.

Stock prices plummet

Erland Kailbourne appointed as CEO and Chairman

June 2002 -Adelphia filed for chapter 11 protection of the US Bankruptcy Code

Adelphia delisted from NASDAQ

  • July 2002 - Complaint filed against the Rigas family and former executives and board members
  • August 2002 -Anthony Kronman ad Rodney Cornelius are elected to the Board of Directors

Adelphia receives Bankruptcy Court order establishing procedures for trading ACC’s stock in order to preserve the use of Adelphia’s net operating losses to offset future income for tax purposes

October 2002 -Hanover Insurance Company agrees to extend up to $95 million in surety credit to Adelphia, allowing for continued operations and maintenance of it’s franchise agreements
  • January 2003 -Official Committee of Equity Security decides that the Rigas family, insiders, can’t vote any of the stock held or controlled by any of the Rigas defendants
  • March 2003 - New CEO (William Schleyer) COO (Ron Cooper), and CFO (Vanessa Wittman) hired

Adelphia corporate headquarters relocates to Denver, Colorado

May 2003 - Susan Ness and Philip Lochner become new directors on the Board
  • June 2003 - Four members of the Board of Directors, who served prior to Adelphias Chapter 11 filing, step down to begin the transition to a completely independent Board of Directors
  • April 2004 -Adelphia begins to explore selling the company to complete the Chapter 11 process.

What exactly happened?

  • John Rigas, Timothy Rigas and Micheal Rigas “used the company as their personal piggy bank”
  • They are alleged with taking millions of dollars from the company to pay for luxuries such as condos, and a golf course as well as to cover personal investment losses.
It is also claimed that the Rigas family “violated the Racketeer Influenced and Corrupt Organizations Act (RICO), federal conspiracy, securities fraud, bank fraud wire fraud, false operating statistics, state tax evasion insider trading, and using corporate assets for personal gain.
  • In the SEC lawsuit, it is alleged that the former executives excluded billions of dollars in liabilities from the financial statements by hiding them on the books of “off balance sheet affiliates.”
  • They are also accused of falsifying operating stats and inflating earnings to meet the predictions by Wall Street analysts.

Consequences of the Rigas' actions

  • Stock prices fell from their peak of $66 in May 1999 to just 15 cents in June 2002.
  • Investors are weary of big business as well as investing. The Rigas family caused investors to lose at least $60 billion.
  • Employees jobs are threatened
  • The welfare of Coudersport Pennsylvania is at risk.
Adelphia had planned to build a new office building in Buffalo, New York. This building would have brought 1000 jobs to the state, as well as increased the economic activity in the area.
  • Corruption cost NY $2.9 billion, cut tax revenues by $1 billion, and decreased the value of the pension fund by $9 billion.
Scientific-Atlanta advanced Adelphia $26 a box to help market a new digital service. On June 10, Adelphia said it never spent the advance as it was intended. Instead the money was used to reduce expenses. Scientific Atlanta will probably never see the $83.8 million owed to it.
  • Walt Disney, who sell their ESPN show to Adelphia, will see it’s income cut by $50 million.
In the summer of 2000, Adelphia purchased a privately owned cable company, Prestige Cable. After Adelphia declared bankruptcy, creditors to the cable giant searched for ways to make money back. The creditors of Adelphia are currently suing the three stock holders of Prestige Cable for knowingly selling to an unstable company. The creditors are arguing that the stockholders of Prestige worked with the Rigas family in order to increase the price of Adelphia's stock.

The Jury Decides

  • John Rigas -Found guilty on 18 counts of fraud and conspiracy charges
  • Tim Rigas -Found guilty on 18 counts of fraud and conspiracy charges
  • Michael Rigas -Resulted in mistrial due to a hung jury

What's next?

  • Time Warner and Comcast Communications are both making bids on the company.
  • It is rumored that the two companies are going to join forces.

By joining together they are hoping to reduce the risk of a bidding war. Neither company wants to pay too much for the company. It is estimated that Adelphia will sell for $20-$21 billion. The two companies will then divide the service areas.

  • A key area is Los Angeles, after it is decided who will receive this section of California the rest of the land should be divided easily.
  • After filing for chapter 11 bankruptcy, the price of Adelphia bonds plummeted to pennies on the dollar. Now that there is talk of Adelphia being sold, the price of Adelphia's bonds have started to rise.