As the scandal unfolded the litany of questionable dealings between the Rigas family and Adelphia continued to grow: By the end of the company owned cable television systems throughout an eight-state region comprising FloridaMassachusetts, MichiganNew JerseyOhioPennsylvania, Vermontand Virginia.
The patriarch Adelphia communications corp the family, John J. The effective date of the Adelphia Plan of Reorganization occurred on February 13, The company ran into significant trouble in when its fraudulent financial dealings and accounting practices were exposed.
Despite this precedent, the Equity Committee argues that this Circuit concluded in Smart World that derivative standing equates to ownership of claims. Adelphia lost money each year during its expansion, but perhaps more important to the long-term health of the company was the manner in which it had expanded.
As a result of the scandal, founder John Rigas and his family ceded control of the company, and Adelphia filed for Chapter 11 bankruptcy protection. The Commission seeks a judgment ordering the defendants to account for and disgorge all ill-gotten gains, including all compensation received by the individual defendants during the fraud, all property unlawfully taken from Adelphia by the individual defendants through undisclosed related-party transactions, and any severance payments related to the individual defendants' resignations from the company.
Recoveries by the litigation trust would first be paid to all Debtors' unsecured creditors that had not yet realized the full value of their claims, without regard to which of the Debtors' claims had generated the recoveries. We reject the Equity Committee's argument, which would prevent a bankruptcy court from confirming a plan that touched, however tangentially, upon an adversary proceeding before a district court.
The district court concluded that withdrawal was both permitted and mandatory because the claims were "non-core" and involved "substantial and material consideration and significant interpretation" of federal law outside of the Bankruptcy Code.
The New York Times noted that this differed considerably from other accounting scandals like Enron and Worldcomsaying "For the one trait that distinguishes the Rigases from virtually every other culprit on Wall Street is that they didn't sell their stock.
The bankruptcy court also concluded that while the benefits of the Equity Committee's continued litigation were questionable, the costs risked being considerable. Under these loan agreements, the Rigas entities were responsible for repaying the debt, but if they were unable to do so, Adelphia would be liable.
Everything was off the books. Rigas"a 44 year-old resident of Coudersport, Pennsylvania and a son of J. Part of the upgrade consisted of the installation of 2, miles of cable, including a fiber-optic network that would double the number of available stations from 36 to 72, give sharper television images, and lessen the chance of interrupted service.
But that is not so. Adelphia is the sixth largest cable television provider in the United States and, through various subsidiaries, provides cable television and local telephone service to customers in 32 states and Puerto Rico.
Bankruptcy Code on June 25, As a result of the scandal, founder John Rigas and his family ceded control of the company, and Adelphia filed for Chapter 11 bankruptcy protection. It serves "with the approval and supervision of a bankruptcy court" and shares the "labor" of litigation with the debtor-in-possession.
The company then entered a period of reorganization. Rigas"a 77 year-old resident of Coudersport, Pennsylvania. The acquisition brought Adelphia 1.
Brown made repeated misstatements in press releases, earnings reports, and Commission filings about Adelphia's performance in the cable industry, by inflating: The district court concluded that the Equity Committee's argument was "equitably moot because no effective relief can be fashioned without unwinding the entire Plan.
By June it was revealed that the company had significantly overstated its cash flow as well as the number of its cable subscribers for The benefits of grouping cable systems together would manifest themselves as Adelphia entered the s, making the company an industry leader and reducing the sting of consecutive money-losing years.
After taking Adelphia public in AugustRigas completed the acquisition of three cable systems before the end of the year, purchasing the Suburban Buffalo System from Comax Telcom Corp.
Since at leastAdelphia, through the Rigas Family and Brown, made fraudulent misrepresentations and omissions of material fact to conceal extensive self-dealing by the Rigas Family.
The Rigases, it appeared, had used much of the loan money to acquire Adelphia stock; they had also used loan money to finance the purchases of cable properties separate from Adelphia. Rigas, and James P.
Rigas, and James R. Rigas served as a director of Adelphia, as well as Adelphia's Executive Vice President for Strategic Planning until May 23, when he resigned pursuant to a request by the Special Committee.
With bankruptcy protection alleviating the immediate pressure to liquidate valuable assets, the company hoped to reorganize and regain its footing. Adelphia moved to delay filing its annual report and restate its financial results for the past three years in order to clarify and properly account for the debt.
Each of these represent key "metrics" by which Wall Street evaluates cable companies. The Growth of Adelphia and Cable Television: However, jurors were deadlocked on certain counts, and Michael Rigas had been scheduled for a second trial but on March 3, he was sentenced to 10 months of home confinement and two years probation after pleading guilty in to one count of making a false entry in a financial report according to many published reports.
According to this line of reasoning, the trustees will quickly resolve litigation in order to satisfy creditors' senior claims without pursuing larger resolutions whose benefits might trickle down to shareholders. Generally speaking, we try to cluster our systems together.
Adelphia achieved exponential growth in the s and s through aggressive acquisition strategies.Adelphia Communications Corporation, Time Warner Inc.
and Comcast Corporation seek approval to transfer control and/or assign FCC authorizations and licenses. See the Public Notice for more information.
Notice of Ex Parte Communication, filed by Time Warner Inc., Comcast Corporation, Inc., and Adelphia Communications Corp. 9/19/05 Notice of Ex Parte Communication, filed by Time Warner Inc., Comcast Corporation, and Adelphia Communications Corp.
The corporate roots of Adelphia Communications were inseparably linked with the Rigas family, whose experience in the cable television business predated the incorporation of Adelphia Communications by more than three decades.
The patriarch of the family, John J. Rigas, first entered the business. Home: Thank you for visiting kellysquaresherman.com On June 25, Adelphia Communications Corporation and certain affiliates filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code.
Shareholders sued Adelphia Communications Corp. and several individual directors for securities fraud, alleging violations of § § 10(b), 18 and 20(a) of the Securities and Exchange Act ofand § § s 11 and 15 of the Securities Act of Adelphia Communications Corp Harvard Case Study Solution and Analysis of Case Study Solution & AnalysisIn most courses studied at Harvard Business schools, students are provided with a case study.
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