Adelphia 1

7/29/2019 Adelphia 1

http://slidepdf.com/reader/full/adelphia-1 1/17

Stephen Buckfelder, Reid Fronk,and Ashley Roberts



“We will leverage our historical strengths of customer focus, community involvement,and employee dedication; address issues

that limit profitability and growth; and actwith a sense of urgency accountability andteamwork to emerge from bankruptcy andto succeed as a broadband industry

leader. We will develop a reputation as acompany with outstanding corporategovernance.”



Urgency

Accountability

Integrity Respect

Ethical Conduct

Teamwork and Communication

Recognition and Celebration



History

1951- pays $72,000 for a run down movie theater inCoudersport, 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 CommunicationsBecomes #6 cable company in the nation

2001-Rigas inducted into cable television Hall of Fame



March 2002 -Adephia announces that it providedcollateral 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 asChairman and CEO

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

Stock prices plummetErland 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 preservethe use of Adelphia’s net operating losses to offset futureincome for tax purposes



October 2002 -Hanover Insurance Company agrees toextend up to $95 million in surety credit to Adelphia,allowing for continued operations and maintenance of it’sfranchise agreements

January 2003 -Official Committee of Equity Securitydecides that the Rigas family, insiders, can’t vote any of the stock held or controlled by any of the Rigasdefendants

March 2003 - New CEO (William Schleyer) COO (RonCooper), 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 acompletely independent Board of Directors

April 2004 -Adelphia begins to explore sellingthe company to complete the Chapter 11process.



John Rigas, Timothy Rigas and Micheal Rigas“used the company as their personal piggybank”

They are alleged with taking millions of dollars from thecompany to pay for luxuries such as condos, and a golf course as well as to cover personal investment losses.

http://www.n-e-ability.co.uk/userimages/P9231844.jpg



It is also claimed that the Rigas family “violated theRacketeer Influenced and Corrupt Organizations Act(RICO), federal conspiracy, securities fraud, bank fraudwire fraud, false operating statistics, state tax evasion

insider trading, and using corporate assets for personalgain.

In the SEC lawsuit, it is alleged that the former executives excluded billions of dollars in liabilities fromthe 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 Streetanalysts.



Stock prices fell from their peak of $66 inMay 1999 to just 15 cents in June 2002.

Investors are weary of big business as

well as investing. The Rigas familycaused 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 officebuilding in Buffalo, New York. This buildingwould have brought 1000 jobs to the state, as

well as increased the economic activity in thearea.

Corruption cost NY $2.9 billion, cut tax revenuesby $1 billion, and decreased the value of the

pension fund by $9 billion.

http://www.aoqz76.dsl.pipex.com/Web%20Page%20Components/Wallpaper/Landscapes/New%20York%20Street.jpg



Scientific-Atlanta advanced Adelphia $26 a box to helpmarket a new digital service. On June 10, Adelphia saidit never spent the advance as it was intended. Insteadthe money was used to reduce expenses. Scientific

Atlanta will probably never see the $83.8 million owed toit.

• Walt Disney, who sell their ESPN show to Adelphia, will see it’s income cut by $50 million.

http://images.auctionworks.com/hi/47/46956/miky1.jpg



In the summer of 2000, Adelphia purchased a privatelyowned cable company, Prestige Cable. After Adelphiadeclared bankruptcy, creditors to the cable giantsearched 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 unstablecompany. The creditors are arguing that thestockholders of Prestige worked with the Rigas family inorder to increase the price of Adelphia's stock.



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 toa hung jury

http://www.absoluteamusements.com/gamepic/monopoly/r-Go%20To%20Jail.jpg



Time Warner and Comcast Communications are bothmaking bids on the company.

It is rumored that the two companies are going to joinforces.

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

A key area is Los Angeles, after it is decided who willreceive this section of California the rest of the landshould 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.

Adelphia 1

Documents

Transcript of Adelphia 1