Adelphia Scandal

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  • Topic: John Rigas, Adelphia Communications Corporation, Vice president
  • Pages : 5 (1676 words )
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  • Published : November 26, 2005
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Adelphia Cable

Bruce Dawson
Principles of Management
"Adelphia is one of the nation's leading cable companies with more than 5.3 million residential customers nationwide. In addition to cable entertainment Adelphia offers digital cable, high-speed internet access, long distance telephone service, and home security" (Adelphia).

The leadership of this company currently consists of 18 officers. One officer for each of the five regions Adelphia covers. One officer in each of the following: Human Resource, Finance, Customer Care, Marketing, Programming, Media Services, Chief Accounting Officer, and Information Technology. Currently the top four officers for Adelphia Communications are as follows, Brad Sonnenberg, Executive VP of General Counsel and Secretary, Vanessa Wittman, Executive VP and Chief Financial Officer, Ron Cooper, President and Chief Operating Officer and William T. Schleyer who is the Chairman and CEO of Adelphia Cable. Prior to Schlleyer's employment for Adelphia he was engaged as a Principal in Pilot House Ventures, President and COO of Media One, President and COO of Continental Cablevision, Inc.

The company was founded in 1952 in the small town of Coudersport, Pennsylvania and incorporated in 1972. By 1998 Adelphia had passed the two million-customer milestone for its cable television service while, at the same time, rapidly expanding a new line of telecommunications products and services. By 1999 Adelphia more than doubled its reach with three major acquisitions, extending their services into 30 states and serving more than 5 million customers. Presently Adelphia Cable is the fifth-largest cable television company in the United States. "Adelphia Communications Corporation has traveled a path from relative obscurity through notoriety and into the national spotlight. It is working now under the new leadership to address the issues of it's past and emerge from Chapter 11 bankruptcy to become a broadband industry leader with a reputation for strong and effective corporate governance" (Adelphia).

Adelphia Communications offers a variety of different products such as Cable for more than 5.3 million residential customers nationwide, digital cable, high-speed Internet access, long distance telephone service, and home security along with 24-hour customer service. In July 2002 John Rigas (Former CEO) and two of his sons were arrested and charged with looting the cable TV company of hundreds of millions of dollars to pay for luxury condos, a golf course, and to cover personal investment loses. "The complaint alleges that members of the Rigas family that controlled Adelphia systematically looted the corporation. In less than four years, the complaint alleges, they stole hundreds of millions of dollars and through their fraud caused losses for investors of more than $60 billion" (CNN). Subsequent to the arrest of Rigas Adelphia's stock closed at 15 cents a share on July 24, 2002, down from a peak of $66 in May 1999.

"Rigas, founder, former chairman and CEO, his sons Timothy and Michael, faced federal conspiracy charges as well as securities, bank and wire fraud charges. They each face up to 100 years in prison and millions of dollars in fines if convicted on all counts" (CNN). Timothy and Michael Rigas were executive vice presidents of Adelphia Communications. Timothy was chief financial officer and head of the board's audit committee, and Michael was in charge of operations. April 17, 2002 Adelphia announced that the SEC issued formal order of investigation in connection with the matters, which are the subject of Adelphia's previously, disclosed SEC inquiry. May 14, 2002 Deloitte & Touche LLP, Adelphia's former auditor, suspended its auditing work on Adelphia's financial statements for the year ending December 31, 2001. May 15, 2002 John Rigas resigned as Chairman and CEO then on the same day Adelphia failed to make interest payments totaling approximately $38.3 million...
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