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Adelphia Nears Agreement with SEC, DOJ

Mar 24, 2005  •  Post A Comment

Adelphia Communications is said to be close to reaching a settlement with the Securities and Exchange Commission and the Department of Justice in which the cable operator will pay around $725 million to settle claims tied to a massive accounting scandal that forced the company to file for bankruptcy protection in 2002.

According to a report in Thursday’s Wall Street Journal, Adelphia and federal officials have entered the home stretch of a yearlong negotiation to settle claims associated with the discovery that members of Adelphia’s founding

Rigas family looted the company coffers to finance lavish lifestyles and then misled investors about the state of Adelphia’s financial health.

Adelphia’s founder and former Chairman, John Rigas, and his son, former Chief Financial Officer Timothy Rigas, were convicted last year on charges stemming from those acts. Each faces the possibility of up to 30 years in prison when the two men are sentenced April 18. The article stated that one reason Adelphia and federal officials have stepped up their efforts to reach a settlement is to achieve a resolution that coincides with the Rigases’ sentencing.

Although the two sides have settled on the big picture, the Journal said smaller details have yet to be settled. Among them is whether Adelphia can take ownership of cable systems owned by the Rigas family but managed by Adelphia.