Adelphia CFO Quits in Face of $2.3bn Loan Probe

20 May 2002

US cable giant Adelphia Communications announced over the weekend it has appointed a board-level committee led by prominent lawyer David Boies to investigate the circumstances of a controversial $2.3 billion (€2.5bn; £1.57bn) loan made to the Rigas family – members of which were major shareholders in and officers of the group.

The appointment of the committee coincided with the resignation of Timothy Rigas as chief financial officer, just twenty-four hours after a similar departure from the triple positions of chairman, chief executive and president of his father John J Rigas.

The familial exits came hard on the heels of suspension of work on Adelphia’s accounts by its auditor, concerned at a private loan made to the ruling family for which the company is co-guarantor.

There is widespread concern on Wall Street that Adelphia’s financial situation could be parlous – even that it could be forced into early bankruptcy.

It was also revealed over the weekend that the group plans to disclose the details of its dealings with the Rigas family. Retired banker Erland Kailbourne, who last week assumed the positions of chairman and interim chief executive promised “a complete, unflinching review of all the questions that have been raised – and to make a full and candid disclosure of each and every problem the company finds to exist.”

Meantime, two other scions of the Rigas clan still sit on Adelphia’s board as executive vice presidents: James, as head of strategic planning and Michael, as secretary.

Data sourced from multiple publications; additional content by WARC staff