Adelphia Offers $300m to Pacify SEC, Feds

31 December 2004

America's Securities and Exchange Commission and Justice Department, currently investigating alleged securities violations by Adelphia Communications, have been offered a $300 million (€221.11m; £156.6m) settlement by the insolvent cable giant.

Currently sheltering under Chapter 11 bankruptcy protection, the nation's fifth largest cable operator is eager to settle allegations of financial malfeasance by its founding Rigas family [WAMN: 24-Dec-04].

Failure to do do could severely compromise the company's efforts to find a buyer for its assets.

Adelphia's annual report for 2003, released publicly on Thursday, reveals that claims against the company by law enforcement agencies might total 'billions of dollars'.

A criminal indictment by the Justice Department could slap a lien on cable properties owned by the Rigas clan and managed by Adelphia. Furthermore, the department has the power to levy fines, demand restitutions and impose criminal and civil forfeitures.

In the seemingly unlikely event that the respective agencies agree to settle for the relatively puny $300m on offer, nearly half of that sum ($125m) would be funded by litigation against the Rigases and other former executives.

Meantime, Adelphia's cable properties are up for auction and interested parties include Comcast Corporation and Time Warner - likely to bid either individually or in concert. Adelphia says it expects a sale to be concluded by the fourth quarter of 2005.

Data sourced from USA Today Online; additional content by WARC staff