Adelphia Settles Accounting Fraud Probe

27 April 2005

US cable TV operator Adelphia Communications has agreed to pay one of the biggest fraud settlements of the corporate scandal era.

The company, which has been operating under Chapter 11 bankruptcy protection since 2002, is currently the subject of a joint takeover bid by media giant Time Warner and the nation's number one cable firm Comcast.

Under the terms of the settlement with federal financial regulator the Securities and Exchange Commission, Adelphia's founder John Rigas and his family will hand over to the company assets worth $1.5 billion (€1.1bn, £784m). Adelphia will in turn pay $715 million into a compensation fund for investors who suffered losses.

Rigas and his son Timothy were convicted last year of conspiracy and securities fraud for looting the company and misleading investors. They face a possible 215 years in jail.

The settlement will clear the way for the company's sale to TW/Comcast. The pair has offered around $17.6bn in cash and stock for Adelphia's 5.2m-subscriber network.

Data sourced from Financial Times online; additional content by WARC staff