John J Rigas, the criminally-indicted founder and former chairman of US cable group Adelphia Communications, will not now receive the $4.2 million (€4.3m; £2.7m) in severance pay to which he is theoretically entitled following his departure from the company in May.
Adelphia, the nation’s sixth-largest cable operator, which now operates under Chapter 11 bankruptcy protection, has yet to make any payments to Rigas and will not do so, an insider informed Wednesday. The handout of $1.4m annually for three years was agreed before the group’s scandal-embroiled plunge into insolvency.
In July, federal prosecutors filed charges against Rigas, two of his sons – both former directors of the company – and two other executives, alleging they “looted” the company on a massive scale as their “personal piggy bank”. Rigas denies any wrongdoing and, along with his sons, is free on $10 million bail each.
If he is convicted of a felony, the severance arrangement would become invalid, although his lawyer yesterday opined it to be “more than disturbing when anyone, including a corporate board, would decide to breach a contract presumably signed in good faith.”
Rigas and certain other family members have also been sued by Adelphia for the return of assets allegedly stolen.
Data sourced from: The Wall Street Journal Online; additional content by WARC staff