Adelphia Communications Corporation
Adelphia Communications Corporation (former NASDAQ ticker symbol ADELQ), was a cable television company headquartered in Coudersport, Pennsylvania. Adelphia was the fifth-largest cable company in the United States before filing for bankruptcy in 2002 as a result of internal corruption. Adelphia was founded in 1952 by John Rigas in the town of Coudersport, which remained the company's headquarters until it was moved to Greenwood Village, Colorado, shortly after filing for bankruptcy.
|Fate||Filed for Chapter 11 bankruptcy, assets were acquired by Time Warner Cable and Comcast|
|Successor||Time Warner Cable|
|Defunct||July 31, 2006|
Greenwood Village, Colorado
|John Rigas, founder|
William T. Schleyer, Chairman and CEO
Ronald (Ron) Cooper, President and COO
Vanessa Wittman, EVP and CFO
|Products||Cable television, Internet service provider|
|Revenue||$3.61 billion (2003)|
Number of employees
The majority of Adelphia's revenue-generating assets were officially acquired by Time Warner Cable and Comcast on July 31, 2006. LFC, an internet-based real estate marketing firm, auctioned off the remaining Adelphia real estate assets.
As a result of this acquisition, Adelphia no longer exists as a cable provider. Adelphia's long-distance telephone business with 110,000 customers in 27 states (telephone & long-distance services) was sold to Pioneer Telephone for about $1.2 million.
Upon divesting its cable assets, Adelphia retained a skeleton crew of 275 employees to handle remaining bankruptcy issues. It still exists as a corporate entity, continuing largely to settle ongoing financial obligations and litigation claims, as well as to consummate settlements with the SEC and the U.S. Attorney.
Bankruptcy and Dissolution
Adelphia went bankrupt after internal corruption in 2002 in which the founder of Adelphia and his son were sentenced to prison for using cash management systems to benefit other family-owned entities as well as cover the theft of around $100 million. The money was spent on personal luxuries, including $26 million spent on buying timberland surrounding the founder's home to preserve the view of wilderness.
The effective date of the Adelphia Plan of Reorganization occurred on February 13, 2007. Time Warner Cable was allowed to distribute approximately $6 billion in shares to Adelphia stakeholders and succeed Adelphia as a publicly traded corporation.
Adelphia officers trial
The founders of Adelphia were charged with securities violations. Five officers were indicted and two (John Rigas and Timothy Rigas) were found guilty. Rigas founded Adelphia with a $300 license in 1952, took the company public in 1986 and built it by acquiring other systems in the 1990s. The company collapsed into bankruptcy in 2002 after it disclosed $2.3 billion in off-balance-sheet debt.
Federal prosecutors proved that the Rigases used complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing $100 million for themselves. The New York Times noted that this differed considerably from other accounting scandals like Enron and Worldcom, saying "For the one trait that distinguishes the Rigases from virtually every other culprit on Wall Street is that they didn't sell their stock. The evidence suggests less that they intended to defraud than that they intended to hide inconvenient facts until they could be righted. This is also, of course, against the law; it's just a more tragic crime than ordinary looting."
A second Rigas son, Michael, former executive vice president for operations, was acquitted of conspiracy and wire fraud in 2005. However, jurors were deadlocked on certain counts, and Michael Rigas had been scheduled for a second trial but on March 3, 2006 he was sentenced to 10 months of home confinement and two years probation after pleading guilty in 2005 to one count of making a false entry in a financial report according to many published reports. A former Adelphia assistant treasurer, Michael Mulcahey, was acquitted of all criminal charges.
John and Timothy Rigas started their prison sentence at the Federal Correctional Complex, Butner, near Raleigh, North Carolina, on August 13, 2007. John received a sentence of 15 years and Timothy received 20 years. John was released from prison in 2016 due to poor health.
The Rigas family established a successor company, Zito Media, to continue to provide cable service in some areas not sold to Time Warner, including most cable systems in Potter County, Pennsylvania.
In addition to its cable interests, Adelphia had substantial interests in the sporting world. In 1990, it launched Empire Sports Network, a regional sports network serving central and western New York. It bought the NHL's Buffalo Sabres in 1997, and added a sports talk station, WNSA, in 2000.
On the day John Rigas and his sons were arrested, the NHL seized control of the Sabres. The team remained a ward of the league until 2003. WNSA was sold off in 2004 and is now WLKK. Empire Sports limped along until 2005, when it was finally shut down; its sports rights were split between MSG (which acquired the Sabres television rights) and Time Warner Cable Sports (which acquired most of the rest and shut down in 2017).
One previous marker of Adelphia's success before its bankruptcy included its 1999 purchase of the naming rights to a football stadium, Adelphia Coliseum in Nashville, Tennessee. It was built as the home of the Tennessee Titans. Adelphia was not a well-known company in Nashville, and had only a small presence in the area (its subsidiary, Adelphia Business Solutions, a commercial telecommunications provider, was offered as an alternative to the dominant BellSouth). The name was taken off the stadium in 2002 after Adelphia missed a payment and subsequently filed for bankruptcy. It was known as simply "The Coliseum" for four years before becoming LP Field in 2006. Today, it is known as Nissan Stadium.
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