The Adelphia Arrests

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The Adelphia Arrests
The
Arrests
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The
Story

• 1952
• John Rigas, buys a cable franchise on a friend's
  advice, Rigas and his brother, Gus, name their
  company Adelphia, Greek for "brothers."

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The
Story

• 1983
• John Rigas buys out Gus Rigas' interest, and
  later his sons, Michael, Timothy and James,
  become executive vice presidents, directors and
  principal stockholders

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The
Story

• 1994
• Rigas becomes majority owner of the
  BuffaloSabres hockey team with 15 million
  investment

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The
Story

• 1998
• Adelphia reaches 2 million customers.

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The
Story

• 1999
• The company's size more than doubles when Timothy
  Rigas, the company's chief financial officer and
  chief accounting officer, leads in arranging
  three major acquisitions.

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The
Story

• March 26, 2002

Adelphia stock trades at 20.39.
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Oren Cohen

• February 2002
• It seems to me the Rigases are1 billion in
  the hole. Hows this being funded?

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The
Story

• March 27, 2002
• Adelphia says Rigas family borrowed 2.3 billion
  through family-owned partnerships. The company
  says it may be liable for some of the debt.
  Adelphia's stock drops 18 percent. Subsidiary,
  Adelphia Business Solutions Inc., files for
  bankruptcy protection.

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The
Story

• March 28, 2002
• Adelphia acknowledges that it may be liable for
  as much as 500 million in debt it guaranteed for
  Adelphia Business Solutions Inc.

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The
Story

• April 1, 2002
• Adelphia says in a Securities and Exchange
  Commission filing that it needs more time to
  review its accounting and will not meet the
  deadline for filing its annual 10-K financial
  statement. Stock closes at 13.12.

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The
Story

• April 2, 2002
• The first in a flurry of shareholder lawsuits
  accuses Adelphia of misleading stockholders by
  failing to disclose the off-balance-sheet debt,
  and alleges that a drop in the stock price was
  "in response to these negative announcements."

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The
Story

• April 4, 2002
• Adelphia announces it has hired three investment
  banks as financial advisers to explore possible
  cable asset sales and other ways to reduce debt.

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The
Story

• May 2, 2002
• Adelphia says it expects to restate 1999, 2000
  and 2001 financial results to show the
  off-the-books debt as liabilities.

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The
Story

• May 8, 2002
• Adelphia announces it is soliciting bids for
  cable systems in the Los Angeles area, Florida,
  Virginia and elsewhere in the Southeast (nearly
  half of its 5.7 million subscribers) to reduce
  debt.

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The
Story

• May 15, 2002
• Rigas, 77, steps down as CEO. Erland E.
  Kailbourne, chairman of the Adelphia board's
  audit committee, is named chairman and interim
  CEO. Nasdaq halts trading in Adelphia's stock,
  citing a need for "additional information."

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The
Story

• May 15, 2002

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The
Story

• May 16, 2002
• .

Adelphia announces the resignation of its chief
financial officer, Timothy J. Rigas
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The
Story

• May 17, 2002
• Adelphia discloses that federal grand juries in
  New York and central Pennsylvania are probing the
  company's finances. Kailbourne says the company
  has missed 44.7 million in bond interest
  payments

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The
Story

• May 23, 2002
• The Rigas family relinquishes control as John
  Rigas and sons Timothy, Michael and James resign
  as directors.

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The
Story

• May 23, 2002
• The family promises
• 1 billion in assets to help cover loans,
• 567 million in cash flow from other cable
  companies the family owns,
• all stock held by the family as collateral.

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The
Story

• May 23, 2002
• Adelphia now estimates it is liable for 3.1
  billion in family debts.

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The
Story

• May 24, 2002
• Adelphia discloses Rigas family used the
  company's cash or assets to help it buy and
  operate the Sabres, expand personal cable company
  holdings, acquire timberland and invest in a golf
  course, and that many of the deals weren't
  approved by the board.

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The
Story

• May 24, 2002
• The company said it was investigating the
  family's use of company jet airplanes,
  condominiums, and apartments.

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The
Story

• May 30, 2002
• Nasdaq says it will delist Adelphia's stock June
  3.

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The
Story

• June 3, 2002
• Adelphia's stock is dropped from Nasdaq and
  trades at 75 cents on the over-the-counter market.

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The
Story

• June 10, 2002
• Adelphia says it would revise its subscriber
  count downward by more than 47,000 to 5.76
  million. The company says it dismissed Deloitte
  Touche as its accountant and is seeking a
  replacement. .

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The
Story

• June 14, 2002
• Adelphia says it has hired the accounting firm
  PricewaterhouseCoopers. Adelphia says it fired 18
  employees (seven of whose primary function was to
  provide services to members of the Rigas family).

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The
Story

• June 17, 2002
• Adelphia misses 96 million in bond interest and
  preferred stock dividend payments.

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The
Story

• June 21, 2002
• Adelphia reaches agreement with two banks for
  1.5 billion in financing to continue operating
  while it reorganizes under Chapter 11 bankruptcy
  protection.

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The
Story

• June 25, 2002
• Adelphia files for bankruptcy.

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The
Story

• July 24, 2002
• John Rigas is arrested along with sons Timothy
  and Michael on conspiracy charges alleging they
  looted their company, using it as their "personal
  piggy bank."

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The
Story

• July 24, 2002

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The
Story

• In the last month

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The
Story

• Strong trust in one person
• Good deeds driven self-image
• Ignored public responsibilities

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The Rigas Story