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News > Companies
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Adelphia won't pay legal fees
Cable operator refuses to pay Rigas family's legal fees as it faces cash crunch.
June 6, 2002: 6:23 PM EDT

NEW YORK (CNN/Money) - Adelphia Communications Corp., the troubled cable operator, refused to pay the legal fees of the Rigas family, which it ousted from its board last month.

Adelphia said in a regulatory filing that the Rigas family -- including co-founder and ex-CEO John Rigas and his sons Timothy and Michael (who are both former officers) -- deliberately breached their duty to the company and its shareholders. Adelphia also won't pay the expenses for James Brown, Adelphia's former vice president of finance, and Peter Venetis, a board member and Rigas son-in-law.

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"These individuals are no longer entitled to have the expenses (including the fees and expenses of their counsel) incurred in defending actions against them advanced to them by the company," Adelphia said in the filing.

Coudersport, Pa.-based Adelphia, the nation's sixth-largest cable operator, is facing troubling times, with many expecting the company to file for bankruptcy protection soon. In April Adelphia revealed that it had would increase its debt to about $2.3 billion because of loans to the Rigas family, which controlled the company at that time. In May the Rigas family relinquished control of the company and agreed to transfer more than $1 billion in assets back to the Adelphia.

Last week, Adelphia failed to file its annual report, which caused the company to be booted off the Nasdaq stock market. The cable operator's stock now is being traded on pink sheets, a spokesman said earlier this week.

The delisting also triggered covenants in some of Adelphia's convertible bonds, forcing the company to buy back about $1.4 billion in convertible debt. On June 15, Adelphia also has $38 million in interest payments due.

Earlier this week, Moody's Investors Service said that it expects a bankruptcy filing from Adelphia, which has $19.3 billion in rated debt, to be imminent.  Top of page






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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.