Adelphia
Encyclopedia
Adelphia Communications Corporation (former NASDAQ
ticker symbol ADELQ), named after the Greek
word αδελφοί adelphoi "brothers", 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.
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. Had the 110,000 telephone customers been shut off versus being sold to Pioneer Telephone
, those customers would have more than likely left Adelphia cable and high speed internet services. The potential financial damage to the creditors of Adelphia was over $150 million. Although the purchase price by Pioneer Telephone
was relatively small ($1.2 million) the transaction was very significant.
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.
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.
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 3rd, 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.
, 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.
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 (since its subsidiary, Adelphia Business Solutions, a commercial telecommunications provider offered as an alternative to BellSouth
) before, and even after, the naming rights were purchased. 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.
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
ticker symbol ADELQ), named after the Greek
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...
word αδελφοί adelphoi "brothers", was a cable television company headquartered in Coudersport, Pennsylvania
Coudersport, Pennsylvania
Coudersport is a borough in Potter County, Pennsylvania, east by south of Erie on the Allegheny River. The populations were these: 1,530 in 1890; 3,217 in 1900; and 3,100 in 1910. The population was 2,650 at the 2000 census...
. Adelphia was the fifth largest cable company in the United States before filing for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
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
Greenwood Village, Colorado
The city of Greenwood Village is a prominent suburb of the Denver-Aurora Metropolitan Statistical Area and a Home Rule Municipality located in Arapahoe County, Colorado, United States...
, shortly after filing for bankruptcy.
The majority of Adelphia's revenue-generating assets were officially acquired by Time Warner Cable
Time Warner Cable
Time Warner Cable is an American cable television company that operates in 28 states and has 31 operating divisions...
and Comcast
Comcast
Comcast Corporation is the largest cable operator, home Internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the...
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
Pioneer Telephone
Pioneer Telephone is a privately held company with headquarters in Portland, Maine. It is a facility based telecommunication carrier of long-distance telephone service in the United States...
for about $1.2 million. Had the 110,000 telephone customers been shut off versus being sold to Pioneer Telephone
Pioneer Telephone
Pioneer Telephone is a privately held company with headquarters in Portland, Maine. It is a facility based telecommunication carrier of long-distance telephone service in the United States...
, those customers would have more than likely left Adelphia cable and high speed internet services. The potential financial damage to the creditors of Adelphia was over $150 million. Although the purchase price by Pioneer Telephone
Pioneer Telephone
Pioneer Telephone is a privately held company with headquarters in Portland, Maine. It is a facility based telecommunication carrier of long-distance telephone service in the United States...
was relatively small ($1.2 million) the transaction was very significant.
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.
Dissolution
Adelphia's Chapter 11 bankruptcy reorganization has been marked by extensive disputes between creditors over the distribution of proceeds. The dispute mainly pits creditors of the parent company (Adelphia Communications Corporation) against the creditors of the various operating subsidiaries (primarily, Arahova, also known as Century Communications). This dispute is ongoing.The effective date of the Adelphia Plan of Reorganization occurred on February 13, 2007. Time Warner Cable
Time Warner Cable
Time Warner Cable is an American cable television company that operates in 28 states and has 31 operating divisions...
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-sheetOff-balance-sheet
Off-balance sheet usually means an asset or debt or financing activity not on the company's balance sheet.Some companies may have significant amounts of off-balance sheet assets and liabilities. For example, financial institutions often offer asset management or brokerage services to their clients...
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
Accounting scandals
Accounting scandals, or corporate accounting scandals, are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations...
like Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
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 3rd, 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
Raleigh, North Carolina
Raleigh is the capital and the second largest city in the state of North Carolina as well as the seat of Wake County. Raleigh is known as the "City of Oaks" for its many oak trees. According to the U.S. Census Bureau, the city's 2010 population was 403,892, over an area of , making Raleigh...
, on August 13, 2007. John received a sentence of 15 years and Timothy received 20 years.
Sports
In addition to its cable interests, Adelphia had substantial interests in the sporting world. In 1990, it launched Empire Sports NetworkEmpire Sports Network
Empire Sports Network was a regional sports network on cable television which served upstate New York from Buffalo to Albany, parts of northern Pennsylvania and eastern Ohio...
, a regional sports network
Regional sports network
In the United States of America and Canada, a regional sports network, or RSN, is a cable television station that presents sports programming to a local market. The most important programming on an RSN consists of live broadcasts of professional and college sporting events, as those games generate...
serving central and western New York. It bought the NHL's Buffalo Sabres
Buffalo Sabres
The Buffalo Sabres are a professional ice hockey team based in Buffalo, New York. They are members of the Northeast Division of the Eastern Conference of the National Hockey League .-Founding and early success: 1970-71—1980-81:...
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
WLKK
WLKK is an American radio station located in Wethersfield, New York. Broadcasting on the frequency of 107.7 MHz, the station is currently owned by Entercom Communications and is operated out of the company's studios in Amherst, New York, a suburb of Buffalo...
. Empire Sports limped along until 2005, when it was finally shut down.
Adelphia Coliseum
One previous marker of Adelphia's success before its bankruptcy included its 1999 purchase of the naming rightsNaming rights
In the private sector, naming rights are a financial transaction whereby a corporation or other entity purchases the right to name a facility, typically for a defined period of time. For properties like a multi-purpose arena, performing arts venue or an athletic field, the term ranges from three...
to a football
American football
American football is a sport played between two teams of eleven with the objective of scoring points by advancing the ball into the opposing team's end zone. Known in the United States simply as football, it may also be referred to informally as gridiron football. The ball can be advanced by...
stadium
Stadium
A modern stadium is a place or venue for outdoor sports, concerts, or other events and consists of a field or stage either partly or completely surrounded by a structure designed to allow spectators to stand or sit and view the event.)Pausanias noted that for about half a century the only event...
, Adelphia Coliseum in Nashville, Tennessee
Nashville, Tennessee
Nashville is the capital of the U.S. state of Tennessee and the county seat of Davidson County. It is located on the Cumberland River in Davidson County, in the north-central part of the state. The city is a center for the health care, publishing, banking and transportation industries, and is home...
. It was built as the home of the Tennessee Titans
Tennessee Titans
The Tennessee Titans are a professional American football team based in Nashville, Tennessee, United States. They are members of the South Division of the American Football Conference in the National Football League . Previously known as the Houston Oilers, the team began play in 1960 as a charter...
. Adelphia was not a well-known company in Nashville and had only a small presence in the area (since its subsidiary, Adelphia Business Solutions, a commercial telecommunications provider offered as an alternative to BellSouth
BellSouth
BellSouth Corporation is an American telecommunications holding company based in Atlanta, Georgia. BellSouth was one of the seven original Regional Bell Operating Companies after the U.S...
) before, and even after, the naming rights were purchased. 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
LP Field
LP Field is a football stadium in Nashville, Tennessee, United States, owned by the Metropolitan Government of Nashville and Davidson County....
in 2006.
See also
- Corporate abuse
- List of Ig Nobel Prize winners#2002 Recipient of the 2002 Ig Nobel Prize in Economics "for adapting the mathematical concept of imaginary numbers for use in the business world"
External links
- LFC Adelphia Bankruptcy Real Estate Auction
- Adelphia chapter 11 bankruptcy site
- Adelphia (Archive)
- News article on Rigases conviction
- News article on Adelphia's decision to offer X-rated pornography
- Yahoo! - Adelphia Communications Corporation Company Profile