Court Upholds Adelphia Convictions
In a 55-page opinion released today, the 2nd Circuit Court of Appeals upheld the bulk of the 2004 conviction, which sentenced John Rigas, 82, to 15 years in prison, and Timothy, 51, to 20 years. The court upheld 22 of 23 counts, reversing only a lesser count of bank fraud.
Both men have been in living in Coudersport, Pa., the original headquarters of Adelphia, free on bail during the appeals stage. Both may still opt for a review by the full appeals court or take the case all the way to the U.S. Supreme Court.
Michael Rigas, 53, another son of John Rigas and a former Adelphia exec, had earlier pled guilty to a lesser charge and received a lighter sentence -- 10 months of home confinement. In 2004, Michael was acquitted of charges of bank and securities fraud.
John and Timothy were convicted of using Adelphia's money towards things like building a golf course in the Coudersport area, and putting seven people on Adelphia's payroll just to "provide services to members of the Rigas family," according to an SEC filing. John and Timothy reportedly also raided the company coffers to put up 3,600 acres of timberland to preserve the view around John Rigas's home.
In the wake of the scandal, Adelphia filed for Chapter 11 bankruptcy protection in June 2002. (See Oh, Brother! Adelphia's Chapter 11 .)
A new executive team, led by CEO William Schleyer and president/COO Ronald Cooper, directed Adelphia through the bankruptcy process while also raising money to upgrade Adelphia's cable systems and turn the company into a sellable asset. During this time, the company also moved its corporate headquarters from Coudersport to Greenwood Village, Colo.
In April 2005, Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Inc. (NYSE: TWX) agreed to divide and acquire the U.S. assets of Adelphia for $12.7 billion in cash and 16 percent of the common stock of Time Warner's Time Warner Cable Inc. (NYSE: TWC) subsidiary, which went public in February 2007.
At the time of its original agreement with Comcast and Time Warner, Adelphia served 5.2 million basic cable customers. The deal was closed in August 2006. (See Time Warner, Comcast Buy Adelphia and Adelphia Acquisition Completes.)
John Rigas has maintained his innocence in interviews as recently as late 2006, claiming he was targeted unfairly after the high-profile Enron Corp. accounting scandal.
— Jeff Baumgartner, Site Editor, Cable Digital News