Now Adelphia Wants A Piece of The RigasesJul 25, 2002 | Thestreet.com
Here's the latest plaintiff to join the parade of lawsuits against the former management of Adelphia Communications.
The cable television system operator said Wednesday it filed suit against seven former executives and directors of the firm, accusing them of racketeering violations, breach of fiduciary duties, waste of corporate assets and other misdeeds.
The lawsuit, filed in U.S. bankruptcy court in the Southern District of New York, follows the arrest of five former Adelphia executives on securities fraud charges Wednesday, along with a Securities and Exchange Commission suit against former management and the company itself.
Like the other lawsuits, Adelphia's targets the Rigas family of Coudersport, Pa., which until late May controlled a majority of the company's voting stock, held a majority of seats on its board, and dominated its executive offices.
Named in the latest lawsuit are the same people targeted in the SEC's civil complaint: John Rigas, Adelphia's founder and former CEO; his sons Tim, Michael and James, all former executives at the company; former vice president of finance James Brown; and former assistant treasurer Michael Mulcahey.
Also named in the suit are James Rigas' wife, Doris Rigas; his daughter, Ellen Rigas Venetis; and her husband, Peter Venetis, a former director of Adelphia. Neither Doris Rigas nor Ellen Rigas Venetis have recently had official positions at Adelphia, though the firm has previously alleged that Adelphia paid $371,000 last year to a design services firm owned by Doris Rigas, and that Ellen Rigas Venetis and her husband enjoyed rent-free use of an Adelphia-owned apartment in New York City. It also alleged Ellen Rigas Venetis received a multimillion-dollar loan from Adelphia to produce a feature film.
Among other charges, the new lawsuit accuses the Rigas family and other defendants of filing false and misleading financial statements, failing to disclose multiple unapproved acts of self-dealing, commingling Adelphia funds with separate entities controlled by the Rigas family, and enriching themselves at the expense of shareholders.
Adelphia filed for bankruptcy protection in June.
In a statement, Adelphia's current chairman and interim CEO, Erland "Erkie" Kailbourne, said, "The purpose of this lawsuit is to recover damages from the Rigas family and their controlled entities for their massive self-dealing and misconduct. These members of the Rigas family deliberately acted with the purpose of benefiting themselves at the expense of Adelphia, its employees, investors and the 3,500 local communities we serve."
The Rigases weren't immediately available for comment late Wednesday night.