Adelphia
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| Adelphia Communications Corporation | |
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| Type | Defunct |
| Founded | 1952 |
| Headquarters | Greenwood Village, Colorado |
| Key people | William T. Schleyer, Chairman and CEO Ronald (Ron) Cooper, President and COO Vanessa Wittman, EVP and CFO |
| Industry | Telecommunications |
| Products | Cable television, Internet Service Provider |
| Revenue | $3.61 billion (2003) |
| Employees | 275 |
| Website | http://www.adelphiarestructuring.com/ |
Adelphia Communications Corporation, named after the Greek word "brothers", was the fifth largest cable company in the United States before filing for bankruptcy in 2002 because of internal corruption. Adelphia was founded in 1952 within the town of Coudersport, Pennsylvania. The headquarters for the company 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. Currently, LFC [1], an internet-based real estate marketing firm, is auctioning 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.[1] 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 dollars. 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. [2] 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. It plans to sell most of its remaining real estate assets via a large Internet property auction. [2]
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[edit] Dissolution
Adelphia's Chapter 11 bankruptcy reorganization has been marked by extensive disputes between creditors over the distribution of proceeds.[citation needed] 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 was allowed to distribute approximately $6 billion in shares to Adelphia stakeholders and succeed Adelphia as a publicly traded corporation.[3]
[edit] 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 [4]. 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-sheet 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. 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 is scheduled for a second trial. Former Adelphia assistant treasurer Michael Mulcahey was acquitted of all charges.
John and Timothy Rigas started their prison sentence at the Butner Federal Correctional Complex near Raleigh, North Carolina on August 13, 2007. John received 15 years and Timothy received 20 years.
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[edit] Adelphia Coliseum
One previous marker of Adelphia's success before its bankruptcy included its 1999 purchase of the naming rights to a football stadium, Adelphia Coliseum in Nashville, Tennessee. 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 remained without a naming rights sponsor for four years before becoming LP Field in 2006.
[edit] See also
[edit] References
- ^ Adelphia Communications to sell long-distance phone service, Pittsburgh Post-Gazette, July 6, 2005, Adelphia sells long-distance service for $1.2M, Denver Business Journal, July 6, 2005, and Notification by Adelphia Telecommunications, Inc. and Telecom Management, Inc. d/b/a Pioneer Telephone of an Asset Purchase Agreement, December 1, 2005.
- ^ Adelphia's assets now in hands of cable giants, Rocky Mountain News, August 1, 2006.
- The Year-Long Comcast Saga. Retrieved on December 11, 2007.
[edit] External links
- LFC Adelphia Bankruptcy Real Estate Auction
- Customer Portal
- Adelphia chapter 11 bankruptcy site
- News article on Rigas' conviction
- News article on Adelphia's decision to offer X-rated pornography
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