Rigas family relinquishes control
By John M. Higgins -- Broadcasting & Cable, 5/24/2002 6:45:00 AM
The Rigas family surrendered control and $1 billion in assets to try and ease the financial crisis at Adelphia Communications Corp., but the company's problems are far, far from over.
Ex-chairman John Rigas and his three sons agreed to give up their seats on the company's board.
Adelphia's board also called for Peter Venetis, a son-in-law of John Rigas, to resign from the board.
The family agreed direct $567 million in cash-flow cable systems it owns to Adelphia to help service the debt.
Also, all common and preferred stock held by the family will be pledged to Adelphia as collateral for the balance of the loans.
The family also put all of its Adelphia stock into a voting trust until it can repay the loans.
The big surprise: Adelphia disclosed that as of April 30, Adelphia is on the hook for a total of $3.1 billion in co-borrowings with Rigas family companies. That's $500 million more than some analysts expected and it's not clear where the extra debt came from.
Most important, there's no word on whether Adelphia's banks are going to offer badly needed liquidity to keep the cable operator out of bankruptcy court.
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