Rigases Settle with U.S. for $715M
By John M. Higgins -- Broadcasting & Cable, 4/25/2005 12:27:00 PM
Adelphia Communications Corp. founders the Rigas family have agreed to settle a federal fraud investigation by paying $715 million to an investor fund.
U.S. Attorney General Alberto Gonzales said that Adelphia founder John Rigas and his family have agreed to turn over 95% of the family's assets, or about $715 million. The money will go into a government fund that will be used to compensate investors who lost money by fraud committed by the Rigas family, which no longer controls the company.
The money will come out of the proceeds of the sale of most of Adelphia’s systems to Time Warner Inc. and Comcast Corp for $17.6 billion in cash and stock.
But the settlement means that’s less money to go around to creditors.
Investors lost billions of dollars when Adelphia collapsed in 2002 after disclosures that members of the company's founding family were siphoning millions of dollars from the company for personal use and had misrepresented the company's financial condition.
The scandal forced the company to seek Chapter 11 protection and resulted in the conviction last summer of founder John Rigas, and his son Timothy, the former chief financial officer.--Bill McConnell contributed to this report.
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