SEC Filing Details Deals by Rigases
The Rigas family that controlled Adelphia Communications Corp. since its founding in 1952 used the publicly traded cable company to finance an assortment of personal businesses, including a professional hockey team, a film production company, an interior design firm, landscape and maintenance ventures and a car dealership, according to a regulatory filing Friday by the company.
John Rigas and his three sons relinquished control of the nation’s sixth-largest cable company Thursday, under pressure from creditors and outside directors. The company is under investigation for questionable accounting practices involving $3.1 billion that the family borrowed, using the public company as a guarantor.
The company, the largest cable provider in Southern California, is struggling to stave off bankruptcy amid a cash crunch and defaults on several of its loans.
Adelphia’s disclosures Friday were the first detailed account of transactions between the Rigases and the cable company they controlled through ownership of 60% of the voting shares. In a filing with the Securities and Exchange Commission, a special committee of outside directors of Adelphia said it was continuing to investigate a series of transactions between the family and the public company.
For example, since January 2001, the family used corporate funds to cover $241 million in margin calls, when lenders seek repayment of loans collateralized by stock that has plunged in value.
According to the SEC filing, Adelphia also lent $150 million to the Buffalo Sabres hockey team, owned by the Rigas family, and $3.7 million to a production company that financed “Songcatcher,” a film released by John’s daughter, Ellen Rigas Venetis, a New York filmmaker.
Private companies owned by the Rigases also benefited by providing services to Adelphia. Two companies owned by the Rigas family collected $12.8 million from Adelphia in 2001 for furniture and interior design services. Rigases’ Wending Creek Farms collected $2 million the same year for snow removal, landscaping and other maintenance services.
Under another transaction, Adelphia bought timber rights from a third party in February 2000 for $26.5 million. In 2020, the rights revert to the owner of the timber land. About the same time the deal was struck, the Rigases bought the 3,656 acres for a little more than $465,000, meaning that they eventually will end up with the timber rights.
The other transaction involved a world-class golf course being built by the company. All but 169 acres of the course’s 830 acres are owned by Rigas family partnerships, although there is no record of lease transactions between the family and the company for the use of the land.
Adelphia shares resumed trading Thursday after a six-day halt and plunged 54% to $2.62 on Nasdaq. They have declined nearly 90% since the March disclosures, but inched up 15 cents Friday to $2.77.
