Adelphia Ex-Director Tells of Rigas Loans

Former Adelphia Communications Corp. director Dennis J. Coyle first learned that members of the Rigas family had borrowed more than $2 billion from the company during a board meeting in February 2002, according to his testimony Monday at the fraud trial of company founder John Rigas and two of his sons.

During that board meeting, former Adelphia director Erland Kailbourne asked how much the Rigas family, founders of the company, had borrowed under agreements where the company guaranteed debt of other Rigas-owned entities, Coyle testified.

Adelphia’s former vice president of finance, James Brown, who has pleaded guilty in the case, told the directors that the Rigases had borrowed about $2.28 billion under the agreement, Coyle said.

In response to a question by prosecutors, Coyle said the debt was “way too large” for the Rigas-owned entities to support, based on their earnings.

A month later, Adelphia executives disclosed the amount borrowed when year-end earnings were released, triggering a lending crisis that drove the company to file for bankruptcy protection in the second quarter.

The government has accused former Adelphia Chairman John Rigas, and his sons, Michael and Timothy Rigas, of looting the company and misleading creditors and investors. Along with former executive Michael Mulcahey, they have been charged with wire fraud, bank fraud, securities fraud and conspiracy. All four have pleaded not guilty.

Coyle also told the jury that he was the target of lawsuits by shareholders of Adelphia and by shareholders of Florida Power & Light, where he is a director.

The Adelphia shareholder lawsuits allege he signed public filings that contain material misstatements and that, as a director, he should have known of the Rigases’ alleged misdeeds earlier, he testified.

Florida Power & Light shareholders are suing him over compensation after a canceled merger, Coyle said.