Adelphia Ex-Director Tells of Cancun Meetings

Adelphia Communications Corp. held all-expenses-paid board meetings with its bankers in Cancun, Mexico, that spanned several days and featured tennis, golf and scuba diving, a former director told jurors Wednesday.

Testifying at the fraud trial of founder John Rigas and two of his sons, the former director, Dennis Coyle, recounted how Adelphia picked up the tab when he and his wife flew to Cancun and stayed at the Ritz-Carlton hotel from March 5 to March 10, 2002.

Coyle said the trip included “quite a full slate of activities,” including meetings with the board and bankers. “I did go scuba diving once, maybe two times,” Coyle told jurors on cross-examination in federal court in New York. “That was paid for by Adelphia.”

Coyle was on the witness stand a sixth day as defense attorneys sought to undermine earlier testimony that he didn’t know the Rigases borrowed money to buy stock and debt in Adelphia, the No. 5 cable television operator.

Prosecutors say the Rigases hid the use of loans taken jointly by family businesses and Adelphia to fund their stock purchases.

John Rigas, 79, and his sons, Timothy, 47, and Michael, 50, are charged with stealing $100 million from Adelphia, including $52 million in cash advances. The Rigases are accused of taking personal trips on company planes, spending $13 million on a golf course and $700,000 on a golf club membership.

Under questioning by Paul Grand, an attorney for former finance chief Timothy Rigas, Coyle said he went to company meetings in Cancun five or six times during his tenure on Adelphia’s board from 1995 to 2003.

The wives of directors and top officers joined Adelphia’s bankers on the trips, according to the testimony from Coyle, general counsel at Florida Power & Light Co.

Grand assailed Coyle’s direct testimony that he didn’t know until March 27, 2002, that the Rigases used syndicated loans to buy Adelphia securities. Adelphia disclosed that day it had $2.3 billion in off-balance-sheet debt and that the loans funded some Rigas stock purchases. The stock plummeted, and the company filed for bankruptcy protection three months later.

Under Grand’s questioning, Coyle conceded several instances in which he knew that the Rigases tapped the syndicated loans to buy Adelphia stock and debt. The Rigases have claimed the purchases were meant to show their faith in the company as its debt soared in the late 1990s.