Rigases Paying Off $1 Million in Card Debt, Lawyer Reveals

Adelphia Communications Corp. founder John Rigas, convicted of conspiracy and fraud in July, and his family have been paying off at least $1 million in credit card debt while creditors of the cable company await their own payments.

The family’s monthly bills include a $35,000 minimum payment on a Neiman Marcus credit card, Lawrence McMichael, a lawyer representing Rigas and his sons, told U.S. Bankruptcy Court Judge Robert Gerber in New York on Friday.

McMichael disclosed the payments as Rigas and his sons asked the court to advance $8.1 million for their criminal defense and $3.6 million to defend civil suits. Gerber previously granted access to $23.8 million of frozen assets for their criminal defense and $4 million for civil fees. Adelphia, the No. 5 U.S. cable TV operator, opposes the request, arguing that the money doesn’t belong to the Rigases.

“The Rigases have been paying off credit card debt in seven figures to keep from defaulting,” McMichael said. “The minimum payments are very large. They are also paying monthly expenses to keep family-owned businesses running. John Rigas, whatever happens in this case, will wind up a pauper.”

Gerber, who will rule on the request next week, froze Rigas family assets after Adelphia sought Chapter 11 protection in 2002 and later authorized the Rigases to make minimum payments on the debt. Gerber wanted to avoid giving credit card companies claims in the bankruptcy, McMichael said.