Risk Management

Adelphia Ordered to Pay Rigas Legal Fees

The former cable company chief's attorneys will get $12.8 million from the company he stands accused of defrauding.
Ed ZwirnFebruary 20, 2004

Former Adelphia Communications Corp chief John Rigas and two of his sons may face difficulties at their fraud trial in U.S. District Court New York, which starts Monday. But one thing has gotten easier: paying the lawyers.

Indeed, Adelphia must pay $12.8 million to help Rigas and family defend themselves, Bloomberg reported, according to a Tuesday ruling by U.S. Bankruptcy Judge Robert Gerber reported by The New York Post.

Rigas, who resigned as chairman and chief executive in May 2002, and his sons Timothy and Michael, who were former company executives, had sought $15 million, according to the newspaper. The judge said the Adelphia funds may only be used to cover criminal defense expenses.

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The charges against Rigas, his sons, and former Adelphia director of internal reporting Michael Mulcahey include: fraudulently excluding more than $2.3 billion in bank debt from Adelphia’s financial statements and misrepresenting the company’s performance by reporting inaccurate metrics concerning the number of cable subscribers, the amount of cable plant upgrades, and the company’s EBITDA. They’re also accused of using and not reporting a material amount of corporate funds for self-dealing by the Rigas family.