Rigases object to Adelphia's planned move to Denver
Copyright 2003 P.G. Publishing Co.
Pittsburgh Post-Gazette (Pennsylvania)
March 27, 2003 Thursday ONE STAR EDITION
Adelphia Communications Corp.'s plan to move its corporate headquarters to Denver from the Pennsylvania town of Coudersport, Potter County, is a waste of the bankrupt cable television operator's resources, said John Rigas, who's charged with defrauding the company he founded.
The relocation is being orchestrated for the convenience of Chief Executive Officer William Schleyer and Chief Operating Officer Ronald Cooper, who worked at the Denver offices of AT&T Broadband before joining Adelphia, Rigas and three of his sons said in papers filed in U.S. Bankruptcy Court in New York. Cooper still lives in Denver, the Rigases say.
"Mr. Cooper's convenience, even with the endorsement of Mr. Schleyer, is hardly a basis to uproot a company and is not justified by any legitimate business reasons," the Rigases said.
The Rigases made an unsuccessful effort last month to block Adelphia's board from hiring Schleyer and Cooper. They also joined other Adelphia shareholders and some creditors in opposing the three-year compensation package the two men got. U.S. Bankruptcy Judge Robert Gerber ruled this month that Adelphia could pay the two executives $41 million to lead the No. 5 U.S. cable operator.
"The company will make its case to the court that this move is essential to rebuilding the company," Adelphia spokesman Eric Andrus said. "It will enable the company to hire high-caliber management with the strong cable experience that is needed."
A hearing on the planned move is scheduled for tomorrow before Gerber.
Adelphia, which sought bankruptcy protection in June, is struggling to overcome more than $20 billion in debt and restore its reputation as it tries to emerge from Chapter 11. Rigas, his sons Michael and Timothy, and two other former executives were arrested in July and charged with defrauding the company of more than $2.5 billion.
The Adelphia equity shareholders' committee also opposes the move. The committee said it was concerned the company will have to pay higher salaries in Denver and that a "wholesale replacement of headquarters management" might create transition problems for Adelphia.
The Rigas family owns a home and other property in Coudersport and has strong ties to the community, which was cited by the company as one of the reasons it wants to move about 150 employees, including the management team, to Denver.
"The remoteness of Coudersport contributed to an environment that allowed the Rigases' misconduct to occur," Adelphia said in court papers filed this month.
The company employs about a third of Coudersport's 4,000 residents, and says it will keep a "significant portion" of its operations there.
The Rigases say Coudersport is the logical place for the company to be located, since its cable television systems operate mainly in the Northeast.