Copyright 2002 Gannett Company, Inc.

USA TODAY…06/17/2002

From LexisNexis

NEW YORK — Scandal-plagued Adelphia Communications Corp. hung out more dirty laundry in a Securities and Exchange Commission filing late Friday.

The No. 6 cable operator, widely believed to be on the verge of filing for bankruptcy protection, disclosed that:

• On June 9, audit firm Deloitte & Touche said that it could not resume work on Adelphia's 2001 annual report because unnamed executives thought to have been involved in illegal activities were still working for Adelphia.

"There is no way that we would be willing to rely on their representations, and indeed, the mere fact that they remain in their positions raises additional concerns," the company wrote.

The letter appears to have crossed paths with a note that Adelphia sent to Deloitte dismissing the firm.

In response to Deloitte's charge, Adelphia said that its chief financial officer, chief accounting officer and restructuring advisers were hired May 25 and had no connection to the company in the period when the alleged lawbreaking took place.

Adelphia also said that members of the accounting, finance and bank and investor relations staff referred to by Deloitte "are being transferred to other duties pending completion" of a company investigation.

Deloitte said it would respond later in a letter to the SEC.

Thursday, Adelphia hired PricewaterhouseCoopers to be its independent accountant.

• Adelphia is investigating a $100,000 membership fee and a $600,000 investment the company made in 2000 to the Golf Club at Briar's Creek in South Carolina.

Directors want to find out whether the payment was for company business or "for the personal use by members of" the family of Adelphia founder John Rigas. The company says the board wasn't told about the payments.

• Adelphia stopped work on an 830-acre golf club and course it was building on Rigas-owned property near company headquarters in Coudersport, Pa. It has also fired the 11 people still working on it.

• Adelphia discovered $1.9 million in outstanding loans to "current and former employees." It has taken a reserve of $500,000 against possible non-payment.

• Seven people on the Adelphia payroll were there "to provide services to members of the Rigas family," the company says. They've all been fired or moved to the Rigas' payroll.

Adelphia shares closed at 15 cents, up a penny, in over-the-counter trading Friday before the filing to the SEC.