Business and Management
Submitted By shenqianduan
Business Analysis Using Financial Statements
Name: Shenqian Duan Date: April 3 2016
Adelphia Communication Corporation
Executive Summary: Adelphia Communications Corporation was founded in 1952 with a $300 license by John Rigas,-(Founder), Willaim T. Schleyer (Chairman and CEO), Ronald Cooper (President and COO) and Vanessa Wittman (EVP and CFO) in the town of Coudersport with its main headquarters at Greenwood Village, Colorado. The company is to Cable Television and Internet Services Provider with 275 employees. Their slogan says that “Get. Watch. Do What you want.” Adelphia backed $2.3 billion worth of personal loans to the Rigases. Rigas Management commingled Adelphia funds with family funds causing Adelphia to fund non-corporate projects, such as personal loans, real estate transactions (Purchase of Manhattan apartments for private use and Purchase of land for a private golf course), cash advances to the Buffalo Sabres, and $252 million to pay margin calls, or demands for cash payments on loans for which the family had put up Adelphia stock as collateral. The Rigases used Adelphia’s line of credit for personal purchases. The Rigases doctored financial records at Adelphia and created sham transactions and phony companies to inflate the firm's earnings and to conceal is mounting debts. Upon realizing the extent of funds taken, Tim Rigas “limited” the amount of Adelphia’s funds his father could take to $1000000/month.
The Adelphia Communications scandal broke in 2002 when a footnote in a routine quarterly earnings statement revealed that the Rigas family had borrowed more than $2 billion from the company. But they didn't pay it back. The company’s stock price plummeted after it was delisted from the NASDAQ for failure to file its...