By Joyce Kryszak
Buffalo, NY – Tuesday was another bad day for the Adelphia Communications Corporation.
The third business day of dramatic stock losses triggered a series of new problems for the beleaguered company.
According to a Wall Street Journal article late Tuesday, Adelphia Communications could face what is referred to as a "margin call" by brokers.
The call, prompted when stocks fall below accepted levels, would require Adelphia to submit additional assets to their account to restore the lost value of the stock.
If unable to provide sufficient assets, brokers could, in accordance with terms of the agreement, sell off shares to make up the difference.
Analysts speculate that much of money the company used to buy their stock was borrowed.
But many of those answers will be in the company's annual report to the Securities and Exchange Commission. Adelphia asked for a delay in filing that report.
Also Tuesday, the first of many expected lawsuits was filed against the company in Delaware.
According to the Wall Street Journal, the suit alleges violation of the Rigas family's duties of loyalty to care for Adelphia, "by knowingly and/or recklessly wasting Adelphia assets."
At the closing bell Tuesday, Adelphia stock was selling at $11.83 per share, down $1.29 per share.
Adelphia's stock has been in a free-fall since March 27, when the company disclosed $2.3-billion dollars in "off-the-book" debt.
Financial advisor Anthony Ogorek, with Ogorek Capital Management in Williamsville, said the rapidly deteriorating situation could soon spell the point of no return for the company.
Ogorek said that Buffalo city planners, who hailed Adelphia as Buffalo's economic salvation, also now have grave reason for concern.