By Mark Scott
Coudersport, PA – Adelphia Communications Corporation Thursday announced the resignation of Timothy J. Rigas, the Company's Executive Vice President, Chief Financial Officer, Chief Accounting Officer, and Treasurer. The announcement was made by Chairman and Interim Chief Executive Officer, Erland E. Kailbourne.
Timothy Rigas' resignation comes one day after his father, John Rigas, stepped down in favor of Kailborne.
Adelphia also announced that a Special Committee of the Board consisting of three independent directors will have broad powers to conduct a full and thorough investigation into a number of issues, including ones regarding transactions between the company and certain entities controlled by the Rigas family.
Leslie J. Gelber is Chairman of the Special Committee. Gelber is the President and Chief Operating Officer of Caithness Corporation. The other members of the Special Committee are Dennis P. Coyle, General Counsel and Secretary of the FPL Group, Inc., and Florida Power & Light Company, and Kailbourne, the former Chairman and Chief Executive Officer of Fleet National Bank (New York Region), a member of the New York State Banking Board and a director of six companies.
Timothy Rigas' resignation is effective immediately. Beginning Thursday, the company's CFO responsibilities will be managed on an interim basis by the Special Committee and outside financial advisers. The company is currently in the process of identifying a successor in the immediate future. Mr. Rigas will retain his seat on the Board of Directors.
"Adelphia is a company with tremendous assets, some of the best franchises in the cable industry, strong revenues and a great commitment to customer service," Kailborne said. "In the coming days and weeks, we are going to take the actions necessary to build on that solid foundation and put the company on a path of renewed growth.
"Right now, Adelphia is under scrutiny and the Special Committee and I are totally committed to addressing all issues head-on and resolving them quickly and thoroughly. In so doing, we will act in the interest of all shareholders, lenders, employees and our customers," Kailborne continued. "Our top priority is to restore the confidence of our lenders, shareholders and the marketplace as a whole. The only way to do that is to have a complete, unflinching review of all the questions that have been raised -- and to make a full and candid disclosure of each and every problem the company finds to exist.
Reaction continues to Wednesday's news that John Rigas stepped down as chairman. It was the the latest in a series of developments that began in late March when Adelphia disclosed it was carrying $2.3 billion dollars in off-the-books debt. Also Wednesday, NASDAQ halted trading in Adelphia stock pending the company's release of additional information. And the company was scheduled to attend a "de-listing" hearing at NASDAQ on Thursday.
Lew Mandell is a professor at the University at Buffalo's School of Management. Click the "listen" icon above to hear Mark Scott's conversation with Mandell about the Adelphia crisis.