By Mark Scott
Coudersport, PA – Federal prosecutors are investigating the accounting practices of Adelphia Communications. Grand jury investigations have been launched by U.S. Attorneys in Pennsylvania and the Southern District of New York. The company also announced today it missed interest payments this week on some of its notes. Documents have been subpoenaed from the company's Coudersport, Pennsylvania headquarters by the Securities and Exchange Commission.
Adelphia had a hearing Thursday before the National Association of Securities Dealers (NASD) regarding the possible delisting of the company's shares from the Nasdaq stock market. On Tuesday, Nasdaq suspended trading in Adelphia's shares. The NASD announced no decision following the hearing, though the company did appear to escape an immediate de-listing. Adelphia expects to receive an indication from the NASD in the near future regarding the company's listing status.
"We appreciate the opportunity to discuss with the NASD our Company and the actions that our Special Committee of independent directors is taking to restore the integrity of Adelphia's financial reporting," newly appointed Chairman and interim CEO Erland E. Kailbourne said. "We are determined to have a company that is based on the principle of full and accurate disclosure of information to shareholders. As we move forward, we will of course be cooperating fully with the NASD."
Adelphia also announced Friday that on May 15th it missed a $23,437,500 interest payment on its 9-3/8% Senior Notes due November 15, 2009, and a $6,468,750 dividend payment on its 7-1/2% Series E Mandatory Convertible Preference Stock.
"The company decided not to make these payments on outstanding bonds and preferred shares because we are now pursuing a thorough evaluation of Adelphia's business objectives and financial requirements," Kailborne explained. "Adelphia has valuable assets, and we are working to restore the confidence of our lenders and shareholders."