The bad news from Adelphia Communications Corp. continued late Friday when
the company filed an 8-K statement with the Securities and Exchange Commission
stating that it is investigating additional loans to employees and expenditures
for a golf-club membership.
On Oct. 30, 2000, Adelphia purchased one membership in the Briar Creek Golf
Club in South Carolina for $700,000, which was paid through Adelphia's Cash
According to the filing, Adelphia 'is investigating this transaction and
whether the membership interest was purchase primarily for purposes relating to
the business of the company, or was purchased primarily for the personal use by
members of the Rigas family.' The filing stated that the membership was neither
presented nor approved by the board of directors.
Also in the SEC filing, Adelphia said that in addition to a possible $700,000
loan made to former vice president of finance Jim Brown, the MSO identified
loans made to current and former employees totaling $1.9 million. Adelphia, the
filing said, has taken a reserve of approximately $500,000 against nonpayment of
In addition, loans were made to eight current and former employees of
Adelphia's competitive-local-exchange-carrier subsidiary, Adelphia Business
Solutions, for a total of $278,000.
The MSO also said it has taken action regarding five employees who had worked
under Brown, transferring them to other duties inside the company. Those
employees are cooperating with the investigation being done by the counsel to
Adelphia's special committee of independent directors.
The company has identified seven employees on the Adelphia payroll whose
primary function was to provide services to members of the Rigas family. All
seven were either terminated by the company or transferred to the Rigas family's
payroll, the filing stated.