Adelphia Communications Corp. has offered two government agencies $725 million to settle claims against the company and certain members of the Rigas family related to its accounting scandal.
In a securities filing Thursday, Adelphia said it has offered $725 million to the U.S. Securities and Exchange Commission and the U.S. Department of Justice, about $125 million of which would be part of a litigation trust funded from potential proceeds from litigation by or on behalf of Adelphia.
The settlement proposal stems from an SEC civil-enforcement action made June 24, 2002, against Adelphia and certain members of its founding Rigas family alleging various securities-fraud and improper-books-and-records claims arising out of the alleged fraud perpetrated by the Rigases.
Last July, two members of the Rigas family -- founder and former chairman John Rigas and former chief financial officer Timothy Rigas -- were convicted in federal court of 18 counts of fraud and conspiracy stemming from a scheme to loot hundreds of millions of dollars from the company for their personal use. John and Timothy Rigas are scheduled to be sentenced April 18, and they face up to 30 years in prison.
Former executive vice president of operations Michael Rigas was found not guilty of conspiracy and wire fraud in July, but the jury deadlocked on 15 counts of securities fraud. Michael Rigas is scheduled to be retried on the securities-fraud charges Oct. 24.
Adelphia said in the filing that negotiations with the DOJ and SEC are continuing. The filing also stated that the deadline for it to respond to the SEC civil action is March 31, but that the action has been stayed until April 29.
It is unclear whether the government will accept the Adelphia settlement proposal, but according to published reports, it could push back the date that the company had unofficially set to decide whether it will sell its assets or emerge from bankruptcy protection as a new entity.
Adelphia had said that it would like to make a decision by March 31. More than 50 parties submitted bids for the MSO’s 5.4 million subscribers, but the front-runner is still thought to be Time Warner Inc. and Comcast Corp., which have submitted a joint bid estimated at $17.6 billion.
Adelphia spokesman Paul Jacobson said in a statement that the March 31 date was a goal, never a deadline.