Former Adelphia Communications Corp. chief financial officer Christopher
Dunstan has alleged that the troubled Coudersport, Pa.-based MSO failed to hire
an independent investigator to look into questionable transactions involving one
of its board members.
In a Securities and Exchange Commission filing late Friday, Adelphia said
that in his resignation letter dated March 17, Dunstan claimed that the company
failed to disclose the transactions with the board member and allegedly
discouraged him from making such allegations.
Dunstan did not identify the board member in his letter, nor did he disclose
the nature of the transactions.
However, sources familiar with the matter said Dunstan's allegations related
to stock options awarded to an independent board member in the late 1990s,
before that person was a member of the board. The source also declined to
identify the board member, but said he remains on the board of directors.
The source also stressed that Dunstan's resignation was not because of the
allegations. Adelphia had begun negotiations with Dunstan about a separation
March 6, according to the SEC document. He officially resigned March 21, the
same day Adelphia hired a new CFO, former 360Networks Corp. CFO Vanessa
Adelphia said in the SEC document that it launched an inquiry into Dunstan's
allegations in February and concluded the factual investigation in early
"Based on the information that it has received to date, the company expects
to conclude that the actions by the director in question do not rise to a level
of materiality or importance to the company's security holders so as to require
disclosure at this time," Adelphia said in the filing.
"The company intends to investigate the remaining allegations contained in
Mr. Dunstan's letter," the MSO added.