Adelphia Communications Corp. has decided not to pay founder and former
chairman and CEO John J. Rigas his $4.2 million severance package, according to
a source familiar with the situation, Dow Jones reports.
The company, which is operating under bankruptcy-court protection, has made
no payments to Rigas and doesn't anticipate doing so, the source said
When Rigas, who founded the company 50 years ago, stepped down in May,
Adelphia -- then sliding toward bankruptcy amid an accounting scandal -- agreed
to pay him $1.4 million per year for three years.
Then in July, federal prosecutors filed charges against Rigas, two of his
sons and two other executives, accusing them of looting the company. The MSO
also sued Rigas and certain other family members.
Rigas has denied wrongdoing.
The company hasn't decided whether to take action regarding other, noncash
aspects of Rigas' severance, the source said. Those include health-care coverage
for Rigas and his wife for the rest of their lives; Rigas' use of an office,
equipment and a secretary; and his use of company planes for emergencies,
according to a document filed with the Securities and Exchange Commission in
The severance arrangement would terminate if Rigas is convicted of a felony,
according to the document.
Peter Fleming, a lawyer for Rigas, said Wednesday that he stood by a
statement made earlier in which he called it 'more than disturbing when anyone,
including a corporate board, would decide to breach a contract presumably signed
in good faith.'