AT&T Broadband CEO William Schleyer got a surprising backer in his bid to become the next CEO of embattled Adelphia Communications Corp.: ousted former chairman John Rigas.
Rigas -- who, along with his sons, Michael and Timothy, is under federal indictment for allegedly looting the MSO for their own personal gain -- issued a statement late Tuesday backing Schleyer and AT&T Broadband chief operating officer Ron Cooper as Adelphia's CEO and COO, respectively.
Sources said Tuesday that Adelphia is continuing to negotiate with both Schleyer and Cooper and hopes to reach a deal in the next two weeks.
"My family and I are pleased to learn that Adelphia, apparently at the behest of its creditors, is considering the appointments of William Schleyer and Ron Cooper, two highly competent, experienced and successful cable-industry veterans, to top operating positions," Rigas said in the statement.
"Since our departure in late May, we have been increasingly concerned with what appears to be a rapid deterioration of Adelphia shareholder value under successor management. We are hopeful, should Mr. Schleyer and Mr. Cooper accept these positions, that their qualified leadership would restore shareholder value to the company we did our best to build over the last 50 years."
Rigas' "departure" was at the behest of Adelphia's board of directors. In July, the company sued its former chairman, his two sons, former vice president of finance James Brown and former assistant treasurer Michael Mulcahey, charging them with violation of the Racketeer Influenced and Corrupt Organizations Act, breach of fiduciary duties, waste of corporate assets, abuse of control, breach of contract, unjust enrichment, fraudulent conveyance and conversion of corporate assets.
The Rigases, Mulcahey and Brown were also indicted by federal prosecutors on 24 counts of conspiracy, bank fraud, securities fraud and wire fraud in September. Each of the men pleaded innocent to the charges.
What Rigas also neglected to mention is that the biggest drop in shareholder value at Adelphia occurred during his family's watch. Adelphia stock, now trading at about 12 cents per share, was trading in the $20 range prior to March 27, when the company acknowledged that it was responsible for $2.3 billion in off-balance-sheet loans made to the Rigas family.
Later, a series of self-dealing arrangements by the Rigases helped to steer the company into Chapter 11 bankruptcy, where it remains today.