Rigases Tap Family Cable Firms for Defense - Multichannel

Rigases Tap Family Cable Firms for Defense

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With their personal fortune dwindling, four members of the Rigas family were allowed to tap into revenue generated by several family-owned cable companies to help pay for what could prove to be a costly defense regarding civil and criminal lawsuits against them.

On Aug. 1, U.S. Bankruptcy Court Judge Robert Gerber approved a controversial plan to allow the Rigases to use revenue generated by five private family cable partnerships to pay for their legal defense.

Former Adelphia Communications Corp. chairman John Rigas and his sons — former chief financial officer Tim, former executive vice president and COO Michael and former executive vice president of strategic planning James — were named in a civil lawsuit filed by Adelphia on July 25, 2002.

That action is separate from federal charges against John, Tim and Michael Rigas last July. James Rigas, who was not charged in the federal suit, was named only in the civil action.

Rigas family members have claimed that the cost of mounting a defense was exceeding their personal holdings and that they needed to tap into the partnerships to meet those obligations.

The Rigases also claimed that a court order prohibiting them from selling any properties in which Adelphia is a part owner has limited their resources.

According to the request filed with the bankruptcy court on July 18, so far the Rigases have been able to sell one property for $519,000.

The Rigases were asking that $5 million immediately be made available to pay back attorneys.

Adelphia and several company creditors had objected to letting the Rigases gain access to the revenue of the properties, claiming that they lose money and could leave the MSO picking up the tab.

Rigas attorney Lawrence McMichael did not return calls.

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