Adelphia Communications Corp.'s troubles continued to mount Wednesday, as it
announced that the Securities and Exchange Commission has launched a formal
investigation of its off-balance-sheet partnership transactions.
The SEC had begun an informal investigation of Adelphia April 3. In a formal
investigation, the commission has subpoena power to obtain documents and
testimony from the targeted company.
Adelphia's problems began March 27, after it announced that it could be
liable for about $2.3 billion in loans made by an off-balance-sheet partnership
called Highland Holdings and controlled by the Rigas family.
The Rigases -- who used some of those loans to buy Adelphia stock -- are the
MSO's largest shareholders and dominate top management at the company.
On April 4, Adelphia said it had hired four investment bankers to look into
its options, including asset sales.
Adelphia missed a 15-day deadline Tuesday to file its 10-K annual report, and
its stock has dropped more than 60 percent. At least one-dozen shareholder
lawsuits have been filed against the company.
Adelphia stock was down about 46 cents each, or 5.7 percent, to $7.56 per
share in early afternoon trading Wednesday.