Adelphia Scandal

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The Adelphia Communications scandal

The Adelphia Communications Scandal
Strayer University, Online

ACC 100
September 2009 The Adelphia Communications scandal Before I get into the scandal I would like to give a brief history on how the company was founded. In 1952 John J. Rigas started Adelphia with his brother Gus Rigas. The company was based in Coudersport, Pennsylvania. The purpose for starting this company was to employ many future generations of the Rigas family. When John entered the cable communications industry it was fairly new and developing. Unknowingly to him his company would become one of the largest cable television companies in the US approximately 20 years later. On July 1, 1986, the five existing cable companies underwent a re-organization by John Rigas. Clear Cablevision, Inc., Indiana Cablevision, Inc., Western Reserve Cablevision, Inc., and International Cablevision, Inc., The companies combined created Adelphia Communications, expanding their customer base to approximately 200,000 suscribers. In August 1986, Adelphia went public and Mr. Rigas completed the acquisition of three cable systems before the end of the year. By the end of 1989 Adelphia owned cable television systems throughout Florida, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Vermont, and Virginia.
By 1992 Adelphia had become the tenth largest television cable systems operator in the country. With all of the growth and profits that Adelphia Communications was generating it was one of the top earning cable companies in the county. However, on March 27,2002, officials at Adelphia discovered approximately $2.3 billion dollars in undisclosed debt through transactions between Adelphia and the Rigas’s other entitie through the family’s private trust, Highland Holdings. The way that the loans were set up made Adelphia liable if the other entities couldn’t…...

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