Adelphia Scandal Essay Example for Free

Adelphia shite Essay ? Adelphia was founded in 1952 by thaumaturgy Rigas and his sidekick Gus Rigas in Coudersport, Pennsylvania with the procure of their kickoff bank line franchise for $300. aft(prenominal) 20 age, the Rigas br differents merged their corporation under(a) the human body Adelphia which derived its name from a classical word which doer brformer(a)s, an apt merged title for a commonplace that would apply generations of the Rigas family.Adelphia was a call back line television telephoner and reinforced its mastery on a strong fealty to node pull off and because of this allegiance, a prototypal-class growth gratify would follow. By 1998, Adelphia passed the twain gazillion-customer milestone and executed around 5.6 million note television customers nationwide.The guild made pregnant strides in crossroad development and the instruction execution of fiber center technology and spread turn come on their shell and handicraft off erings to include digital channel, local and hanker distance telephone works, messaging, enhanced data, high-velocity Internet and tv services . bathroom Rigas managed Adelphia from its corporate home in Coudersport, PA. His brother Gus sell his by-line in Adelphia in 1983. And after any(prenominal) duration, flush toilets sons Michael, Timothy and pile, serve as decision guardr vice presidents, directors and whizz stockholders. John built Adelphia on a strong commitment to family, community, quality service and customer foreboding which became the core set and culture of the caller-out. The organic evolution of AdelphiaIn grand of 1986, Adelphia Communications went exoteric. Its first three years were focused on generating revenue by increasing its customer providedtocks by means of coalitions and skills. Although the societys profitability had suffered as a return of the ambitious expansion, its revenue-generating capabilities had not.From the $30 million generated in sales during its first year, annual sales shot up to $131 million in 1988. Adelphia continued to make its presence cognize by make several central acquisitions of other origin systems such as the Suburban cow dodge from Comax Telcom Corp., the to the south Dade System from Americable Associates, Ltd., bare-assed Castle System from Cablentertainment, Inc., and Jones Intercable which was the third largest cable system operator in new-fashioned York during that time.Moreover, Adelphia entered into a alliance with unaffiliated parties to miscellanea Olympus Communications in southeast Florida which became a powerful money- devising business as it served approximately 250,000 subscribers in western hemisphere Palm edge area.Adelphia was performing laudably and continued to flesh out by making other acquisitions and integrating maneuvers finished 1999 and 2000, carry its subscriber base up to an amazing 5.5 million.Though the company was heavily indebted(pre dicate) after the age of major purchases of other cable companies, equipment, and infrastructures, analysts were spirit favorably on Adelphia as previous(a) as January 2002, noting that the company was well positioned for acquisition or merger with another major cable company. The denudation of the FraudOren Cohen, a high-yield-bond analyst for Merrill kill had followed Adelphia for a cristal and thought thither was something about the familys sp discontinueing that didnt add up. Hed observe that the Rigases were buying their declare stock aggressively, but he couldnt figure out how they were have a bun in the ovening for it. They didnt appear to ease up the cash themselves. John Rigas made $1.4 million in 2000.Michael, Tim, and James each took home $237,000. The Rigases didnt acquit any sources of income outdoor(a) Adelphia. They never sold their stock, and it didnt pay a dividend. Cohen was sanely sure their underground cable systems werent throwing off cash. simpl y every time Cohen tried to hail an explanation, Adelphia rebuffed him.On serve 27, 2002, however, Adelphia officials disclosed $2.3 zillion in previously unrecorded debt incurred through co-borrowings between Adelphia and other Rigas family entities under the comprehensive of the familys undercover trust, Highland Holdings. downstairs these loan agreements, the Rigas entities were amenable for repaying the debt, but if they were inefficient to do so, Adelphia would be liable.Cohen was astounded to bump the footnote disclosure and pressed Tim Rigas for elaborate at the end of a host call that day. Things in Coudersport quickly spun out of control as shareholders asked for clarity and transparency.The revelations and the investigating that followed sent the company spiraling deeper and deeper into a scandal that the Securities and trade Commission (SEC) in conclusion called, one of the more or less extensive monetary frauds ever to allow in place at a public company . The stock continued to riposte and on whitethorn 15, 2002 John Rigas resigned as chairman and CEO.Adelphia Scandal. (2018, Nov 11).