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Rigases Try to Block Adelphia Pay Plan

February 19, 2003|From Associated Press

Indicted Adelphia Communications Corp. founder John Rigas has asked a judge to block a plan by the company that could pay two new executives nearly $41 million.

In a four-page filing in federal Bankruptcy Court, Rigas and three of his sons also objected to Adelphia's plans to move the company to Denver from Coudersport, Pa., where it was founded more than 50 years ago.

Adelphia picked former AT&T Broadband executives William Schleyer and Ronald Cooper last month as its new chief executive and chief operating officer, hoping their leadership could revive the ailing cable provider.

A committee of stockholders who lost millions of dollars in the bankruptcy also objected to the pay package. The committee argued in a filing Saturday that the deal shows "egregious failure to exercise sound business judgment."

The deal guarantees the pair $23.9 million, and with incentives could pay them $41 million over three years, the committee said. Adelphia has said the compensation deal is appropriate.

But the Rigases argued in papers filed Friday that the proposed compensation plan is full of "front-loaded incentives" designed to please the company's creditors -- not to ensure Adelphia's long-term health.

The family also said the company should remain in Pennsylvania because most of its operations and cable subscribers are in the Northeast.

Adelphia filed for bankruptcy protection in June after revelations that it had guaranteed billions of dollars in debt taken on by firms controlled by the Rigas family. Prosecutors say Rigas, his sons and other company executives looted Adelphia.

Rigas was indicted in September on federal fraud charges.

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