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In re Adelphia Communications Corporation Securities Litigation
Labaton Sucharow is representing the New Jersey Division of Investment and various New York City pension funds in litigation stemming from a major accounting fraud at Adelphia Communications Corp. Adelphia, a cable company started by the Rigas family, who continued to hold large ownership positions after the company went public, filed for bankruptcy in 2002. The filing was made after the company disclosed that it had hid more than $2 billion of debt from its balance sheet that was incurred by members of the Rigas family, but that, pursuant to co-borrowing agreements, Adelphia was ultimately responsible for repaying. John Rigas and Timothy Rigas were tried and convicted for securities fraud.
The New Jersey Division of Investment and the New York City pension funds are prosecuting securities fraud actions against the Rigases, Deloitte and Touche, Adelphia’s independent auditor; and various underwriting and banking institutions. Motions to dismiss were briefed in 2004. Judge Robert McKenna has issued rulings on a number of issues in the motions to dismiss but has yet to decide many others. The class recently settled their action against Deloitte and Touche and the banks. The New Jersey Division of Investment and the New York City pension funds have opted out of those settlements and continue to press their claims.
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