Settled: September 23, 2013
Labaton Sucharow represented 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 opted-out of Class-wide settlements and resolved all of their claims against (i) the Rigas family; (ii) Deloitte and Touche, Adelphia's independent auditor; (iii) various underwriting and banking institutions; (iv) various outside directors of Adelphia; and (v) Buchanan Ingersoll, Adelphia's outside legal counsel.