The myriad woes of cable TV operator Adelphia Communications Corp. continued to mount yesterday as its chief financial officer resigned, the company missed an interest payment and it disclosed more details of a sweeping internal probe into its financial dealings.
Timothy J. Rigas' resignation as CFO came a day after his father, John J. Rigas, quit under pressure as head of the cable TV company he founded in 1952. The resignations came amid Adelphia's plunging stock price, deteriorating financial condition and a federal investigation into accounting and loan practices.
John and Timothy Rigas, however, will retain seats on the board of directors of Adelphia, which their family still controls. The Rigas family owns 20 percent of Adelphia's shares but has 60 percent voting control.
Adelphia missed a $23.4 million interest payment Wednesday. The company, based in Coudersport, Pa., has 30 days before being in default.
The company's troubles started in late March, when it disclosed that it guaranteed $2.3 billion in loans to partnerships controlled by the Rigas family that wasn't accounted for on its books. Some of the money was used by the family to buy additional Adelphia stock.
Since then, Adelphia's stock has plunged more than 80 percent. The company is struggling to avoid being de-listed by Nasdaq and formally told the Securities and Exchange Commission on Wednesday that it won't file its financial report on time, pending the review of its finances.
Adelphia detailed plans for a special committee made up of independent directors to investigate transactions involving the Rigas family and Adelphia, which reportedly include investments in land and golf courses.
In a statement, interim Chief Executive Officer Erland E. Kailbourne, former chairman of Fleet National Bank's New York region, pledged that the special committee is "committed to addressing all issues head-on and resolving them quickly and thoroughly."
Adelphia's stock did not trade yesterday, pending the decision by Nasdaq.
James Bates is a staff writer for the Los Angeles Times, a Tribune Company newspaper.