2010-01-23 / Front Page

Rigas settlement described as ‘paper work’

Media accounts of a court order in a class action suit against former leaders of Adelphia overstate the impact, according to a lawyer for the Rigas family.

A judge approved a $6.7 million settlement of a suit against 10 executives and directors. Among the defendants are John Rigas and his three sons, along with his son-in-law. However, attorney Lawrence McMichael says the settlement was reached three years ago and payment was made. He called the order a paperwork procedure.

Plaintiffs are investors who bought securities between 1999 and 2002, when the company spiraled into bankruptcy.

They claimed Adelphia directors caused stock prices to rise by understating debt, overstating capital, and concealing sources of funds.

John Rigas, 85, and son Tim, 53, are serving a prison term in Butner, N. C. They also face federal tax fraud charges, with possible trial later this year, for allegedly evading more than $300 million of taxes by diverting money from Adelphia for the benefit of family members. The Rigas family in 2004 agreed to surrender more than 95 percent of its assets as part of the criminal case, including cable systems worth about $715 million.

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