Adelphia Misses Payment Date, Hires New Auditor
Cable operator Adelphia Communications Corp. has missed a $51.25 million interest payment, a move which may bring the company one step closer to a bankruptcy filing. "It's highly unlikely they can avoid bankruptcy at this point," said Sean Egan, managing director of Egan-Jones Ratings, a Philadelphia-based investment ratings company. "There are simply too many mounting obligations and no willing buyers to take a chance buying their assets." An interest payment was also missed by the company's subsidiary, Arahova Communications Inc., which failed to meet the deadline for a $4.19 million payment.
The company was dropped from Nasdaq two weeks ago after it failed to file its required 10-K annual report with the Securities and Exchange Commission (SEC).
Last week Adelphia was in the news when it fired its auditors, Deloitte & Touche, after restating earnings for 2000 and 2001. The company is being investigated by the SEC and two federal grand juries for failing to report off-balance sheet loans of more than $3 billion to company founders, the John J. Rigas family, and to companies controlled by the family.
Adelphia has now retained the services of PricewaterhouseCoopers (PwC) as independent accountants and has indicated that PwC will make filing the overdue 10-K report its first priority.