Adelphia Communications Fires Deloitte, Restates Earnings
Adelphia Communications Corp., the nation's sixth-largest cable television company, has announced it has fired its auditor, Big Five firm Deloitte & Touche, in the midst of a firestorm of publicity surrounding a necessary restatement of earnings for 2000 and 2001. The firm has said it plans to hire a new accounting firm, but no firm has yet been named.
Adelphia is currently under investigation by the Securities and Exchange Commission (SEC) as well as two federal grand juries since disclosing deals involving off-the-books loans to the family of company founder, John J. Rigas as well as to companies controlled by the Rigas family. These loans are estimated at more than $3 billion.
In addition, the company has missed deadlines to file reports with the SEC, including its annual 10-K financial report. Debt payments have been missed and the company has defaulted on agreements with creditors.
Adelphia division Century Communications filed for Chapter 11 bankruptcy protection from creditors earlier this week, and analysts have suggested that this filing is a harbinger of a similar filing forthcoming from the parent company.
Officials at Deloitte & Touche have been unavailable for comment.