- The Washington Times - Tuesday, June 11, 2002

PHILADELPHIA (AP) Adelphia Communications, under investigation for questionable accounting practices between the company and partnerships controlled by the family of founder John J. Rigas, said yesterday it had dismissed Deloitte & Touche as its accountant.
And board member Leonard Tow, chairman of Citizens Communications and Adelphia's largest minority shareholder, said he resigned yesterday after less than two weeks on the board because of the "ongoing serial disclosures of wrongdoing" at the company.
Adelphia, one of the nation's largest cable television companies, acknowledged inflating subscriber and revenue figures, saying in a Securities and Exchange Commission filing that it was revising the subscriber count downward by more than 47,000 to 5.76 million, still far ahead of No. 3 Cablevision Systems Corp.'s 3 million.
Adelphia also disclosed that it was revising last year's revenue figure sharply downward to $3.51 billion from the $3.58 billion stated in its earnings report, and its revenue for 2000 to $2.55 billion from $2.6 billion.
Bankruptcy apparently was looming for the company, which is under investigation by the Securities and Exchange Commission and two federal grand juries since disclosing off-the-books lending, estimated at more than $3 billion, to the Rigases and Rigas-controlled companies. Turning up the pressure this week will be the expiration Saturday of a 30-day grace period on $44.7 million worth of debt payments the company missed in mid-May.
Kevin Kuzio, a bond analyst with KDP Investment Advisors, predicted Adelphia would file for bankruptcy within a week.
"I think it's inevitable," Mr. Kuzio said. "There just continue to be so many issues on the table, the only way to get a good look at everything is to just stop it" by reorganizing the company under Chapter 11 protection.
Mr. Tow, who owns 12 percent of Adelphia's stock, and Scott Schneider, a Citizens' executive, had just joined the board May 28. Mr. Tow said they resigned because the flurry of disclosures and unreliability of information from Adelphia made it impossible to help stabilize the company's finances.
Deloitte & Touche said in a statement it had suspended its audit of Adelphia in May and said it wouldn't go on until Adelphia independently investigated questions "including whether persons employed by the company were engaged in illegal activity."
The accounting firm has been provided little information about the status or conclusions of the investigation, said the statement issued by spokeswoman Deborah Harrington. Deloitte & Touche officials didn't immediately return calls seeking further comment.
Adelphia had announced the audit suspension May 15 and said a three-member special committee of independent board members would investigate. The Coudersport, Pa., company said yesterday that the committee was still investigating questions including transactions between the company, the Rigases and Rigas-controlled partnerships, and "additional facts not now known to the company may be discovered."

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