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Case
| HBS Case Collection
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2010
(Revised from original 2007 version)
Adelphia Communications Corp.'s Bankruptcy
by
Stuart C. Gilson and Belen Villalonga
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Abstract
In 2002, a massive accounting fraud and corporate looting scandal involving the founding Rigas family made Adelphia the 11th largest bankruptcy case in history, and the third-after WorldCom and Enron-among those triggered by fraud. Set in 2005, when Adelphia is contemplating several options to emerge from bankruptcy, including a $17.6 billion cash-and-stock offer from Time Warner and Comcast, a $17.1 billion cash-only offer from Cablevision, and a $15 billion cash-only offer from KKR and Providence. The fact that both Comcast and Cablevision are themselves family-controlled and with a large wedge between the family's ownership and control rights further complicates the decision.
Keywords: Family Business;
Restructuring;
Crime and Corruption;
Insolvency and Bankruptcy;
Corporate Governance;
Governance Controls;
Family Ownership;