Adelphia Overstated Cash Flow, Revenue Over Past Two Years
Adelphia Communications Corp.'s woes continued to mount as the cable concern disclosed it overstated revenue and cash flow by about $500 million over the past two years. Two of the company's newest board members resigned over the "ongoing serial disclosures of wrongdoing" at Adelphia.</br></br>The news comes as Adelphia moves closer to filing for Chapter 11 bankruptcy protection, something many analysts expect to happen by the end of next week, given Adelphia's cash constraints and a looming $50 million interest payment it must make by Saturday.</br></br>Adelphia has begun discussions with banks about potential bankruptcy financing of as much as $1 billion or more, which would allow the company to continue operating under bankruptcy protection, according to people familiar with the matter.</br></br>In a regulatory filing with the Securities and Exchange Commission, Adelphia provided some results from its own internal review launched several weeks ago after it was disclosed that the founding Rigas family had benefited from more than $3 billion in loans from the company.</br></br>In its filing, Adelphia blamed former management, which included the Rigas family. The company said that current management believes information provided by prior management, including the amount of the company's cable system that has been rebuilt, "was unreliable" and said Adelphia plans to "correct the information, where material, as current management develops information it considers reliable."