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Rigases Seek Legal Fees From Adelphia

July 16, 2003

WASHINGTON (AP) _ A law firm representing the founding family of Adelphia Communications Corp. in criminal and civil litigation asked a court Wednesday to order the company to fund $15 million in legal costs.

Mike Stenglein, a lawyer with Dewey Ballantine LLP in Houston, filed a letter asking the U.S. Bankruptcy Court in Manhattan to order $15 million in funding to help pay the defense costs of company founder John Rigas and sons Timothy and Michael.

A letter obtained by Dow Jones Newswires said the Rigases are requesting the funding from Adelphia Communications under terms of prior court orders.

Efforts to resolve the matter directly with Adelphia have been unsuccessful, according to the letter.

The U.S. Bankruptcy Court in Manhattan is hearing both the Adelphia Communications’ bankruptcy case and the company’s lawsuit against the Rigases.

The Rigases were arrested by federal prosecutors last July 24, on charges of stealing hundreds of millions of dollars from the company.

The criminal trial of John Rigas is scheduled to begin in January 2004.

The Rigases’ criminal-litigation lawyers estimated a budget of roughly $11 million from now until the end of the criminal trial, and the cost of civil defense during that period is estimated at about $4 million.

The Rigases currently owe their attorneys at least $1.6 million, Stenglein said.

In the letter, Stenglein said the Rigases’ ``inability to adequately defend themselves against the criminal and civil charges against them has now reached a critical stage.″ The Rigases’ personal liberty ``is at risk of being taken away″ because the family has been denied access to financial resources necessary to defend themselves, the letter said.

On Wednesday, an attorney representing Adelphia Communications filed a letter in response to the Rigases’ funding request, saying the company opposes ``any notion that it should foot the bill for the Rigases’ defense.″

Philip C. Korologos, an attorney with Boies Schiller & Flexner LLP, said Adelphia Communications has worked with the Rigases’ attorneys to facilitate the sale of real estate to raise funds for the family’s defense costs.

Moreover, Korologos said, the court has never ordered that the Rigases have a right to have Adelphia pay their defense costs.

John Rigas received bankruptcy court approval in May to sell some real estate to fund legal costs of his defense in the criminal trial.

Stenglein’s letter said that only one of those properties has been sold _ raising $500,000 _ which is ``completely inadequate to fund the Rigases’ defense.″

The bankruptcy court last year froze the assets of Rigas and his sons, who once served on the company’s board, prohibiting them from selling, transferring or encumbering any real estate the company says is part-owned by its shareholders.

Adelphia Communications filed for Chapter 11 bankruptcy protection in June 2002 amid a widening federal criminal investigation into charges of fraud and self-dealing by senior managers.

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