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Chapter 11 a Relief to Some Locals

Considering that Adelphia Communications Corp. is this rural community's largest employer, one might expect that the company's bankruptcy declaration last week would've left the town reeling.

But some Adelphia employees — and the local businesses that rely on spending by those workers — said the Chapter 11 filing brought a sense of relief, since it at least buys some time. The MSO plans to continue operating its cable systems throughout the bankruptcy proceeding, which could take at least 18 months, and Adelphia said there won't be any layoffs in the near future.

One Adelphia employee who asked not to be identified said the last few months had been very stressful, especially as leadership at the MSO — whose former ruling Rigas family prided themselves on their loyalty to Coudersport — said very little to employees about the company's fate.

But she said she found some comfort in Tuesday's announcement, because Adelphia finally communicated where it was heading.

While there were no immediate job cuts at Adelphia, the company's woes have had a big impact on the community and its population of 2,650. Adelphia employs 1,200 Coudersport residents.

Coudersport Mayor Wick Furman, who works as a supervisor at the MSO, said the town scrapped plans for a major expansion of its water and sewer system because doesn't expect to receive the tax revenue from Adelphia that's needed to fund the project.


And one local real estate agent said several Adelphia employees "panicked," putting their homes on the market after the MSO disclosed billions of dollars in off-balance sheet debt and self-dealing with businesses owned by its founding Rigas family.

"During a period of uncertainty, I would expect that they [employees] have to make their own decisions," interim CEO Erland Kailbourne said Thursday, when asked if he was concerned about employees quitting before he and the MSO's board determined how the company would be restructured.

Kailbourne is one of many new faces in Coudersport. In addition to dozens of outside lawyers, accountants and crisis public-relations executives the company retained by the company, Kailbourne has hired two certified public accountants, a new chief financial officer and a chief restructuring officer. But with the exit of Adelphia founder and former CEO John Rigas and his sons Michael, Timothy and James, the company lacks a leadership team with cable experience.

"It is a challenge, of course, at the senior-management level," Kailbourne acknowledged. "The family had those responsibilities in the past."

Some local merchants said they worry that Adelphia may eventually lay off many employees, which could hurt their businesses. They include Kaye Gerhart, a 10-year veteran of Adelphia's marketing department who left the company in 1998 to open Kaye's Hometown Restaurant.

At Kaye's, located just steps from Adelphia's Main Street headquarters, a hamburger costs $2.99. Adelphia employees fill the restaurant each day during lunchtime.

"We were taking our prosperity for granted, and I think a lot of the businesses and the local people lost touch with other things. We weren't promoting tourism and working on other activities," Gerhart said. "We were just living the good life, and depending on Adelphia."


David Hauber, the owner of Hauber Jewelry Store on Main Street, said Coudersport was hurt within just the past two weeks by layoffs at other companies. Adelphia's bankrupt Adelphia Business Solutions business-telephone subsidiary laid off about 100 employees, and Encon Safety Products Inc. sold its Coudersport operation, leaving 40 locals without jobs, he noted.

Hauber said he's concerned that major layoffs at Adelphia would have a trickle down effect on other businesses, which count on spending from the operator's employees.

Despite the precarious position in which the Rigas family has left Adelphia and Coudersport, Hauber — like many others the community — spoke fondly of the clan, even though it used its MSO to help fund family-owned businesses.

"It [Adelphia] started out as a mom-and-pop business, and as it grew, it continued to operate that way. But they [the Rigas family] have always been very good to the community. Mr. Rigas was very instrumental in bringing in some of the industry in here," Hauber added

He told the story of how Rigas helped bring Pure Carbon — Coudersport's third-largest employer, behind Charles Cole Hospital — to town in 1957.


The locals said members of the Rigas family have rarely been spotted in town since Adelphia's accounting revelations and allegations of self-dealing came to light. But expensive construction projects planned by the family — which were recently halted — remain as eyesores.

Less than one mile from Adelphia's headquarters, a huge, partially constructed home, which former Adelphia vice president of strategic planning James Rigas had been building, dwarfs every home in the neighborhood.

About 10 miles east of downtown Coudersport, dozens of acres of land are torn up at was eventually supposed to be Wending Creek Golf Club. There are still bulldozers left on the land, and there's at least one water hazard on the course. Adelphia had contracted with renowned golf course designer Reese Jones to build the links facility.

Forty miles north of Coudersport, in the blue-collar town of Olean, N.Y., Eleni Interiors — the pricey furniture store owned by Doris Rigas, the wife of former Adelphia chairman John Rigas — was still open for business last week. Adelphia disclosed in a recent Securities and Exchange Commission filing that the company and its subsidiaries may have been the only customers of this store, where there were several dining room chairs on display that cost more than $1,000 apiece.

Indeed, there were no customers inside the store last Thursday. An employee told a visitor that Doris Rigas was in the back office that day, but that she was unavailable for comment.


From 1984 through 1998, John Rigas sat on the board of trustees of St. Bonaventure University in Olean, located down the road from Eleni Interiors. Former Adelphia executive vice president Michael Rigas succeeded his father, and he remains on the board today, according to St. Bonaventure vice president David Furguson.

The Rigas family is one of the largest donors to the university, which holds the Rigas Family Theater in its fine arts center. And its basketball team's games are televised by Adelphia's Empire Sports Network and played on Adelphia Court.

"I haven't had any conversations with [John Rigas], but we certainly hope he and the family continue to be involved with us," Furguson said. "We're very proud of our relationship with them."

Back in Coudersport, gallows humor abounds. As a reporter last Wednesday interviewed Jimmy Bruzzi, who owns a dry-cleaning shop, an Adelphia employee came in to pick up a shirt. When Bruzzi said he wasn't able to remove a stain, the employee asked if he was giving up.

"I'm filing Chapter 11 on your shirt," Bruzzi responded, drawing a big laugh from the Adelphia employee.