Dissident Adelphia Communications Corp. shareholder Leonard Tow received two
company board seats Tuesday - for himself and Citizens Communications Corp. vice
chairman Scott Schneider -- after a sometimes-contentious two-week fight.
Tow, who also is chairman of Citizens, first began to assert his right to
Adelphia board seats May 13, a little more than one month after the Coudersport,
Pa.-based MSO revealed $2.3 billion in off-balance-sheet debt. That debt has now
ballooned to about $3.1 billion as of April 30.
Tow owns about 12 percent of Adelphia's outstanding stock, and he had claimed
a right to the board seats as part of his 1999 deal to sell his Century
Communications Corp. to Adelphia for $5.2 billion in stock and assumed debt.
Last week, Adelphia's ruling Rigas family stepped down from the board of
directors, leaving four seats on the nine-member board open.
A special committee of independent directors -- formed May 16 to investigate
the problems surrounding the MSO -- recommended that a fifth seat held by Peter
Venetis, son-in-law of former Adelphia chairman John Rigas, also be vacated.
However, Venetis had refused to leave the board.
'As of this time, the company has no knowledge that Peter Venetis has
resigned his seat,' Adelphia director of investor relations Karen Chrosniak said
Tuesday night.
The fact that Tow received only two seats on the board -- he had originally
clamed the right to three -- apparently means that the Rigas family did not sign
off on his appointment. As part of its deal with the special committee, the
Rigas family retained the right to appoint two nonfamily members to the board of
directors.
In a prepared statement, Adelphia chairman and interim CEO Erland Kailbourne
said the special committee was committed to addressing Adelphia's problems
head-on.
'We are committed to take every action necessary to preserve and build on the
many strengths of the company on behalf of the company's banks, bondholders,
shareholders and other constituencies,' Kailbourne said. 'We look forward to
working constructively with Dr. Tow and Mr. Schneider to accomplish these
objectives.'
Last Friday, Adelphia revealed in a Securities and Exchange Commission filing
a vast network of insider transactions between the company and a number of
Rigas-family partnerships.
Tow -- who has been an outspoken critic of the Rigases' stewardship of the
company -- said in a prepared statement that restoring Adelphia's credibility in
the investment community is his top priority.
'Scott Schneider and I are prepared to deal with the serious challenges
facing Adelphia,' he said. 'We are committed to restoring Adelphia's credibility
and stabilizing the company financially in order to protect the interests of all
Adelphia's public and private lenders and shareholders. We look forward to
working constructively with the special committee to accomplish these
objectives.'
