Adelphia Wins Final OK for Settlement With SEC

Adelphia Communications Corp. won the third and final required approval of a $715-million settlement of a fraud lawsuit filed by the Securities and Exchange Commission.

U.S. District Judge Kevin Castel in New York approved the accord late Thursday. The agreement resolves the SEC suit and spares Adelphia from criminal prosecution. It is the second-largest payment ever made to settle an accounting fraud suit, exceeded only by WorldCom Inc.’s $750-million settlement in 2003.

Castel’s approval allows Adelphia to move forward with its proposed $17.6-billion asset sale to Time Warner Inc. and Comcast Corp. The asset purchase agreement required Adelphia to settle the SEC suit before seeking court permission for the sale.

“The Rigas family is very pleased the settlement has moved through the courts, and we look forward to consummating it,” said Gerard Catalanello, a lawyer representing the family that founded Adelphia.

Castel is overseeing the SEC case. Earlier this month, U.S. Bankruptcy Court Judge Robert Gerber and U.S. District Judge Leonard Sand, who is overseeing the criminal case against Adelphia founder John Rigas and two of his sons, gave their required approvals of the settlement. Sand rescheduled the retrial of Michael Rigas, whose securities fraud case ended with a deadlocked jury in July 2004, for Oct. 27, prosecutors said Friday.

Adelphia will use the proceeds to create a government-run restitution fund for investors who lost money prior to the Greenwood Village, Colo.-based company’s June 2002 bankruptcy filing.

Under the terms of the pact, the Rigas family will turn over 95% of the family’s assets, including most of its cable TV systems, real estate worth about $10 million and about $567 million in Adelphia securities. Most of the assets will be sold to Time Warner and Comcast. The family will keep assets valued at $45 million, according to court papers.

Adelphia spokeswoman Erica Stull didn’t immediately return a call seeking comment.