NEW YORK, April 12, 2002 (PRIMEZONE) -- Abbey Gardy, LLP (www.abbeygardy.com) announced today that it has been retained by an institutional shareholder to initiate a class action suit on behalf of purchasers of the common stock of Adelphia Communications Corporation ("Adelphia'' or the "Company'') (Nasdaq:ADLAC) during the period from April 2, 2001 through April 3, 2002, inclusive (the "Class Period''). That institutional investor has asked us to circulate this notice.
The case was filed in the United States District Court for the Eastern District of Pennsylvania. Plaintiff asserts claims against Defendants Adelphia and controlling shareholders and top executives, John and Timothy Rigas (the "Rigas Family"). Unbeknowst to investors, the Rigas Family borrowed perhaps as much as $2.7 billion through various entities, including a limited partnership named Highlands Holdings, Inc. ("Highlands") from credit facilities that were co-guaranteed by Adelphia. This practice allowed for these debt obligations to remain off the Company's balance sheet and, instead, appear as if they were only the obligation of Highland and the other entities. The Rigas Family used the borrowed money to purchase Adelphia stock and convertible bonds during the past four (4) years. According to published reports, the securities purchased by the Rigas Family cost approximately $1.8 billion, but their market value has since shrunk by approximately $1 billion. Investors knew the Rigas Family were buying stock through Highlands. But it was generally assumed those purchase were made with the Rigas Family's personal funds. On March 27, 2002, during a conference call with analysts, questions concerning how these purchases were financed led to disclosures that the Rigas Family had caused Adelphia itself to guarantee at least $2.3 billion in off-balance sheet debt to secure these purchases which benefited the Rigas Family, and other transactions that also benefited Rigas-controlled companies. Thus, the Company's debt obligations were far higher than was ever revealed to the public, and the public was unaware of the extent to which Adelphia resources were being diverted to the benefit of the Rigas Family. The disclosures made in the last few weeks suggest that all of the adverse news has not yet been revealed.
The Complaint charges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. During the Class Period, Adelphia's shares traded as high as $45 per share. On April 11, 2002, the stock closed at only $8.01 per share. If you purchased the common stock of Adelphia during the Class Period, you have until June 3, 2002, to ask the Court to appoint you as one of the lead plaintiffs for the Class.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiffs". Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. The law firm of Paskowitz & Associates has been asked to serve as co-counsel for the plaintiff.
If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Nancy Kaboolian, Esq. or Jennifer Haas of Abbey Gardy, LLP at (800) 889-3701 or email JHaas@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca