CABL Forum - Re: Adelphia sues former auditor Deloitte & Touche

How typical! No one ever wants to accept responsibility for anything they do wrong - someone else is always to blame. This could have all been avoided had the Rigas not been so greedy and unsatisfied with what they had, and needed MORE, MORE, MORE....for God's sake, how much money and how many things does someone actually NEED instead of just COVET. I don't feel sorry for the Rigas' - although it is unfortunate they weren't found out sooner and reported, they got just what they deserve.

As for the auditing company and failure to report mismanagement, well....smaybe somehow they have benefitted also? You don't cut off your nose to spite your face. The Adelphia account was probably a major money-maker for them too.

Corporate greed - it's all around us. The whole system needs an overhall.

Thanks for keeping us posted on things...my hub was shutdown because of Adelphia and now can't even recover his retainage...not that it was much, but at this time, it sure would be helpful!

> Adelphia sues former auditor Deloitte & Touche
> Wed Nov 6, 8:46 PM ET
> By Ilaina Jonas
>
> NEW YORK (Reuters) - Bankrupt cable television operator Adelphia
> Communications Corp. Wednesday filed suit against Deloitte & Touche,
> accusing its former auditor of negligence and fraud for failing to
> stop top Adelphia executives from pillaging the company.
>
> Deloitte either knew or should have known through its audit process
> that the company's co-founder and former chief executive, John
> Rigas, and two of his sons, allegedly shifted funds from the company
> to their own pockets, the suit said.
>
> Rigas and his sons, also former Adelphia executives, have been
> indicted on criminal fraud charges.
>
> The lawsuit marks the latest legal action against an outside auditor
> for allegedly playing a role in corporate fraud. Federal bank
> regulators last week sued Ernst & Young, seeking more than $2
> billion in damages for alleged fraud and negligence related to
> audits of a failed bank.
>
> "This is an action against Deloitte for professional negligence,
> breach of contract, fraud and other wrongful conduct arising out of
> Deloitte's role in one of the most egregious instances of corporate
> self-dealing and financial chicanery in United States corporate
> history," according to the suit filed in Court of Common Pleas in
> Philadelphia.
>
> Had Deloitte conducted its job correctly the Rigas actions would
> have come to light and been stopped "and much of the huge damages
> suffered by Adelphia and Adelphia's bankruptcy would have been
> avoided," the lawsuit said.
>
> Deloitte & Touche said any fraud at Adelphia was aimed at deceiving
> it as well, but said it had not seen the lawsuit and was not able to
> comment on the accusations.
>
> Coudersport, Pennsylvania-based Adelphia filed for Chapter 11
> bankruptcy protection in late June, and would become part of the
> bankrupt troika, along with Enron and WorldCom, synonymous with
> greed and corporate wrongdoing.
>
> Enron has joined its creditors in a lawsuit against its former
> auditor Andersen LLP. To date, WorldCom has not filed to sue its
> auditor, also Andersen.
>
> In 1999, outside auditor Ernst & Young LLP agreed to pay one of the
> largest accounting negligence settlements, paying $335 million to
> Cendant Corp. shareholders, for its role in Cendant's accounting
> scandal.
> Had Deloitte informed Adelphia's Audit Committee of the Rigases'
> actions, "(the committee) could have, and would have, acted to stop
> and remedy the misconduct," said the suit filed by the company's
> lawyers, Boies, Schiller & Flexner LLP.
> Deloitte & Touche said any counter action against Adelphia was
> blocked by bankruptcy law.
>
> "While any action Deloitte might bring against the company is
> currently stayed by Adelphia's bankruptcy filing, at the appropriate
> time, Deloitte will seek remedies against the company and former
> and/or current Adelphia officers and directors who supplied Deloitte
> with erroneous and incomplete information," Deloitte said.
> Although damages will be sought at a future date, should the company
> prevail in its suit, Adelphia said Deloitte's inaction cost the
> company billions of dollars.
>
> Adelphia, the nation's sixth-largest cable company, fired Deloitte
> in June after Deloitte suspended its audit. Adelphia replaced
> Deloitte with PricewaterhouseCoopers.
>
> The cable company has criticized Deloitte & Touche for not resuming
> an audit of the company's financial statements. The accounting
> firm's refusal to complete the audit resulted in Adelphia being
> unable to complete its annual report and its eventual delisting from
> Nasdaq.
> Deloitte said it told Adelphia and its Audit Committee that a long
> series of items had to be investigated and resolved before it would
> issue a report on the financial statements.
>
> The auditor said it couldn't complete an audit until those matters
> were investigated an resolved.
>
> "Although there was a special committee of the company conducting
> the investigation, they refused to share material information with
> us about the investigation, while at the same time urging us to
> resume our audit," Deloitte said.
>
> John Rigas, his sons, former Chief Financial Officer Timothy Rigas
> and former Executive Vice President James Rigas, along with two
> other officials were each charged with securities, wire and bank
> fraud and conspiracy.
>
> Authorities have accused the Rigas family of using Adelphia as
> vehicle to borrow over more than $3 billion and leaving the company
> liable for repayment. They are accused of using those funds for the
> own businesses and to cover up their personal purchases of more than
> $1.2 billion in Adelphia securities.
>
> In addition, authorities say family members manipulated Adelphia's
> books and records and falsified statements to conceal their
> wrongdoing and maintain voting control.
> Reuters/Variety
>

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Re: Adelphia sues former auditor Deloitte & Touche