Some Adelphia Testimony Challenged

An attorney for John Rigas on Tuesday questioned the testimony of a former director concerning when he learned that Rigas family members were using debt guaranteed by Adelphia Communications Corp. to fund securities purchases.

At the fraud trial for John Rigas and two of his sons, attorney Ben Preziosi presented documents from board meetings on March 6, 2002, and earlier that pointed to the use of debt guaranteed by Adelphia to fund securities purchases by the Rigases.

Last week, former Adelphia director Dennis J. Coyle testified that he first learned the Rigases were using debt that way when it was disclosed to the public on a conference call March 27, 2002.

Former Adelphia Chairman John Rigas, his sons Timothy and Michael Rigas and former executive Michael Mulcahey are on trial on charges of conspiracy and fraud. They have pleaded not guilty.

Coyle acknowledged that at a board meeting in Cancun, Mexico, on March 6, 2002, he identified securities purchases by the Rigas family for an amount close to the sum of Adelphia-guaranteed loans the family drew for purchases during the same quarter. His testimony came during cross-examination.

In response to questioning by Preziosi, Coyle said that the “Rigas family purchase draws” amounted to $429.06 million during the fourth quarter of 2001, when the total sum of securities purchased by the Rigases was $427.3 million.

“Am I correct that you learned about the Rigases’ use of the co-borrowed funds prior to March 27?” Preziosi asked.

“Absolutely not,” Coyle responded.

In earlier testimony Tuesday, Coyle said some of Adelphia’s lending covenants required that the Rigas family maintain its voting control and that violating those covenants could have landed much of its debt in default.

The defense has been trying to show that the Rigases borrowed money from the company to maintain their voting control by buying stock, and that their voting control was in Adelphia’s interest.

Coyle, however, said he differed from the Rigas family on the importance of their voting control. “It was my understanding that the Rigas family made a big point of saying it was important to Adelphia,” Coyle said. “It was not, in my opinion.”

John Rigas was not in court Monday or Tuesday. He had appointments at the Mayo Clinic in Minnesota for his bladder cancer.