BUS 101 1st Edition Lecture 8 Outline of Previous Lecture- Section 7: Discrete Stakeholders Investorso Almost always affected by decisions and problems, because they are the bottomlineo Types of investorso Generic business formo Reciprocalo Primary relationshipsOutline of Current Lecture - Section 8: Adelphia Case Adelphia Corporation Caseo Backgroundo SEC & Bank irregularitieso Trying to Change ImageCurrent Lecture- Section 8: Adelphia Case Adelphia Corporation Caseo Background Adelphia Corp. was a cable TV company that was at one time the 6th largest cable provider in the nation. They also expanded to offer internet, security, and phone services. Founder John Rigas, his two sons, son-in-law, and another executive were charged in 2000 with securities, wire, bank fraud, and conspiracy- The corporation offered A stocks and B stockso A – public investors, have 1 voteo B – Rigas family investors, have 10 voteso Rigas own 11% of company, but have 56% sayo SEC & Bank Irregularities Uncovered over $3 billion in unreported loans that were taken by the Rigas family Effects were immediate, lawsuits from shareholders, feeling cheated by companyThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Tow owned 12% of company, had largest stake in company- SEC file lawsuit: Excluding liabilities, faking earnings, and taking moneyo Try to change image Replace all Rigas in board of directors, move the headquarters, file for bankruptcy, and hire new managers- Hope to bounce back from this scandal Transparency – operating business in a way that allows all stakeholders to have the same view of what is going on; decreases illegal activity for businesses and increases assurance for stakeholders Objectivity – attempting to remove biases or subjective views by utilizing solid data for evaluation within a
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