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MU BUS 101C - Adelphia Case
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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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