Posted: Wed., Mar. 17, 2004, 3:35pm PT

Rigas perks kept percolating

Lawyers say Adelphia used as personal piggy bank

By Jill Goldsmith

Rigas

This article was updated at 7:15 p.m.

NEW YORK -- Prosecutors in the Adelphia Communications fraud case zeroed in Wednesday on more alleged outrageous perks to the Rigas family, including $17,000-plus monthly mortgage payments for a Beaver Creek, Colo., condo; $3,000 in beauty treatments; and a $1 million commitment to build the Rigas Family Theater at St. Bonaventure U. in Olean, N.Y.

The government, trying to prove the Rigases used Adelphia as a personal piggy bank, also noted credit card receipts for golden oldies CDs ("Hit Parade 1942" and "Hit Parade 1943"), 100 pairs of bedroom slippers and a $100,000 payment to St. Bonaventure to support its basketball program and get naming rights to the court. In all cases, publicly traded Adelphia footed the bill.

The bedroom-slipper expenses, which prosecutors mentioned in their opening argument, were dated March 27, 2002 -- the same day the company's finances started to crumble when it came to light that the Rigases had used Adelphia to back $2.3 billion in loans that weren't on the balance sheet.

The cabler's founder, John Rigas, his sons Timothy and Michael, and former company exec Michael Mulcahey are on trial in federal court in Manhattan on charges of conspiracy and fraud. They have all pleaded not guilty.

Earlier this week, the Rigases' lawyers defended the family's frequent use of Adelphia's two corporate jets, which were employed for golf jaunts to Pebble Beach and Hilton Head; board meetings in Cancun; and a trip for Tim Rigas and actress Peta Wilson to Montego Bay, Jamaica. The defense said that particular flight continued to San Juan, Puerto Rico, where Adelphia owns an interest in a cable system.

Restructuring protested

Separately, a group of influential bondholders, including Blackstone Group and Highfields Capital, joined with shareholders to protest new management's restructuring plan for Adelphia. They want the company to be sold instead in order to generate more proceeds for investors.

The cabler's management presented the complex reorg plan several weeks ago and has said it hopes Adelphia will emerge from Chapter 11 by year's end.

Cheering the defense, a witness said this week that he misspoke in earlier testimony because he misunderstood the terms of a loan agreement. The judge in the case called the incident an "egregious" error that opened the door for the defense to call for a mistrial.

(Dow Jones contributed to this report.)