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Friday, July 20, 2012

Former Adelphia Attorneys To Pay $60 Million Settlement

Law firm with local ties to pay $60 million settlement linked to Adelphia fraud case

Published: Thursday, July 19, 2012, 4:18 PM     Updated: Thursday, July 19, 2012, 4:46 PM
MATT MILLER, The Patriot-News
A federal bankruptcy judge approved a settlement Wednesday that requires Buchanan Ingersoll & Rooney, a major law firm with midstate ties, to pay $60 million to resolve claims related to the Adelphia Communications Corp. scandal.

The deal sanctioned by Judge Robert E. Gerber in the U.S. Southern District Court of New York requires the Pittsburgh-based law firm to pay $20 million of the settlement immediately.

Buchanan, which has two offices in Harrisburg, once represented Adelphia, the now-bankrupt cable television giant that was the focus of a $2.3 billion accounting fraud scandal which erupted a decade ago. Several lawsuits were filed against Buchanan, accusing it of helping prepare documents that misled Adelphia investors.

In agreeing to the settlement approved by Gerber, Buchanan officials denied any liability or wrongdoing in connection with their firm’s work for Adelphia, court documents show. The law firm has more than 400 attorneys in offices in Pennsylvania, California, Delaware, New York, New Jersey, Florida, Virginia and Washington, D.C.

Adelphia founder and CEO John Rigas and his son, Timothy, the firm’s chief financial officer, are in federal prison on securities fraud convictions for concealing debt of the Potter County-based company. Federal prosecutors said the Rigases used Adelphia’s corporate funds like a personal piggy-bank, draining the company’s resources through frivolous personal spending. Father and son were convicted by a federal jury in New York in July 2004.

The Buchanan settlement is the latest secured by the Adelphia Recovery Trust, which is representing Adelphia creditors and investors in bankruptcy proceedings. The trust secured a $175 million settlement with more than 20 banks in the Adelphia case in 2010. In 2007, Deloitte & Touche, Adelphia’s accounting firm, reached a $167.5 million settlement with the trust, also without an admission of liability. 

Two points of clarification: $40 million of the $60 is coming from Buchanan's insurance companies, according to the court filings... and to date, the Adelphia Trust has distributed approximately $245 million to claimants.

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