Adelphia Communications Corp. issued its response to claims by its former
auditors that it withheld information from them.
In a filing with the Securities and Exchange Commission Monday, Adelphia said
its former auditors' -- Deloitte & Touche LLP -- refusal to continue its
audit of Adelphia's financial statements was unreasonable.
Deloitte halted its audit of Adelphia's books May 14 and Adelphia fired the
auditor June 9.
'In light of that unreasonable refusal, the company determined that it was
not appropriate to share with Deloitte any additional information, including the
information Deloitte claims was withheld,' Adelphia said in the filing. Adelphia
is now being audited by PricewaterhouseCoopers LLP.
In an SEC filing July 1, Deloitte claimed in a letter that it would not
resume the audit because several employees who could possibly have been involved
in illegal activities were still employed by the company.
In its response Monday, Adelphia said those employees were reassigned to
other areas of the company and are cooperating with federal authorities.
Adelphia filed for bankruptcy protection June 25 after revealing $3.1 billion
in off-balance-sheet loans made to partnerships controlled by its founding Rigas
family. The company is also under investigation by U.S. prosecutors in New York
and Pennsylvania.
But Adelphia failed to address some of Deloitte's other claims, including
that Adelphia's board had approved the purchase of $102 million worth of set-top
boxes by a Rigas-controlled entity that had no cable
operations.
