Less than one day after having the chairmanship of Adelphia Communications
Corp. thrust upon him, Erland Kailbourne has received his first ultimatum from
disgruntled shareholder Leonard Tow.
In a letter to Kailbourne, Tow said that after a phone conversation with the
new Adelphia chairman Wednesday, he was disappointed that Kailbourne did not
consider his request to name three new members to Adelphia's board of directors
a priority.
Tow; his wife, Claire; and various family trusts own about 12 percent of
Adelphia's outstanding shares.
Since the end of March, Tow's holdings in Adelphia have lost 70 percent of
their value. He received those shares after selling his Century Communications
Corp. to Adelphia in 1999 for $5.2 billion in Adelphia stock and assumed
debt.
While Tow acknowledged in his letter that Adelphia has more pressing issues
at this time -- including releasing its 10-K annual report and making full
disclosure of borrowings by the Rigas family (Adelphia's controlling
shareholders) that were guaranteed by Adelphia -- he stressed that his proposal
is a key component of restoring credibility in the Coudersport, Pa.-based
MSO.
'Again, I must say I was extremely disappointed by our conversation and ask
that you contact me immediately to work out the details of seating Scott
Schneider, Rudy Graf and myself on the board,' Tow wrote.
'If we do not hear from you by 5 p.m. [EST] Friday, May 17, 2002, we will
assume that Adelphia and the Rigas family will not comply with their contractual
obligations and we will pursue all appropriate remedies,' he continued.
Just what those remedies are remain to be seen. Tow and Adelphia could not be
reached for comment.
