The Adelphia Scandal Essay - 1114 Words

The Adelphia Scandal In 1952, John Rigas purchased his own cable company. By the late 1990s, he had turned it into the sixth largest cable company in the United States with 5.6 million customers. The business was always run as a family style business which led to fraudulent acts among family members and upper level executives. The family has been accused of stealing $3.1 billion from Adelphia and is now facing criminal charges. Adelphia was forced to file chapter 11 bankruptcy and as of April 24, 2004, the new board of directors made the decision to break up the company and sell it. The Adelphia scandal is morally wrong because the Rigas family coerced and exploited employees, harmed all stakeholders as well as stockholders, and†¦show more content†¦In addition, the Rigas family harmed all the stakeholders. Stakeholders are those groups who have a specific stake in or claim on the firm. Specifically suppliers, customers, employees, stockholders, and local community, a s well as management (Freeman 56). Adelphia Coliseum, now renamed The Coliseum, had to be renamed because of Adelphias bankruptcy. Adelphia Coliseum was a stakeholder. This made everyone who utilized the stadium a stakeholder as well. The stakeholders were harmed because when Adelphia went bankrupt, the coliseum was not completely paid for. Therefore, they had to find alternative ways to pay for the coliseum. The Rigas family was the manager of Adelphia and had a fiduciary responsibility to the stakeholders. This scandal was immoral because Adelphia did not fulfill their responsibilities to their stakeholders when it was their duty. According to Milton Friedman, stockholders are the owners of the corporation, and hence corporate profits belong to the stockholders. ManagersÂ…have a moral obligation to manage the firm in the interest of the stockholders (Friedman 45). Adelphia was managed in such a way that it was not in the stockholders interest, in fact, it was only man aged in the interest of the Rigas family. It is wrong to harm the stockholders because they have entrusted the company with their money with an expected return and maybe anShow MoreRelatedAdelphia Communications Scandal1563 Words   |  7 PagesAdelphia Communications scandal Matthew Tassin Trident University Ethics 501 Introduction Adelphia Communications Company was a television cable company whose headquarters centered in Coudersport, Pennsylvania. It ranked as the fifth most prestigious cable companies in United States. John Rigas is the founder of the company. The company was highly respected until an infamous scandal ensued following claims of bankrupt in 2002, at which time its headquarters relocated to greenwood VillageRead MoreEthical Discernment: The Adelphia Scandal1655 Words   |  7 PagesEthical discernment Adelphia scandal Statistical analysis This paper relies on secondary data on a past phenomenon. It combines data from journal and other internet sources to bring out aspects of unethical behavior by Adelphias top executive. The analysis of data takes two ethical frameworks. Ethics involve an individuals moral judgments concerning what is right and/or wrong. Individuals or groups of people are responsible for making decisions in an organization (shaw, 2008). Decisions withinRead MoreEssay on Adelphia Scandal2340 Words   |  10 Pagesï » ¿ The Adelphia Scandal The Dawn of Adelphia Adelphia was founded in 1952 by John Rigas and his brother Gus Rigas in Coudersport, Pennsylvania with the purchase of their first cable franchise for $300. After 20 years, the Rigas brothers incorporated their company under the name Adelphia which derived its name from a Greek word which means brothers, an apt corporate title for a business that would employ generations of the Rigas family. Adelphia was a cable television companyRead MoreBusiness Ethics: Adelphia Scandal1476 Words   |  6 PagesCentury evolved, it appeared as if Adelphia Communications Corporation was on a direct path of success; unbeknownst to their investors and the public, they were in reality on a direct path of destruction instead. Unfortunately, Adelphia is not the first major company in the history of the United States’ business world to lose the trust of the American public, but it is certainly one of the most notable ones to do so. As the events surrounding the Adelphia scandal unfolded in full view of the publicRead MoreThe Adelphia Communications scandal Essay1882 Words   |  8 PagesIntroduction The Adelphia Communications scandal occurred in March, 2002 when three of the original founding family members which included the father John Rigas, and two of his sons Michael and Timothy, along with two other company executives were arrested for improperly taking assets from the nation’s sixth-largest cable television company. The scam involved one of the biggest financial frauds faced by a publically held company. In the end stakeholders were forced to absorb massive losses asRead MoreAdelphia Communications Scandal Revealed Essay782 Words   |  4 PagesADELPHIA COMMUNICATIONS SCANDAL REVEALED ________________________________________ The Adelphia Communications Scandal Created Controversy. The Fraudster Got Sympathy From the Judge and Received a Light Sentence for Stealing From Old Folks. ________________________________________ The Adelphia Communications scandal broke in 2002 when a footnote in a routine quarterly earnings statement revealed that the Rigas family had borrowed more than $2 billion from the company. But they didnt pay it backRead MoreThe Adelphia Communications Scandal John Rigas started Adelphia Communcations in 1952 with the800 Words   |  4 Pages The Adelphia Communications Scandal John Rigas started Adelphia Communcations in 1952 with the help of two partners, but soon bought it out. The company was taken public in 1986 and as a result would have to abide by the regulations of the SEC. By the early 2000s, Adelphia was one of the top cable companies in the United States. This was the peak of a corporation that would begin a downward spiral over the first half of 2002 as a result of fraudulent use of the company’s assets at its’ shareholdersRead MoreEssay about Business Ethics and Kant1466 Words   |  6 PagesIntroduction The purpose of this paper is to discuss how Adelphia Communications’ leadership, particularly the Rigas family, violated the trust of the public and its investors through unethical and illegal business practices. First, a synopsis of the Adelphia scandal will be presented. Next, a brief overview of ethics and how they apply to maintaining good business and public trust will be discussed. Following the ethics overview, an outline of deontology and Kant’s Categorical Imperative will beRead MoreCorporate And Accounting Ethical Scandals1492 Words   |  6 PagesIntroduction Over the past two decades there have been numerous corporate and accounting ethical scandals. In 2002, Adelphia Communications was among the most publicized ethical misconduct disasters. The breakdown of corporate integrity collectively cost Adelphia shareholders billions of dollars in fraudulent financial acts, marred customer/client trust, and saw senior management imprisoned (Markon Frank, 2002). Operating a business requires the owners to follow ethical guidelines that promoteRead MoreEssay on ETH501 Adelphia Case1512 Words   |  7 Pagesthis case study we are asked to draw upon deontological ethics, and discuss how Adelphia Communications’ executives violated the trust of the company’s shareholders and the trust of that of the larger public. To do this we first need to take a look at deontological ethics and how the philosophy of deontological ethics affects the choices that were made in the Adelphia Communications’ case. We will also look at the Adelp hia case and examine how its executives violated the trust of the company’s shareholders