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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (11829)	7/7/2003 7:02:00 PM
From: StockDung	Respond to of 19428

Adelphia alleges Citigroup, Bank of America aided Rigas fraud By David Voreacos, Bloomberg News Adelphia Communications Corp. and its creditors sued Citigroup Inc., J.P. Morgan Chase & Co., Bank of America Corp. and more than 400 other banks, alleging they helped founder John Rigas defraud the company of more than $5 billion. The suit, filed Sunday in U.S. bankruptcy court in New York, claims that the banks created credit facilities that allowed the Rigas family to loot the fifth-largest cable-television company before it sought Chapter 11 protection in June 2002. Rigas and two sons face a criminal fraud trial in January. Adelphia, which has $18 billion in debt and wants to reorganize by next year, seeks to disallow $3 billion in bankruptcy claims by the banks, arguing that they aided the Rigas fraud. The suit alleges the primary engine for the fraud were syndicated loans from which both Adelphia and private Rigas companies could draw money and were both liable for repayment. "Aware of obvious red flags, many of the co-borrowing lenders merely rubber-stamped the co-borrowing facilities so that their affiliated investment banks could earn hundreds of millions of dollars in fees," the 252-page complaint states. Adelphia, which had previously sued the Rigases and the company's former auditor, Deloitte & Touche LLP, was joined in its lawsuit by bondholders and shareholders who will battle banks over the size and distribution of the bankruptcy estate. The co-borrowing facilities in dispute are a $2.75 billion loan that Bank of America and J.P. Morgan helped arrange; a $2.03 billion loan that Bank of Montreal helped arrange; and an $850 million loan that Wachovia Bank helped arrange. Three other credit facilities are at issue in the lawsuit, including a $1 billion loan that Citigroup helped arrange for the Greenwood Village, Colorado-based company. Bank of America spokeswoman Eloise Hale, Bank of Montreal spokesman Ian Blair and Wachovia spokeswoman Christy Phillips said they can't comment on pending litigation. J.P. Morgan spokesman Michael Dorfsman declined to comment. Citigroup spokeswoman Leah Johnson didn't return calls seeking comment.