Opinion ID: 1435420
Heading Depth: 5
Heading Rank: 4

Heading: Stock Purchases

Text: The Rigases also took Adelphia stock without paying for it and used Adelphia assets to pay for their purchases of Adelphia stock. The Rigas family claimed that they were reducing Adelphia's debt by purchasing substantial amounts of Adelphia stock, but they never actually paid for that stock. Instead, Adelphia purportedly was compensated for those securities by `assumptions' by certain [Rigas Family Entities] of debt owed by Adelphia. New York Indictment ¶ 74. These assumptions had no financial significance because Adelphia remained jointly and severally liable for all such debts. Id. According to the New York Bill of Particulars, the Rigases also took shares of common stock owned by Adelphia from Adelphia's vault and placed them in an escrow account for the benefit of the Buffalo Sabres, a hockey team owned by the Rigas family. Finally, the Rigas family purchased Adelphia stock on margin using stock loans from a number of banks. When the banks made margin calls against the loans, the Rigases had Adelphia pay the loans. According to the New York Indictment, [t]he Rigas Family did not reimburse Adelphia for the funds used to pay the margin calls. ¶ 185.