The Justice Department has asked a judge to enter a $2.53 billion judgment against two Rigas family members in a bid to seize some cable systems run by Adelphia Communications Corp., the Wall Street Journal reported on Tuesday.
The U.S. attorney's office in New York City made the request last week against company founder John Rigas and his son, former chief financial officer Timothy Rigas, saying $2.53 billion is the amount obtained by them because of illegal acts they committed, according to the newspaper.
Adelphia filed for bankruptcy after the disclosure of $2.3 billion of off-balance-sheet loans guaranteed by the company to its founding family, allegations of overstated earnings and questions about its accounting methods.
John and Timothy Rigas have been found guilty of fraud and conspiracy.
If the government receives the judgment, government lawyers will attempt to seize stock in the cable TV systems that are the Rigas family's most valuable asset and are managed by Adelphia, the Journal said.
It added that the move could present an obstacle in the No. 5 U.S. cable operator's efforts to emerge from bankruptcy or sell the company and assets including the cable systems.
The systems in question serve 225,000 subscribers and could be sold for an estimated $700 million to $900 million, according to the Journal.
Even though the Rigas family owns the systems, Adelphia wants to have title to them. The company has put the systems up for sale, warning bidders that the systems might have to be taken off the market if the company doesn't get title to them, the Journal said.