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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
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Date of Report (Date of Earliest Event Reported): June 14, 2002
ADELPHIA BUSINESS SOLUTIONS, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
000-21605 25-1669404
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(Commission File Number) (I.R.S. Employer Identification No.)
ONE NORTH MAIN STREET
COUDERSPORT, PA 16915-1141
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(Address of Principal Executive offices) (Zip Code)
(814) 274-9830
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(Registrant's Telephone Number, Including Area Code
NOT APPLICABLE
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(Former Name or Former Address, if changed Since Last Report)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On June 14, 2002, Adelphia Business Solutions, Inc. (the "Company") received an
unsolicited letter from Deloitte & Touche LLP ("Deloitte"), its former
independent accountants, notifying the Company that the client-auditor
relationship between the Company and Deloitte had "ceased." A copy of this
letter is attached hereto as Exhibit 99.1 and incorporated herein by reference
and it was the Company's understanding that Deloitte resigned as its independent
public accountant effective as of June 14, 2002.
In response to the Company's query as to the circumstances surrounding this
letter, Deloitte declined to provide further clarification other than to note
that on June 9, 2002, Adelphia Communications Corporation ("Adelphia") dismissed
Deloitte as its independent public accountant. Prior to January 11, 2002, the
Company was a majority-owned subsidiary of Adelphia.
On July 3, 2002, the Company transmitted to Deloitte by e-mail a draft of the
disclosures made in Item 4 of Amendment No. 1 of this Current Report on Form 8-K
("Amendment No. 1"). The Company received a letter from Deloitte on July 15,
2002 (the "July 15 Deloitte Response") responding to the disclosures made in
Item 4 of Amendment No. 1. A copy of the July 15 Deloitte Response was filed as
Exhibit 99.1.
According to the July 15 Deloitte Response, on May 14, 2002, Deloitte suspended
its audit of the financial statements of Adelphia and, upon suspending its audit
of the financial statements of Adelphia, Deloitte also ceased its audit of the
financial statements of the Company. As of the June 14, 2002, the date on which
the Company received the aforementioned resignation letter from Deloitte,
Deloitte had not completed its audit nor had it issued its report with respect
to the Company's financial statements for the year ended December 31, 2001.
Accordingly, the Company has not yet completed its financial statements or filed
its Annual Report on Form 10-K for the year ended December 31, 2001, nor has the
Company filed its Quarterly Reports on Form 10-Q for the quarters ended March
31, 2002 and June 30, 2002. Neither the Board of Directors of the Company nor
the Audit Committee of the Board of Directors of the Company took any action
with respect to Deloitte's decision to resign as the Company's independent
public accountant.
The Company has not yet determined who it intends to appoint as its independent
public accountant on a going forward basis. Upon making such appointment, the
Company will file a subsequent Current Report on Form 8-K in accordance with the
requirements of that form. In addition, when the appointment is made, the
Company will authorize Deloitte to respond fully to the inquiries of the
successor independent public accountant and will place no limitations on any
such inquiries.
The report of Deloitte on the financial statements of the Company for the years
ended December 31, 1999 and December 31, 2000 contained no adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
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scope or accounting principles. During the years ended December 31, 1999 and
December 31, 2000, and the period commencing on January 1, 2002 and ending on
June 15, 2002, the Company had no disagreements with Deloitte on any matter of
accounting principles or practices, financial statement disclosure or audit
scope or procedure that, if not resolved to the satisfaction of Deloitte, would
have caused it to make reference to the subject matter of such disagreement in
its reports on the financial statements.
The Company believes that the following reportable events within the meaning of
Rule 304(a)(1)(v) have occurred:
Prior to its resignation as the Company's independent public accountant,
Deloitte informed the Vice President, Finance of the Company and the Chairman of
the Audit Committee of the Company that Deloitte needed to resolve certain
matters with respect to its audit of Adelphia's consolidated financial
statements for the year ended December 31, 2001 before it could determine what
impact, if any, such audit of Adelphia might have on Deloitte's audit of the
Company's consolidated financial statements for the same period. Upon its
resignation as the Company's independent public accountant, Deloitte informed
the Vice President, Finance of the Company that, because of its dismissal as
Adelphia's independent public accountant, it would be unable to make this
determination and, therefore, would be unable to complete its audit of the
Company's consolidated financial statements for the year ended December 31,
2001.
In the July 15 Deloitte Response, Deloitte states, in part:
During 2002 and continuing through the date of our resignation,
certain matters came to our attention in connection with our audits
of Adelphia and its subsidiaries and co-borrowing groups that led us
to believe that the scope of our audits of Adelphia and its
subsidiaries, including the Company, and co-borrowing groups may need
to be significantly expanded. In addition, we determined that these
matters, if further investigated, may (i) materially impact the
fairness or reliability of our previously issued audit reports or the
underlying financial statements; or the financial statements to be
issued for the year ended December 31, 2001, or (ii) cause us to be
unwilling to rely on management's representations or be associated
with the financial statements of Adelphia or those of its
subsidiaries, including the Company, or co-borrowing groups. In a
letter addressed to the Securities and Exchange Commission ("SEC")
dated June 27, 2002 (the "Deloitte Letter"), responding to Adelphia's
Current Report on 8-K filed with the SEC on June 14, 2002 (the
"Adelphia 8-K"), we set forth our views in response to the Adelphia
8-K. The Deloitte Letter discussed specific reportable events
pertaining to Adelphia that either required an expansion of the scope
of our audit of Adelphia and its subsidiaries and co-borrowing
groups, or raised questions about our willingness to rely on the
representations of management. The reportable events were followed by
a description of certain other events that occurred during the period
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May 1, 2002 through the date of our dismissal. Our views, as set
forth in the Deloitte Letter are included as an appendix to this
letter. As stated above, the Company was a majority owned subsidiary
of Adelphia up to January 11, 2002, and although the matters
discussed in the appendix to this letter did not appear to have a
direct effect on the consolidated financial statements of the
Company, the matters raised questions about our willingness to rely
on the representations of management of Adelphia, including certain
of its officers and directors, who were also officers and directors
of the Company through June 4, 2002.
The matters described in the Deloitte Letter were discussed with
officers and directors of Adelphia at various times, including those
officers and directors who were also officers and directors of the
Company through June 4, 2002. Those matters specific to the Company
were also discussed with the Chairman of the Audit Committee of the
Company and the Vice President, Finance of the Company as summarized
below. . . .
Deloitte has not identified, by name, the officers and directors of Adelphia
"who were also officers and directors of the Company through June 4, 2002", but
the Company presumes it is referring to members of the Rigas family. Neither
Deloitte (except as disclosed in the July 15 Deloitte Response) nor any member
of the Rigas family has provided the Company with information about such
discussions. John, James, Michael and Timothy Rigas resigned as directors of the
Company and ceased to hold any offices with the Company on July 22, 2002; Peter
Venetis resigned as a director of the Company on July 26, 2002.
The Audit Committee of the Company has requested that the Company's outside
counsel conduct an independent investigation with respect to related party
transactions and agreements between the Company, Adelphia or the Rigas family
and to determine whether the Company or any of its officers or directors have
engaged in conduct in violation of applicable law. The investigation is in
process.
On September 23, 2002, the Company transmitted to Deloitte by e-mail a draft of
the disclosures made in Item 4 of this Amendment No. 3 and requested that
Deloitte furnish ABIZ with a letter, in accordance with Item 304(a)(3) of
Regulation S-K, addressed to the Commission stating whether it agrees with the
proposed statements to be made by ABIZ in this amended Item 4 of Amendment No. 3
and, if not, stating the respects in which Deloitte does not agree. Upon receipt
of any letter from Deloitte responding to this request, the Company will
promptly file such letter with the Commission by amendment to this Amendment
No. 3
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ITEM 7(C). EXHIBITS.
16.1 Letter, dated July 15, 2002, from Deloitte & Touche LLP
regarding change in certifying accountant (previously filed).
99.1 Letter, dated June 14, 2002, from Deloitte & Touche LLP
(previously filed).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
ADELPHIA BUSINESS SOLUTIONS, INC.
By: /s/ Edward E. Babcock
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Name: Edward E. Babcock
Title: Vice President, Chief Financial Officer
Date: September 25, 2002
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EXHIBIT INDEX
Exhibit No. Exhibit
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16.1 Letter, dated July 15, 2002, from Deloitte & Touche LLP
regarding change in certifying accountant (previously filed).
99.1 Letter, dated June 14, 2002, from Deloitte & Touche LLP
(previously filed).
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