SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Amendment No. 1
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported) June 9, 2002
ARAHOVA COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16899 23-1844576
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
One North Main Street - Coudersport, PA 16915-1141
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (814) 274-9830
This Form 8-K/A amends and restates in its entirety the Registrant's Form
8-K filed with the Commission on June 25, 2002.
Item 4. Changes in Registrant's Certifying Accountant.
Arahova Communications, Inc. (the "Registrant") is a wholly-owned
subsidiary of Adelphia Communications Corporation ("Adelphia"). As used herein,
the "Company" refers to Adelphia and its subsidiaries, including the Registrant.
On June 9, 2002, Adelphia dismissed Deloitte & Touche LLP ("Deloitte"), its
former independent accountants. On June 10, 2002, Deloitte confirmed in writing
to Adelphia that the client-auditor relationship between Deloitte and Adelphia,
the Registrant and certain other subsidiaries of Adelphia had ceased. On June
13, 2002, Adelphia retained PricewaterhouseCoopers LLP ("PwC") as its
independent accountants. Under this engagement PwC will serve as independent
accountants of the Registrant and certain other subsidiaries of Adelphia. The
Board of Directors of Adelphia and the Audit Committee of the Board of Directors
approved the decision to change independent accountants. On June 14, 2002,
Deloitte notified Adelphia that it was withdrawing its reports on the financial
statements of Adelphia, the Registrant and certain other subsidiaries and
affiliates of Adelphia.
The Registrant 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
Registrant filed its Quarterly Report on Form 10-Q for the quarter ended March
31, 2002. As of the date on which Deloitte was dismissed as the Registrant's
independent public accountants, Deloitte had not completed its audit nor had it
issued its report with respect to the Registrant's financial statements for the
year ended December 31, 2001.
The report of Deloitte on the financial statements of the Registrant for
the year ended December 31, 2000 contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principles. During the years ended December 31, 2000 and December 31,
2001, and through the date of this Form 8-K, there were 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; as
stated below, on May 14, 2002, Deloitte suspended its audit of the financial
statements of Adelphia and the Registrant for the year ended December 31, 2001.
Other than to the extent discussed below, there were no reportable events (each,
a "Reportable Event") within the meaning of Item 304(a)(1)(v) of Regulation S-K
for the years ended December 31, 2001 and December 31, 2000 and through the date
of this report. Adelphia's Audit Committee discussed the Reportable Event
referred to below with Deloitte and Adelphia authorized Deloitte to respond
fully to inquiries of PwC concerning that Reportable Event.
In March 2002, Adelphia's Board of Directors appointed a Special Committee
of Independent Directors (the "Special Committee") whose Charter includes
authority to review business relationships between the Company and affiliates of
the Rigas family. As part of that review the Special Committee identified
accounting and disclosure issues, some of which raised questions about whether
Adelphia's management had engaged in improper activities. On May 14, 2002,
Deloitte advised Adelphia that it had suspended its audit of the financial
statements of Adelphia and the Registrant for the year ended December 31, 2001
and provided Adelphia with a list of issues that, according to Deloitte, needed
to be resolved before the issuance of Adelphia's and the Registrant's Annual
Reports on Form 10-K. Included in this list were circumstances that raised
questions about whether employees of Adelphia had falsified accounting records
and/or engaged in other conduct in violation of law. On May 15, 2002, Adelphia's
Board of Directors authorized a formal investigation by counsel to the Special
Committee into the nature and propriety of transactions between the Company and
affiliates of the Rigas family, the integrity of the Company's books and
records, the accuracy and completeness of the Company's financial accounting,
the Company's compliance with its obligations under credit agreements and other
debt instruments, and any other matters related to the Company that the Special
Committee decides should be investigated. On June 9, 2002, following the
transmission of (and without acknowledging receipt of) Adelphia's letter
dismissing Deloitte, Adelphia received a letter from Deloitte in which Deloitte
stated that it was still not prepared to resume its audit. In that letter
Deloitte noted that Adelphia continued to employ executives who might have been
involved in inappropriate conduct related to the Company's financial reporting
and stated: "To the extent that any of those persons have been involved in
illegal activities, there is no way that we would be willing to rely on their
representations, and indeed the mere fact
that they remain in their positions raises additional concerns." In a letter
dated June 13, 2002 to Deloitte, Adelphia responded by noting that since May 25
the Company's accounting and finance staff have been headed by Christopher
Dunstan, Chief Financial Officer and Treasurer, and Steven B. Teuscher, Chief
Accounting Officer. In addition, Adelphia has retained the Conway Delgenio firm
for restructuring advice. Neither Messrs. Dunstan or Teuscher, nor the Conway
Delgenio firm, had any connection with the Company during the time that the
potentially improper activities may have occurred. The members of Adelphia's
accounting, finance and bank and investor relations staff referred to in
Deloitte's letter, who may have known about or been directly implicated in
inappropriate conduct, and who are cooperating with the investigation being
conducted by counsel to the Special Committee, are being transferred to other
duties pending completion of the investigation. In the letter, Adelphia noted
that: "The management representations required in connection with the audit of
the Company's financial statements will be provided by officers who had no
involvement in prior management's improper activities and who will be adequately
informed about the issues relating to the company's financial statements by the
findings of the Special Committee counsel."
The Registrant has provided Deloitte with a copy of the disclosures made in
this Form 8-K and has requested that Deloitte furnish the Registrant with a
letter addressed to the Commission stating whether or not Deloitte agrees with
the above statements, and if not, stating the respects in which it does not
agree. A copy of such letter will be filed with the Commission by the Registrant
by amendment to this Form 8-K.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
Not applicable.
(b) Pro forma Financial Statements
Not applicable.
(c) Exhibits
16.1 Letter regarding change in certifying accountant (to be
filed by amendment).
99.1 Press release dated June 14, 2002, relating to the selection
of PwC as Adelphia's independent public accountants (filed
herewith).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: July 2, 2002
ARAHOVA COMMUNICATIONS, INC.
By: /s/ ERLAND E. KAILBOURNE
------------------------
Erland E. Kailbourne
Acting Chief Executive Officer and
Chairman
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EXHIBIT INDEX
Exhibit No. Description
16.1 Letter regarding change in certifying accountant (to be filed
by amendment).
99.1 Press release dated June 14, 2002, relating to the selection
of PwC as Adelphia's independent public accountants (filed
herewith).
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