Adelphia’s Unsecured Creditors Sue SEC

Adelphia Communications Corp.’s unsecured creditors sued the Securities and Exchange Commission, asking that they be paid before any funds go to the government agency.

The SEC filed a claim against the fifth-largest U.S. cable television company on behalf of bondholders and shareholders who lost money during the accounting fraud that drove Adelphia into bankruptcy protection in 2002.

Adelphia founder John Rigas and one of his sons were convicted last week of conspiracy, bank fraud and securities fraud for looting the company and lying about corporate finances.

The creditor panel said unsecured creditors should be paid before any money goes to the SEC. Unsecured creditors typically receive payment before shareholders in U.S. bankruptcy cases.