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Bankrupt cable operator

Adelphia Communications

is reportedly denying severance pay for former chief executive, John Rigas, who was arrested over the summer and accused of defrauding investors.

"Adelphia has not made any payments, nor does it intend to make payments," a source familiar with the matter told


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. "The company believes it is within its rights to withhold these payments." (Adelphia Communications did not immediately return a call seeking comment on the story.)

In July, Adelphia sued Rigas and six other former executives and directors of the company, alleging racketeering violations, breach of fiduciary duties, waste of corporate assets and other transgressions.

Rigas, his son Timothy, former chief financial officer, and his son Michael, former executive vice president of operations, were arrested in July and charged with "systematically looting" the company.

The feds have charged the Rigases with taking $252 million in company cash to meet margin calls, more than $420 million in company stock, and $13 million to build a golf course on land owned by family.


officials have accused the executives of overstating operating earnings and understating liabilities.