The Discovery Channel has its "Shark Week." I hereby (after the fact) declare this "Jail n' Bail" week at The Motley Fool.

Adding to the parade of hits are the fraud and conspiracy convictions yesterday of former Adelphia (Pink Sheets: ADELQ.PK) CEO John Rigas and his son, former CFO Timothy Rigas. The jury left unresolved the case against another son, Michael Rigas, former operations officer for the company, while acquitting an assistant treasurer, Michael Mulcahey, on 23 counts of fraud and conspiracy. The jury is expected to try again today to resolve its impasse on Michael Rigas.

The verdicts in a Manhattan federal court come on the same day as the indictment in Houston of former Enron Chairman Ken Lay. It also comes as Russian soon-to-be-former-oligarch Mikhail Khodorkovsky cools his heels in a Moscow jail as the company he controls, YUKOS (Pink Sheets: YUKOY), endures raids by Russian authorities and spirals toward bankruptcy. Another two weeks of this, and maybe we'll see some action on Tyco (NYSE:TYC), Cendant (NYSE:CD), and others.

A man can dream, can't he?

The Adelphia story, much like the tale of woe that brought Italian food giant Parmalat to ruin, is a cautionary story of what can happen when a family-run business turns into a publicly traded company. Sometimes it becomes extraordinarily difficult for the family to let things go. Things like the company checkbook. In spite of the reporting and corporate governance requirements, the Rigas family had for all intents about as much restriction on dipping into the company coffers as the House of Saud does with Saudi oil revenues. Company money, our money, what's the difference?

Rigas the elder founded Adelphia more than 50 years ago, growing it into one of the largest providers of cable, broadband, and other communications services. But the Rigas family had a series of complicated financial relationships with Adelphia, which served to almost perfectly intermingle the finances of the family and company. All that remained was to ensure that the Adelphia books didn't show that the Rigas family used the company as their own personal checking account.

In the trial, prosecutors regaled the jury with endless stacks of evidence, showing such things as the Rigases using $1.6 billion in company money to buy securities for their personal accounts and the 22 cars that John and Timothy drove, paid for out of the company till. John Rigas took $1 million in cash per month from the company, with nary a promise to repay it and without having to pay interest.

Simply unbelievable. What's left of Adelphia is soon to face the auction block, perhaps to be sold off in parts. Microsoft (NASDAQ:MSFT) co-founder Paul Allen, controlling shareholder of Adelphia rival Charter Communications (NASDAQ:CHTR), has said that Charter is interested in bidding, as are Comcast (NASDAQ:CMCSA) (NASDAQ:CMCSK) and Time Warner (NYSE:TWX). This in spite of the nearly $1 trillion in legal claims against Adelphia that are yet to be resolved, and in spite of the fact that, even in bankruptcy protection, the company's operating margins and cash flows are among the most anemic in the industry.

If the company cannot be auctioned, it will likely try to emerge from bankruptcy with its major creditors owning the vast majority of the reorganized company. Holders of Adelphia's common stock are nearly guaranteed to get nothing in the reorganization or the auction -- they're at the bottom of the pile.

There isn't some hard-and-fast rule here. After all, there are some dynamite family-controlled companies, Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) and Comcast among them. But if you are going to invest in a company that has a dominant, controlling shareholder who runs the company, it becomes even more important that you are dead-on sure that you can trust both the business judgment and ethics of that shareholder. It's not easy, but ask the former Adelphia shareholders what can happen if you get it wrong.

Bill Mann owns shares of Berkshire Hathaway. Shareholder-friendly management is one of the key elements of analysis that his colleague Mathew Emmert looks for in companies he recommends in Motley Fool Income Investor. Take a free trial today!