HomeMy WebLinkAbout86-025
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COUN'l'Y OF
CITY OF
STATE OF MINNESOTA
RAMSEY
ARDEN HILLS
RESOLUTION NO. 86-25 APPROVING
THE TRANSFER OF OWNERSHIP
OF GROUP W CABLE. INC.
WHEREAS, Group W Cable, Inc. , a New York Corporation
(hereinafter "Group W Cable"), by and through Group
W Cable of the North Suburbs, Inc., a wholly-owned
subsidiary, owns, operates and maintains a cable
television system in the City pursuant to the terms
and conditions of City Ordinance No. 226
(hereinafter "Cable Communications Franchise
Ordinance"); and
WHEREAS, Group W Cable's parent corporation, Wesingthouse
Broadcasting and Cable, Inc., an Indiana Corporation
(hereinafter "Westinghouse"), desires to sell and
otherwise transfer all of the issued and outstanding
shares of the capital stock of Group W Cable to Century
Southwest Cable Television, Inc., a Delaware
Corporation; TCI Holdings, Inc., a Colorado Corporation;
American Television and Communications corporation,
a Delaware Corporation, and affiliates of, or
subsidiaries or partnerships owned or controlled by,
Houston Industries Incorporated, a Texas Corporation;
Comcast Corporation, a Pennsylvania Corporation; and
Daniels & Associates, Inc., a Delaware Corporation;
(hereinafter "Buyers"), and thereby transfer control
of Group W Cable to the Buyers; and
.
WHEREAS, Group W Cable has requested the consent from the
Ci ty to a change in ownership and control of Group
W Cable to the Buyers and the transfer of ownership
and control and ultiamte transfer of the Cable
Communications Franchise Ordinance as ,amended to North
Central Cable Communications, L.P.: and
WHEREAS, the North Suburban Cable Commission (hereinafter
.Commission") has been delegated the authority and
responsibility to coordinate, administer and enforce
the Cable Communications Franchise Ordinance on behalf
of City pursuant to the terms of a Joint and Cooperative
Agreement for the Administration of a Cable Television
Franchise 1 and
WHEREAS, the Commission has held a public hearing on behalf
of City and has reviewed the legal, technical, and
financial qualifications of Buyers and found them
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adequate to own and operate Group W Cable1 and
WHEREAS, the commission has recommended to City approval
of the transfer of control of Group W Cable to Buyers
subject to the actual closing of the stock sale in
June, 19861 and
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WHEREAS, the Commission and City have been advised by Group
W Cable and the Buyers that the approval of such stock
transfer to Buyers shall in no way be interpreted
as an approval, either express or implied, of the
transfer of ownership and control and ultimate transfer
of the Cable Communications Franchise Ordinance to
North Central Cable Communications, L.P.
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NOW THEREFORE, BE
City of Arden
IT RESOLVED by the City Council of the
Hills :
.
1. That the City hereby approves the sale by Westinghouse
of all of the issued and outstanding shares of the
capital stock of Group W Cable, Inc. and the transfer
of control of Group W Cable, Inc. to the Buyers subject
to an actual closing of the stock sale transaction
in June, 1986, pursuant to the terms and conditions
currently understood by the City as evidenced by the
Notice of Transfer, and other information and documents,
provided to said Commission and City.
2. That the approval of the transfer of ownership and
control of Group W Cable, Inc. to the Buyers is hereby
deemed' not to include any approval, either express
or implied, as to any subsequent transfer of ownership
or control ,of Group W Cable, Inc. or Group W Cable
of the North Suburbs, Inc. or transfer of the Cable
Communications Franchise Ordinance or related cable
communications
Communications,
individual.
system to North Central Cable
L.P., or to any other entity or
3.
That this approval is specifically conditioned upon
payment in full prior to an actual closing of the stock
sale transaction in June, 1986, of all expenses incurred
by Commission and City related to the Request for
Approval of Transfer dated February 4, 1986, including
those related expenses incurred prior to receipt thereof,
but incurred in preparation for the receipt of the
Request for Approval.
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That this approval is specifically conditioned upon
the understanding that any changes or modifications
in the Cable Communications Franchise Ordinance or
cable communications system (in place or proposed)
which are subject to regulation or control by City
and/or Commission shall not be made without the prior
review and approval of City and/or Commission pursuant
to such procedures as are contained in the Cable
Communications Franchise Ordinance or otherwise
applicable law.
The
listed
resolution
was moved
, and duly
by Council
seconded by
Member
Coul'lcil
above
Hicks
Member
J;.fc...... C! 0"""
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The following Council Members voted in the affirmative:
Mayor Robert Woodburn, Councilmembers Dale Hicks, Nancy Hansen,
Thomas Sather and Gary Peck
The following Council Members voted in the negative: None
Passed and adopted this __~thday of
1986.
Mav
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ATTEST:
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CitYvAdmin1strator
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The undersigned, the Clerk Administrator of the
Village of Arden Hills, Minnesota, does hereby certify that
attached hereto is a true and correct copy of Resolution
No. 86-25, which Resolution was duly adopted by the City
Council on May 12, 1986, and is in full force and effect
on the date hereof.
~~!ffJ&U
Charlotte McNiesh
Clerk Administrator
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I PPENHEIMER WOLFF
\ ER SHEPARD
,ND '
NNELL Y
1700 FIRST BANI< BI..DG
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TEL.Ex: 701879
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m.vC 701605
1317 F sn&rN.W,,&u1'E 700
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NEWlOAK..N.'I'.lOJ17
~,(212)912--
lil.EX:6tc1D13948
Saint Paul
May 1, 1986
North Suburban Cable Commission
2077 W. Larpenteur Avenue
Falcon Heiqhts, MN 55113
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Re: Sale of Stock of Group .' Cable, %lie.
Dear Members of the Commission:
We have previously advised you by letter dated r.pril
28, 1986, regarding your considerations in approving, or
denying approval of, the proposed sale and transfer of all
of the capital stock of Group W Cable, 'Inc. by Westinghouse
Broadcasting and Cable, Inc. (-Westinghouse.) to a group
of five purchasing shareholders (-Buyers.). We also feel
it appropriate, in light of recent developments, to further
advise you as follows:
1. Your consideration and evaluation of the proposed
transaction has been based upon representations
by the interested parties that any determinations
and any approvals with respect to that transaction
do not act as or imply any determinations concerning
or approval of any other subsequent transactions
involving sales or transfers of the control or assets
of Group W Cable, Inc., or of your cable communication
franchises or system.
2. Certain parties to such subsequent transactions-"--"-
have expressed positions that indicate they may
not be bound by or agree to such separate and
independent consideration of the stock transfer
transaction apart from subsequent transactions.
3. To properly protect the Commission and its
Member-Cities from potential _claims or ___legal
proceedings asserting that approval of the proposed
stock transfer transaction does constitute ,approval
of, or creates interests of other parties' to,
subsequent transactions, we believe that your
recommendation and approval of the transfer
transaction should be conditioned upon receipt of
indemnity from Group W Cable, Inc. and Westinghouse
in the form set forth in the Agreemen~ attached
hereto.
,
Very truly yours,
OPPENHEIMER WOLFF FOSTER SHEPARD AND DONNELLY
By(1:;i // -
Craig ~
CC:cad
Enclosure
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IIOR'l'B SOBURBAliI CABLE COMMISSION
RBSOLU'1'ION 110. 86-5.1-1 ADOP'l'IRG PIIIDIRGS
OF PACT, CONCLUSIONS, AND RBCOMMENDED
RESOLUTION REGARDIRG TIlE 'ntANSPBR OF
OMNBRSBIP AND CON'l'ROL OF GROUP 11 CABLE, INC.
IT IS HEREBY RESOLVED that the North Suburban Cable Commission
hereby approve and adopt the following Findings of Fact,
Conclusions and Recommendations:
IR'l'RODOC'lION
The North Suburban Cable Commission (hereinafter
"Commission") is organized pursuant to the terms of a Joint
and Cooperative Agreement for the Administration of a Cable
Television Franchise (hereinafter "Agreement"), as authorized
by Minnesota Statutes Section 471.59, as amended. The Member
Cities of the Commission include Arden Hills, Falcon Heights,
Lauderdale, Little ---Canada, Moundsview,New ---Bri9hton," --North
Oaks, Rosevil1e, St. Anthony and Shoreview, Minnesota
(hereinafter "Member Cities").
This proceeding involves the Commission's review, on
behalf of the Member Cities, of.. a ..request by GroupW<Cab1e,
Inc. ("Group W") and Group 11 ,Cable of the North.Central
Suburbs, Inc. to approve the transfer of Group W to a group
of five purchasers, Century Southwest Cable Television, Inc.,
Comcast Cable Communications, Inc., Tele-Communications,
Inc., American Television and Communications, Inc. and Daniels
& Associates, Inc. (the "Buyers.) pursuant to a Purchase
Agreement dated as of December 23, 1985.
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and
that
is hereby qiven that the Member Cities will IIIllke
determination of this matter. Further, notice
qiven that each Member City, may at its own
accept or re ject the Conani ssion' s recommendation
said recommendation has no leqal effect unless
adopted by the Member Cities as their final decision.
.
Notice
the final
is hereby
discretion,
expressly
STATBMER'l' OF ISSUE
The purpose of this proceeding is to determine whether
the Member Cities of the Conanission should approve or deny
the transfer of ownership and control of Group W to the Buyers.
Based upon all the proceedings herein, the Commission
makes the following:
FIRDIRGS OF FAC'!'
1. On or about February 10, ~986, the Commission and_its
Member Cities received an official notice from Group
W by and on behalf of its wholly-owned subsidiary Group
W Cable of the North Central Suburbs, Inc., requesting
approval of a change in control and transfer of ownership
in Group W to a group of five Buyers (the .stock transfer
transaction.).
2.
On February 25, 1986, the Conanission sent to Group W
a Municipal Request for Information Regarding Request
For Approval and Transfer for the purpose of inquiring
into the legal, technical, financial, and other
qualifications of the Buyers and their agents with respect
to control and operation of the Cities' cable franchises
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(the .Franchises.) and
authorized and required by
system (the .System.), as
state law and the Franchises. ,
3.
~he Commission gave notice and held a public bearing
on April 3, 1986 for the purpose of providing the public
with an opportunity to comment on the transaction.
.
4. On April 3. 1986. the Commission reviewed and discussed
the information it had received from Group W, determining
that additional information was required to properly
evaluate the stock transfer transaction. The Commission
determined it necessary to continue the public hearing
to May 1, 1986, with respect to the stock transfer
transaction because of a need for additional information
about the parties and the consequences to the System
upon completion of that transaction. The public hearing
was conducted and closed on May 1, 1986.
5. Such additional information has been received and
presented to the Commission by staff and counsel.
6. The Commission has reviewed necessary documentation
regarding each of the Buyers sufficient to conclude
that they are duly organized and authorized to own and
operate a cable system.
7.
The Commission has reviewed the technical ability of
North Central Cable Communications Company, L.P. ("North
Central") which will be engaged by Group W as System
manager upon completion of the stock transfer transaction,
for the purpose of establishing its technical expertise
and experience in operating and maintaining a cable
system. Since North Central is a new organization created
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for the purpose of
Commission inquired
managing principals.
accomplishing the transaction,
into the technical abUi ty of
the
its
8.
The information provided indicates that Mr. Gustave
Hauser, Mr. John D. Evans, and Bauser Communications,
Inc. have extensive cable management capability and
experience. Mr. Hauser has been involved in cable
television and other electronic communications since
the early 1960;s. Mr. Evans has 13 years of management
experience ,in the cable television industry, including
Arlington, Virginia, ColUmbus, Ohio, and Brooklyn Center,
Minnesota. Hauser Communications, as a manager of cable
systems, has experience in Arlington and Brooklyn Center.
9. Upon completion of the transaction, System management
will be provided by North Central pursuant to a management
agreement with Group W. Group W, however, will remain
ultimately responsible to the Commission and Cities
-for proper management of the-System. If North -Central
failed to properly discharge such management
responsibilities, Group W would be liable for any harm
or loss incurred by System users or the Commission or
Cities, and would be able to replace North Central with
another manager to satisfy such management obligations.
10. The information provided to the Commission indicates
that North Central, through its principals, has cable
management capability and experience that may be
sufficient to satisfy the technical ability factor as
applied to the System. Group W remains legally
~ responsible for proper System management and will be
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able to monitor and replace North Central if such
management is not adequate. Based upon the ,review of
the information provided, the technical ability of the
Group Wand NorthCentral, -mtogether their with System
management arrangements and responsibilities, is
satisfactory.
The Commission has reviewed the financial capability
of Group W following the transaction for the purpose
of determining whether it has the financial resources
available or committed to meet Franchise commitments
to operate the System. The Commission engaged an
independent financial communications consultant to assist
in this analysis.
The assets of Group W remain intact at the conclusion
of the stock transfer transaction, causing no change
from the financial situation which exists for Group
W prior to the closing of,thetransaction.The assets,
resources and economy of scale advantages of the entire
Group W organization will be available to support current
System services and costs and to partially lessen any
service or cost adjustments that may become necessary
in the future.
Since Group W continues to exist and guarantee performance
of the Franchises, and in light of the considerable
financial resources available to Group W for System
support at the conclusion of the stock transfer
transaction, the Commission has determined that the
financial stability of Group W is satisfactory for System
purposes.
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14. ~he Commission is only willing to recommend to its Member
Cities approval of the transfer of control of Group
W to Buyers subject to the actual closing of the stock
sale in June, 1986.
15. The Commission has been advised by Group W that the
approval of stock transfer transaction to Buyers shall
in no way be interpreted as or asserted to be an approval
of the transfer of ownership and control and ultimate
transfer of the Franchises and Systems to North Central
or any other party.
PERTINENT FRANCHISE PROVISION
The standard of review in this matter is the relevant
portion of Article XII, Section 1 of Cable Communications
Franchise Ordinance, which provides in part as follows:
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A. This Franchise shall not be assigned or transferred,
either in whole or in part, or leased, sublet or
mortgaged in any manner, not shall title thereto,
either legal or equitable or any right, interest
or property therein, pass to or vest in any person
without the prior written consent of City, which
consent shall not be unreasonably withheld. Further
Grantee shall not sell or transfer any stock or
ownership interest so as to create a new controlling
interest except with the consent of City, which
consent shall not be unreasonably withheld. The
transfers described in this paragraph shall, in
the sole discretion of City, be considered a sale
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or transfer of Pranchise within the meaning and
intent in the following paragraph.
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Similarly, Minnesota Statutes Section 238.083, subdivision.
4 provides:
Within 30 days after the public hearing, the
franchising authority shall approve or deny in writing
the sale or transfer request. The approval must
not be unreasonably withheld.
Based upon the foregoing Findings of Fact, the North
Suburban Cable Commission makes the following:
CONCLUSIONS
1. The Commission, on behalf of its Member Cities, gave
proper notice of the public hearing in this matter,
bas fulfilled all relevant substantive and procedural
requirements of law or rules and has the authority to
make a determination as to transaction and to recommend
that determination to its member cities.
2.
The Buyers have
qualifications.
met
the
legal
and
character
3. North Central and Group W, through their management
arrangements, meet the technical qualifications.
4.
Group W continues to have the financial qualifications
sufficient to own and operate the System.
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5. Any of the foregoing Pindings of Fact which might be
properly termed Conclusions are hereby adopted as such.
'l'HISREPORT . IS ROTAN ORDER AND NO AUTHORITY IS GRANTED
"EREIN. THE MEMBER. CITIES OF THE COMMISSION MUST ISSUE
A FINAL DETERMINATION WHICH MAY ADOPT OR DIFFER FROM
THE FOLLOWING RECOMMENDATIONS.
Accordingly, the North Suburban Cable Commission hereby
makes to its Member Cities the following:
2.
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RECOMMENDATIOIIS
1.
That the Member Cities by resolution approve the sale
by Westinghouse of all of the issued and outstanding
shares of the capital stock of Group W Cable, Inc. and
the transfer of control of Group W Cable, Inc. to the
Buyers, subject to an actual closing of the stock tranfser
transaction in _June, 1986, pursuant___to the terms and
conditions currently understood by the Commission as
evidenced by the Notice of Transfer, and other information
and documents, provided to said Commission and its
Member Cities.
That the approval of the transfer of ownership and control
of Group W Cable, Inc. to the Buyers be deemed not to
include any approval, either express or implied, as
to any subsequent transfer of ownership or control of
Group W or Group W Cable of the North Suburbs, Inc.
or transfer of the Cable Communications Franchise
Ordinances or the System to North Central Cable
Communications, L.P., or to any other entity or
individual.
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3.
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That the Commission's recommendation and acceptance
thereof by the Member Cities shall be null, void .and
of no effect should Group W on or before May 7, 1986,
fail to provide indemnity to the Commission and Cities,
in the form as set forth in Exhibit A attached hereto,
with such modifications as may be approved by the
Commission's counsel, against any claims alleging or
arguing that the recommendation or approval of the stock
transfer transaction is also an approval, either express
.or implied, as to any subsequent transfer of ownership
or control of the Cable Communications Franchise
Ordinances or the System to North Central Cable
Communications, L.P., or to any other entity or
individual.
4. That this approval is specifically conditioned upon
payment in full prior to an actual closing of the stock
transfer transaction in June, 1986, - of all expenses
incurred by the Commission related to the Request for
Approval of Transfer dated February 4, 1986, including
those related expenses incurred prior to receipt thereof,
but incurred in preparation for the receipt of the
Request for Approval.
The above listed resolution was
Director Weyandt
by Commission Director
moved by Commission
and duly seconded
Foley
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The following Commission Directors voted in the
affirmative:
Brandt, Eggert, Vellella, Skelly, Bauer, Foley, Linebarger,
Kaeding, Weyandt.
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'l'he following Commission Directors voted in the negative:
None
The
of
above resolution
May
was duly adopted this
, 1986;
day
1st
Steve Schmidt, Chairman
Alan Kaeding, Vice-Chairman
Ron Eggert, Secretary
A. Gale Linebarger ,Treasurer
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INDEMNITY JlGREEMBNT
.
This Agreement, dated May_ . 1986, by and among
North Suburban Cable Commission, a joint powers governmental
body (the "Commission"), GroupW Cable, Incorporated ("Group
W") and Westinghouse Broadcasting and Cable Incorporated
("Westinghouse"),
WITNESSETH
Whereas, Group W has requested that the Commission, and
each of its City-Members consisting of Arden Bills, Falcon
Heights, Lauderdale, Little Canada, Moundsview, New Brighton,
North Oaks, Roseville, St. Anthony And Shoreview, Minnesota
(collectively the "Cities") approve the sale and transfer
(the "Transfer Transaction") of all of the issued and
outstanding shares of the capital stock of Group W from
Westinghouse to a group of five purchasing shareholders
(collectively the "Buyers"),
Whereas, the Commission and the Cities also have been
requested to approve one or more corporate dissolution or
asset transfer transactions ("Subsequent Transactions")
involving the transfer to .. North Central Cable.. Communications
Company, L.P. ("North Central") of Group W Cable of the North
Suburbs, Inc., a subsidiary corporation of Group Wand/or
ownership of the Cities' cable communication franchises (the
"Franchises") and cable cODUlunication system (the "System"),
.
Whereas, a major consideration in the Commission's review
and evaluation of its approval or denial of the Transfer
Transaction has been and continues to be the clear and definite
separation and independent consideration of the Transfer
'l'ransaction apart from any Subsequent .Transactions for purposes
of assuring that (1) any approval of the Transfer Transaction
has no effect to approve, and does not indicate acceptance
or approval of any Subsequent Transaction, and (2) any
determinations or findings with respect to, or any approval
of, the Transfer Transaction will not be construed, interpreted
or viewed as consideration or consent to any Subsequent
'l'ransaction, or have the effect of binding or estopping the
COmmission and the Cities in their review, evaluation and
approval or denial of any Subsequent Transaction,
Whereas, notwithstanding written confirmations received
from Group W, the Buyers and North Central, representatives
of the Commission have received information and had discussions
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with representatives of North Central indicating that auch
aeparation and independent consideration of the ~ransfer
Transaction and any Subsequent Transactions _y I'lot be
recognized by or considered binding upon North Central in
the event that a Subsequent Transact~on is not _approved by
the Commission or the Cities~ and
Whereas, the Commission is willing to approve the ~ransfer
Transaction only upon the condition (in addition to any other
condi tions set forth in the COll\lJlission' sand Cities' approval
resolutions) that Group Wand Westinghouse indemnify the
Commission and the Cities as set forth herein.
Therefore, Group Wand Westinghouse hereby agree to
indemnify and hold harmless the Coll\lJlission, each of the Cities,
and the Directors, Council Members, officers, employees, and
agents thereof, from any and all claims, damages, liability,
costs and expenses, including legal fees, arising or resulting
from any judicial or administrative action or other legal
or governmental proceeding brought by any Buyer, lm assignee
of any Buyer's interests with respect to Group W, North Central
or any other proposed transferee or pUJ:chaser of the System
and the Franchises pursuant to a SUbsequent Transaction, if
and to the extent such claim, damage, liability or cost or
expense relates to or is based in whole or in part upon
allegations or arguments to the effect that by approving the
Transfer Transaction the Commission or the Cities have approved
or consented to any Subsequent Transaction, or are bound by
such approval in evaluating any Subsequent Transaction or
are estopped from independently considering any aspect or
evaluation criteria related to any Subsequent Transaction,
or that any party to a Subsequent 'l'ransaction has acquired
any beneficial or equitable interest in Group W Cable of the
North SUburbs, Inc., the Franchises or the System or has acted
detrimentally. in reliance upon the approval of the Transfer
Transaction.
The Commission shall give or cause to be qiven, notice
to Group Wand Westinghouse of any legal or governmental action
or proceeding involving matters subject to the above described
indemnity arrangements, shall permit Group W or Westinghouse
to assume the defense thereof, and shall obtain the consent
of Group Wand Westinghouse regarding any settlement of such
action or proceeding not involving a final determination of
such matters on their merits.
This Agreement shall be construed and enforced in
4It accordance with the laws of the State of Minnesota.
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IN WITNESS WHEREOF, the parties hereto have caused. this
Indemni ty Agreement to be duly executed by their authorized
officers and representatives, effective as of the day and
year first above written.
NORTH SUBURBAN CABLE CO~ISSION
GROUP W CABLE, INCORPORATED
By
Its
WESTINGHOUSE BROADCASTING AND
CABI.E, INCORPORATED
By_
Its
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