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HomeMy WebLinkAboutRES CC 2002 2007 2002 0918RESOLUTION NO. 2002 -2007 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, EXPRESSING SUPPORT FOR AND PARTICIPATING IN A COALITION OF LOCAL GOVERNMENT ENTITIES THAT ARE LOCAL FRANCHISING AUTHORITIES IN COMMUNITIES WHERE ADELPHIA COMMUNICATIONS IS A CABLE TELEVISION FRANCHISEE, WHICH COALITION WILL DEVELOP AND IMPLEMENT A STRATEGY FOR PROTECTING THE INTERESTS OF LOCAL GOVERNMENT, ITS RESIDENTS, AND ALL ADELPHIA CABLE TELEVISION SUBSCRIBERS IMPACTED BY THE ADELPHIA BANKRUPTCY WHEREAS, Adelphia Communications hereinafter referred to as Adelphia, is a City of Moorpark cable television franchisee; and WHEREAS, in recent months, Adelphia has undergone well - publicized financial difficulties, including the disclosure of approximately $3.1 billion in previously undisclosed off - balance sheet obligations, the commencement of a Securities and Exchange Commission and two federal grand jury investigations, allegations of widespread corporate fraud, substantial defaults on bondholder debts, numerous shareholder lawsuits against Adelphia, and the arrest of five former Adelphia corporate executives; and WHEREAS, on June 25, 2002, Adelphia, and more than two hundred (200) of its subsidiaries, filed for bankruptcy protection; and WHEREAS, recent press reports and other information indicate that Adelphia has obtained $1.5 billion in debtor -in- possession financing to sustain its operations while the bankruptcy is proceeding; and WHEREAS, in the context of a bankruptcy, Adelphia will be required to assume, assign, or reject the current franchise agreement with the City of Moorpark, and during that process, the City of Moorpark should play an active and important role so as to ensure that all franchise obligations are satisfied and local cable television subscribers receive the highest quality, uninterrupted, cable television service; and Resolution No. 2002 -2007 Page 2 WHEREAS, Adelphia is currently in renewal negotiations with the City of Moorpark whereby it seeks to extend its contract rights, which negotiations may be complicated by the bankruptcy filing; and WHEREAS, complicated legal and practical issues will arise during the course of the bankruptcy, which will require: (i) extensive analysis of local government's rights and obligations; (ii) preparation of financial documents and correspondence explaining the practical ramifications of the various proposals, including debt and equity restructurings that may arise; and (iii) a careful attention to the protection of the public health, safety, and welfare, the quality and range of cable television services, and the financial and performance based rights of local government; and WHEREAS, the anticipated bankruptcy may result in tension between local government's authority to control its public rights -of -way and duty to protect subscribers, Adelphia's creditors' desire to obtain maximum value from the Adelphia franchises with minimum delay, potential asset purchasers' desire to pay the lowest possible price and incur the minimum possible obligation when seeking to buy cable franchises from the bankruptcy estate, and the bankruptcy court's desire to quickly administer the case and confirm a bankruptcy plan; and WHEREAS, by forming a coalition, local government can present a united front in the anticipated bankruptcy case, which will likely allow local government to assert more influence over the ultimate conditions under which Adelphia or some other cable operator will provide services to cable subscribers on a going - forward basis; and WHEREAS, bankruptcy law provides, in some circumstances, for the formation of "committees" of parties sharing like interests in a bankruptcy proceeding; and WHEREAS, press reports and Adelphia's management, as well are currently mapping out their and committee formations, which fundamental objectives of local television franchises; and other information indicate that as Adelphia's major creditors, respective bankruptcy strategies are not likely to align with the government with respect to cable WHEREAS, if an official committee of local government entities were appointed by the United States Trustee, the Resolution No. 2002 -2007 Page 3 professional fees incurred by the committee would be paid by the bankruptcy estate; and WHEREAS, on July 12, 2002, the Executive Director of the National Association of Telecommunications Officers and Advisors (hereinafter referred to as NATOA) and the President of the States of California and Nevada Chapter of NATOA (hereinafter referred to as SCAN NATOA) , of which the City of Moorpark is a member, sent a letter to Adelphia's General Counsel soliciting Adelphia's support before the United States Trustee to appoint a local government committee; and WHEREAS, on July 31, 2002, the County of St. Port Lucie, Florida, filed a motion in the United States Bankruptcy Court for the Southern District of New York for the creation of an official committee of local franchise authorities and a hearing date has been set for September 17, 2002; and WHEREAS, on August 15, 2002, Mr. Fisher responded to the NATOA /SCAN NATOA letter (Exhibit B) and indicated that Adelphia would remain neutral (neither support nor oppose) on the formation of a local government committee. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The Recitals above are hereby declared to be true, accurate, and correct. SECTION 2. Based upon and through the actions described in the above Recitals, as well as other written and oral evidence submitted at the Hearing, it is hereby determined that the City of Moorpark will benefit from participating in a coalition of cities, counties, and special districts that act as the local government committee, which would strive to protect local government, its residents, and all Adelphia cable television subscribers impacted by the Adelphia bankruptcy. SECTION 3. The City Council hereby expresses support for the appointment of an official committee of local government entities by the United States Trustee. SECTION 4. The City Council approves participation of the City of Moorpark in the event such an official committee of local government entities is appointed by the United States Trustee. Resolution No. 2002 -2007 Page 4 SECTION 5. The this resolution and filed in the book of City Clerk shall shall cause a original Re: PASSED AND ADOPTED this 18th ATTEST: certify to the adoption of certified resolution to be Deborah S. Traffenste t, City Clerk Resolution No. 2002 -2007 Page 5 STATE OF CALIFORNIA ) COUNTY OF VENTURA ) ss. CITY OF MOORPARK ) I, Deborah S. Traffenstedt, City Clerk of the City of Moorpark, California, do hereby certify under penalty of perjury that the foregoing Resolution No. 2002 -2007 was adopted by the City Council of the City of Moorpark at a regular meeting held on the 18th day of September, 2002, and that the same was adopted by the following vote: AYES: Councilmembers Wozniak NOES: None ABSENT: Mayor Hunter ABSTAIN: None Harper, Mikos, Millhouse and WITNESS my hand and the official seal of said City this 7th day of October, 2002. Deborah S. Traffensted , City Clerk (seal)