3.8. SR 07-06-2009 - Laserfiche WebLink

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In this case, Mr. Allen will remain Charter's largest single shareholder but will no longer own a majority of Charter's stock. A majority of Charter's stock will be held by certain bondholders. Moreover, while no stock voting agreements exist, the bondholders will be in a position to exercise actual control over Charter and its subsidiaries. Thus, the reorganization requires franchising authority consent under Minnesota law. Charter apparently does not dispute this since, after all, Charter filed FCC Form 394s seeking local approvals. When reviewing a requested franchise transfer or change in stock ownership in a franchise-holder, municipalities normally review legal, technical, and financial qualifications of the resulting company. Local determinations are entitled to significant deference and will be sustained if they are fairly debatable. See, Charter Communications v. County of Santa Cruz, 304 F.3d 927 (9~' Cir. 2002). CHARTER REORGANIZATION Charter represents that the reorganization will not result any operational changes, nor any perceptible change or adverse impact on local cable service or operations. Charter will remain bound by all obligations and liabilities under the franchises including liabilities arising prior to reorganization. Accordingly, there are no significant legal or technical qualification issues to review. Charter's financial qualifications are obviously an issue. Charter maintains that the reorganization will improve its financial position. The question, however, is not whether Charter will be better off. Rather, the issue for review is whether Charter will emerge from bankruptcy with capacity to perform all franchise obligations for the term of the franchises. We have not retained a financial advisor to perform an in-depth analysis of this question. We have instead relied upon a financial review performed by the Minnesota Department of Commerce (DOC). The DOC reviewed the reorganization and provided its report to the