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HomeMy WebLinkAboutRES 2002-63RESOLUTION NO. 2002-63 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR ENCOURAGING THE UNITED STATES TRUSTEE TO CREATE A COMMITTEE COMPRISED OF REPRESENTATIVES OF LOCAL GOVERNMENTS SERVED BY ADELPHIA TO 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 City of Diamond Bar cable television franchisee; WHEREAS, in recent months, Adelphia has undergone well-publicized financ difficulties, including the disclosure of approximately $3.1 billion in previous undisclosed off-balance sheet obligations, the commencement of a Securities ai Exchange Commission and two federal grand jury investigations, allegations widespread corporate fraud, substantial defaults on bondholder debts, numeroi shareholder lawsuits against Adelphia, and the arrest of five former Adelphia corpora executives; WHEREAS, on June 25, 2002, Adelphia, and more than two hundred (200) of i subsidiaries, filed for bankruptcy protection; WHEREAS, recent press reports and other information indicate that Adell attempted to sell many of its franchises to third -parties within the two weeks prior to bankruptcy filing, but those negotiations failed; WHEREAS, recent press reports and other information indicate that Adelph has obtained $1.5 billion in debtor-in-possession financing to sustain its operatior while the bankruptcy is proceeding; WHEREAS, in the context of a bankruptcy, Adelphia will be required to assur assign, or reject the current franchise agreement with the City of Diamond Bar during that process the City of Diamond Bar should play an active and important role as to ensure that all franchise obligations are satisfied and local cable televis subscribers receive the highest quality, uninterrupted, cable television service; WHEREAS, complicated legal and practical issues will arise during the course the bankruptcy, which will require: (i) extensive analysis of local government's rights a obligations; (ii) preparation of financial documents and correspondence explaining t practical ramifications of the various proposals, including debt and equity restructurin that may arise; and (iii) a careful attention to the protection of the public health, safe Res. 2002-63 and welfare, the quality and range of cable television services, and the financial s performance based rights of local government; WHEREAS, the anticipated bankruptcy may result in tension between to government's authority to control its public rights-of-way and duty to protect subscribe Adelphia's creditors' desire to obtain maximum value from the Adelphia franchises w minimum delay, potential asset purchasers' desire to pay the lowest possible price a incur the minimum possible obligation when seeking to buy cable franchises from t bankruptcy estate, and the bankruptcy court's desire to quickly administer the case a confirm a bankruptcy plan; 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 mo e influence over the ultimate conditions under which Adelphia or some other cab e operator will provide services to cable subscribers on a going -forward basis; WHEREAS, bankruptcy law provides, in some circumstances, for the formati n of "committees" of parties sharing like interests in a bankruptcy proceeding; WHEREAS, press reports and other information indicate that Adelphia s management, as well as Adelphia's major creditors, are currently mapping out their respective bankruptcy strategies and committee formations, which are not likely to alic n with the fundamental objectives of local government with respect to cable televisi n franchises; WHEREAS, if an official committee of local government entities were appoin by the United States Trustee, the professional fees incurred by the committee would paid by the bankruptcy estate; WHEREAS, on July 12, 2002, the Executive Director of the National Associatio of Telecommunications Officers and Advisors (hereinafter referred to as NATOA) an the President of the States of California and Nevada Chapter of NATOA (hereinaftf referred to as SCAN NATOA) sent a letter to Adelphia's General Counsel solicitin Adelphia's support before the United States Trustee to appoint a local governmer committee; WHEREAS, on July 31, 2002, the County of St. Port Lucie, Florida, filed a motio in the United States Bankruptcy Court for the Southern District of New York for th creation of an official committee of local franchise authorities and a hearing date ha been set for September 17, 2002; WHEREAS, on August 15, 2002, Mr. Fisher responded to the NATOAIS NATOA letter (Exhibit B) and indicated that Adelphia would remain neutral (nE support nor oppose) on the formation of a local government committee; Res. 2002-63 NOW, THEREFORE, the City Council of the City of Diamond Bar does h resolve as follows: The Recitals above are hereby declared to be true, accurate, and correct. 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 Diamond Bar 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 subscrib rs impacted by the Adelphia bankruptcy. 3. City of Diamond Bar hereby expresses support for the appointment of an offi committee of local government entities by the United States Trustee. 4. Diamond Bar City Council approves participation of the City of Diamond Bar the event such an official committee of local government entities is appointed by t United States Trustee. PASSED AND ADOPTED by the City Council of the City of Diamond Bar on the 31 day of September 2002. WEN CHANG, MAYOR 1, LYNDA BURGESS, City Clerk of the City of Diamond Bar, California do herelz that the foregoing Resolution was duly and regularly passed and adopted by the City Council City of Diamond Bar, California, at its regular meeting held on the 3r day of September , the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS ABSTAINED: COUNCIL MEMBERS: } n Herrera, Huff, Zirbes, MPT/O'Connor, MICha None None None ynda Burgess, City'Clerk City of Diamond Bar Res. 2002-63 r certify if the 002, by