SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 29, 1996
Falcon Cable Systems Company, a California limited partnership
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
1-9332 95-4108170
(Commission File Number) (IRS Employer Identification No.)
10900 Wilshire Boulevard, 15th Floor, Los Angeles, CA 90024
(Address of principal executive offices) (Zip Code)
(310) 824-9990
(Registrant's Telephone Number)
ITEM 5. OTHER EVENTS.
In its Quarterly Report on Form 10-Q for the period end-
ing September 31, 1995, the Partnership provided the follow-
ing "Other Information":
The Partnership Agreement provides that the General
Partner shall use its best efforts to cause the Partner-
ship to sell all of the Partnership's cable systems be-
tween December 31, 1991 and December 31, 1996, the "ter-
mination date" of the Partnership. The Partnership has
stated in prior public reports and filings that, from
time to time, it may enter into discussions regarding
the sale of its cable systems to affiliates or other
parties.
In addition, the Partnership Agreement provides the
General Partner or its affiliates the right to purchase
for cash substantially all of the Partnership's cable
systems at any time after December 31, 1991 without so-
liciting unaffiliated purchasers. Pursuant to the Part-
nership Agreement, in the event the General Partner or
its affiliates exercise such right, the purchase price
will be determined solely by reference to an "appraised
value" determined pursuant to an appraisal process set
forth in the Partnership Agreement (the "Appraisal Pro-
cess"). The Partnership Agreement provides that the
"appraised value" shall be determined by the average of
three appraisal evaluations of the Partnership's cable
systems and provides that one appraiser is to be se-
lected by the General Partner; one appraiser is to be
selected by a majority vote of the independent members
of the Partnership's advisory committee; and one ap-
praiser is to be selected by the two appraisers already
so chosen. If any such appraisal is expressed as a
range, then in calculating the average, the minimum
amount of such appraisal shall be used. In the event of
a sale of a cable system, including a sale to the Gen-
eral Partner or its affiliates, the General Partner will
be entitled to a fee equal to 2 1/2% of gross proceeds
from the sale less any amounts paid as brokerage or
similar fees to third parties.
The Partnership has previously disclosed that the
General Partner or its affiliates may from time to time
explore the possibility of exercising such purchase
right. The General Partner, in its exploration of the
possibility of exercising such purchase right, has now
initiated the Appraisal Process by inviting the indepen-
dent members of the Partnership's advisory committee to
designate a nationally-recognized independent appraiser.
In conjunction with the initiation of the Appraisal
Process, certain affiliates (the "Affiliates") of the
Partnership and its General Partner, including Marc B.
Nathanson (the Chairman of the Board, Chief Executive
Officer, President and a director of Falcon Holding
Group, Inc., the General Partner's sole general partner)
have made a preliminary proposal (the "Proposal") to the
independent members of the Partnership's advisory com-
mittee with respect to an exchange transaction (the "Ex-
change"). Under the Proposal, the Exchange would take
place immediately prior to the exercise by the General
Partner or its affiliates of their right to purchase for
cash substantially all of the Partnership's cable sys-
tems remaining after giving effect to the Exchange. In
the Exchange, substantially all of the Falcon Units
owned by the Affiliates would be exchanged for a portion
(by value) of the Partnership's cable systems equal to
the proportion of total outstanding Units exchanged by
the Affiliates (the Affiliates would also relieve Falcon
of an equal proportion of its total debt).
Any decision of Falcon to pursue the Proposal, the
Exchange, or the sale of the cable systems of the Part-
nership in accordance with the rights of the General
Partner under the terms of the Partnership Agreement (as
described above) or otherwise, ultimately will be depen-
dent upon numerous factors including, without limita-
tion, (i) the receipt by the General Partner of an opin-
ion of a qualified appraiser or other financial advisor
selected by the independent members of the Partnership's
advisory committee as to, among other things, the fair-
ness of the Proposal as compared to a sale of all of the
Partnership's cable systems (without giving effect to
the Exchange) to the General Partner or its affiliates
in accordance with their rights under the Partnership
Agreement (as described above), or the conclusion on
another basis that such fairness was otherwise estab-
lished ; (ii) the availability of necessary equity and
debt financing on favorable terms; (iii) the relative
attractiveness of available alternative business and
investment opportunities; (iv) the regulatory environ-
ment for cable properties; (v) future developments re-
lating to the Partnership and the cable industry, gen-
eral economic conditions and other future developments.
If the Proposal is pursued and the Exchange is consum-
mated, the Affiliates expect that they would defer their
potential tax liability as compared to a liquidation of
the Partnership without effecting the Exchange.
Although the foregoing reflects activities which
the General Partner is currently exploring with the
Partnership and the Affiliates with respect to the Part-
nership, the foregoing is subject to change at any time.
Accordingly, there can be no assurance that the Pro-
posal, the Exchange, or the sale of the cable systems of
the Partnership in accordance with the rights of the
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General Partner and its affiliates under the terms of
the Partnership Agreement (as described above) or other-
wise will be pursued or, if pursued, when and if any of
them will be successfully consummated. For additional
information on the terms of the Partnership Agreement,
see "Item 1 --Business --Introduction" and Item 13 --
"Certain Relationships and Related Transactions -- Con-
flicts of Interest" in the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1994.
The Partnership has entered into a letter agreement, a
copy of which is filed as an exhibit hereto and incorporated
herein by reference, dated January 29, 1996, with a group of
holders of limited partnership interests in the Partnership
(the "Unofficial Unitholder Committee"), consisting of the
Baupost Group, Inc., Cumberland Associates, Harvest Capital,
L.P., and Tweedy, Browne Company L.P., and collectively hold-
ing approximately 1,339,000 Partnership Units (or approxi-
mately 21% of the outstanding Units).
As contemplated by the Partnership Agreement and the
Company's Quarterly Report on Form 10-Q for the period ending
September 31, 1995, the appraiser to be selected by the Gen-
eral Partner, the appraiser to be selected by a majority vote
of the independent members of the Partnership's advisory com-
mittee, and the appraiser to be selected by the two apprais-
ers so chosen, have each been selected and are currently un-
dertaking the appraisal contemplated by the Partnership
Agreement as described above. The three appraisers are, re-
spectively, Malarkey-Taylor Associates, Inc., Kane-Reece As-
sociates, Inc., and Waller Capital Corporation.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
1 Letter Agreement dated January 29, 1996, be-
tween the Unofficial Unitholder Committee and
the Partnership.
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SIGNATURE
Pursuant to the requirements of the Securities Ex-
change Act of 1934, the registrant has duly caused this re-
port to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: January 31, 1996
FALCON CABLE SYSTEMS COMPANY
By: Falcon Cable Investors Group
Managing General Partner
By: Falcon Holding Group, L.P.
General Partner
By: Falcon Holding Group, Inc.
General Partner
By: /s/ Michael K. Menerey
___________________________
Michael K. Menerey, Secretary
and Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description Page No.
1 Letter Agreement dated
January 29, 1996, between
the Unofficial Unitholder
Committee and the Partner-
ship.