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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): December 31, 1997
Falcon Classic Cable Income Properties, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
California 000-18266 95-4200409
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
10900 Wilshire Blvd., 15th Floor, Los Angeles, California 90024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (310) 824-9990
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ITEM 5. OTHER EVENTS.
As previously reported in a Form 8-K dated June 30, 1997, pursuant to
the Partnership Agreement, on June 27, 1997, Falcon Classic Cable Income
Properties, L.P. (the "Registrant") entered into an Asset Purchase Agreement
(the "Asset Purchase Agreement") with three affiliates of the Registrant's
general partner to sell substantially all of the Registrant's assets for
$82,000,000 in cash. The purchase price represented the median appraised value
of the assets.
As previously reported in a Form 8-K dated October 2, 1997, on or about
September 2, 1997, Paul J. Isaac, a Unitholder of the Registrant, purporting to
act on behalf of himself and other similarly situated Unitholders, filed a
putative class action suit in Los Angeles County Superior Court against the
Registrant, its general partner and certain of its directors and officers
alleging "Breach of Fiduciary Duty, Breach of Contract, [and] Breach of the
Implied Covenant of Good Faith and Fair Dealing" in connection with the pending
sale of the Registrant's assets pursuant to the terms of the Asset Purchase
Agreement (the "Lawsuit"). The Lawsuit is entitled Paul J. Isaac et al. v.
Falcon Classic Cable Income Properties, L.P., Falcon Classic Cable Investors,
L.P., Falcon Holding Group, L.P., Marc B. Nathanson, Frank J. Intiso, and Does
1-100, inclusive., Case No. BC177205, and is currently pending in Los Angeles
County Superior Court.
The Registrant has maintained and continues to maintain that the Lawsuit
lacks merit, and that the defendants, and each of them, are without fault,
wrongdoing, or liability in relation to the acts and conduct alleged in the
Lawsuit.
Effective as of December 31, 1997, the parties reached an agreement (the
"Settlement Agreement") resolving and settling the Lawsuit.
Subject to various conditions, including Court approval and sufficient
Unitholder participation, of which there can be no assurance, and subject to
various deductions, including Class Counsel's court approved attorneys' fees and
expenses and the cost of notification and administration, and in exchange for a
complete dismissal of the Lawsuit with prejudice and releases, and without
admitting or conceding any liability or wrongdoing whatsoever, the defendants
have agreed to establish a settlement fund in the amount of $1,250,000 (the
"Principal") plus simple interest accruing thereon, at the rate of 10% per
annum, beginning January 1, 1998 and terminating upon payment of the Principal
into the settlement fund, payable to members of the settlement class, defined as
Unitholders as of June 30, 1997, the date of the Registrant's announcement of
the pending sale of the Registrant's assets. The defendants have also agreed to
pay to the Unitholders, in addition to the purchase price specified in the Asset
Purchase Agreement, interest on the net purchase price at the rate of 10% per
annum for the period beginning January 1, 1998 and terminating upon payment of
the purchase price. In addition, the defendants have agreed, subject to the
terms and conditions of the Asset Purchase Agreement, to cause the completion of
the acquisition of the four cable systems owned by the Registrant for which
Local Authority Consents (as that term is defined in the Asset Purchase
Agreement) have
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been obtained, regardless of whether Local Authority Consents are obtained for
the transfer of the Somerset, Kentucky cable system ("Somerset"). The
Registrant's inability to secure Local Authority Consent for Somerset could have
afforded a basis for terminating the entire transaction. Defendants also have
agreed, subject to the terms and conditions of the Asset Purchase Agreement, to
cause the completion of the acquisition of Somerset if Local Authority Consents
for that transfer are procured, and to extend the time for receiving such
consents.
The foregoing is a summary of the terms of the Settlement Agreement and
is qualified in its entirety by reference to the full text of the Settlement
Agreement, which is attached hereto as Exhibit 5.1 and is incorporated herein by
this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(i) Exhibits
Exhibit No. Description
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5.1 Stipulation of Settlement, dated as of December 31, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Falcon Classic Cable Income Properties, L.P.
By: Falcon Classic Cable Investors, L.P.
General Partner
By: Falcon Holding Group, L.P.
General Partner
By: Falcon Holding Group, Inc.
General Partner
By: /s/ Michael K. Menerey
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Michael K. Menerey
Chief Financial Officer
Date: January 12, 1998
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Sequentially
Numbered
Exhibit Description Page
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5.1 Stipulation of 5
Settlement dated
December 31, 1997
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