HomeMy WebLinkAboutOB 1 SIX STAR CABLE 02-02-81DATE:
TO:
FROH:
SUBJECT:
1/27/81
OLD BUSINESS
Inter-Corn
HONORABLE MAYOR AND CITY COUNCIL
JAMES G. ROURKE, CITY ATTORNEY
SIX STAR CABLEVISION, REQUEST FOR APPROVAL OF TRANSFER
OF SHARES OF SIX STAR CABLEVISION OF TUSTIN, INC.
You will recall.that the City has previously had a
request from Six Star Cablevision of Tustin, Inc. for approval
of transfer of its shares. This approval is required by the
terms of the franchise which was granted Six Star. The matter
has been continued several times for further information to
be furnished to the City. We have now received the final
information requested. Letter of attorney William Marticorena
is enclosed.
Since the original request of Six Star we became
aware of the problems with the Securities and Exchange Commission
of certain persons involved in the complex ownership of Six
Star Cablevision of Tustin, Inc. Certain materials in that
regard are enclosed. From the information we have received
to this point we do not have any information which indicates
that there have been any improper activities by Six Star
Cablevision of Tustin, Inc., the City's franchisee. The
problems that caused the embroilment with the Securities and
Exchange Commission involve the sale of fractional shares in
other corporations. The Securities and Exchange representa-
tive has advised me that to the best of that agency's know-
lege and belief, Six Star Cablevision of Tustin, Inc. has not
been fractionalized.
Enclosed herewith is a form of resolution. This
resolution sets forth in detail the complex ownership of Six
Star Cablevision of Tustin, Inc. and would, if adopted, give
consent to the transfer of ownership. However, in addition
to the approval by the City of"transfer of ownership, Six
Star is also .requesting that any future transfer of shares of
Neilson Enterprises, Inc. or of S~-~ Star Cablevision Holding
Company, Inc. not require further Council approval. The
basis for this request is as set forth in the enclosed letter
of attorney Marticorena. Prior to the disclosure of the
adverse information regarding certain persons involved in
the ownership of Six Star, we were prepared and intended to
the transfer requested and also that the Council consent to
future transfers of the shares of Neilson Enterprises, Inc.
without additional Council approval, however, with the more
current information, this matter is submitted to the Council
without recommendation.
JGR:se:D:l/26/81
Enclosure
cc: D.B., w/encl.
William Marticorena
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RESOLUTION NO. 81-10
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TUSTIN, CALIFORNIA, APPROVING TRANSFER OF
SHARES OF SIX STAR CABLEVISION OF TUSTIN, INC.
WHEREAS, Six Star Cablevision of Tustin, Inc., a California
corporation waslgranted a franchise to operate a cable television
;
system within the City of Tustin by Ordinance No. 792, as amended;
and
WHEREAS, S~ction 7418(d) of the Tustin City Code requires
that ownership interests of the franchisee shall not be trans-
ferred without the consent of the City; and
WHEREAS, t~e owners of the outstanding shares of Six Star
Cablevision of Tustin, Inc., a California corporation, now
desire to transfer those shares to Six Star Cablevision Associates,
Limited, a New Jersey.limited partnership, and immediately there-
after to Six Star Nielson Cablevision, a California partnership;
and
WHEREAS, ~t has been represented and warranted to the City
of Tustin by the franchisee as follows:
A. Six Star Cablevision Associates, Limited, is a New Jersey
limited partnership consisting of Six Star Cablevision, Inc.,
a New Jersey corporation, as general partner, and Six Star
Cablevision Holding Co., Inc., Roger H. Maggio, Paul Skulsky,
Stuart C. Harris and Victor Sharar, as limited partners.
B. Six Star Cablevision, Inc., is a New Jersey corporation,
all of the shares of stock of which are owned by Paul Skulsky,
Stuart C. Harris, Roger H. Maggio and Victor Sharar.
C. Six Star Cablevision Holding CO., Inc., is a New
Jersey corporation, all of the shares of stock of which are
owned by Paul Skulsky, Roger H. Maggio and Stuart C. Harris.
D. Six Star Nielson Cablevision is a California general
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partnership composed of Six Star Cablevision Associates
Limited, described above, and N.E.I.-CAL., INC., a California
corporation all of the shares of which are owned by Nielson
Enterprises, Inc., a Delaware corporation.
E. All of the shareholders of Nielson Enterprises, Inc.,
a Delaware corporation, who own more than three percent (3%) of
the outstanding shares of stock of said corporation are: Glenn
E. Nielson, Glenn W. Nielson, Margaret Ruth Bullock, Joanne
Livingston, James Nielson,/Annmarie Hales, and Olive W. Nielson.
NOW, THEREFORE, the ~ity Council of the City of Tustin,
California, does hereby resolve as follows:
1. The outstanding shares of Six Star Cablevision of
Tustin, Inc., which was granted a cable television franchise
pursuant to Ordinance No. 792, as amended, may be transferred
and assigned to Six Star Cablevision Associates, Limited, a
New Jersey limited partnership, and immediately thereafter
may be transferred to Six Star Cablevision Associates Limited,
a New Jersey limited partnership, and immediately thereafter
transferred to Six Star Nielson Cablevision, a California
partnership, the structure and ownership of the shares of each
and all of said entities to be as represented and warranted
to the City of Tustin, as set forth hereinabove.
2. This approval shall be contingent upon and subject
to the further requirement that no change, direct or indirect,
in the structure or ownership of Six Star Nielson Cablevision,
or any of the entities which are a part thereof, or of any of
the owners of shares of any of said entities,~ §h~ll be effective
without the prior approval by resolution of the City Council of
the City of Tustin or otherwise the said franchise shall be
forfeited.
PASSED AND ADOPTED at a regular meeting of the City
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Council
ATTEST:
of the
CITY CLERK
JGR:se:D:7/14/80
JGR:se:R:ll/7/80
JGR:se:R:ll/7/80
JGR:se:R:i/17/81
City of Tustin,
, 1981.
California, this
MAYOR
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day of
RUTAN & TUCKER
ATTORN~'¥~ AT LAW
January 22, 198~
James G. Rourke
Attorney at Law ' '
1055 North Main, Suite 1020
Santa Ana, California 92701
Dear Jim:
This letter is to reiterate the request of Six
Star Nielson Cablevision to delete both Nielson Enterprises
and Six Star Cablevision Holding Company, Inc. froin the
stock'transfer restrictions of the resolution approving
the transfer of shares front Six Star Cablevision to Six
Star Nielson Cablevision. As I recall from our telephone
conversation, you agreed to recommend to the City Council
that Nielson Enterprises, because of the diversified nature
of that company, be eliminated from the stock transfer
provision.
Six Star Cablevision Holding Company, Inc. is likewise
a diversified company which owns franchises in a number of
states, including California. It is also but a limited
partner in Six Star Cablevision Associates, Limited, a New
Jersey Limited Partnership, which is the general partner of
Six Star Nielson Cablevision. Thus, Six Star Cablevision
Holding Company, Inc. plays a very limited role in Six Star
Nielson Cablevision, and has no operational control over the
Tustin franchise. The majority of the holdings of Six Star
Cablevision Holding Company~ Inc. are in areas outside of
Southern California. ~'
The transfer of the catstanding shares of Six Star
Cablevision Holding Company, Inc. would have little, if any,
'- RJ'TAN & TUCKER
James G. Rourke
Page Two
January 22, 1981
impact upon the ability of Six Star Nielson Cablevision to
construct or operate the Tustin CATV System. However, a
stock transfer restriction upon that entity may hinder its
efforts to secure financing for the construction of wholly
unrelated systems and thus be undesirable from a financial
planning viewpoibt. Therefore, we respectfully request that
the stock transfer restriction upon Six Star Cablevision
Holding Company, Inc. be eliminated.
I look forward to discussing this issue with the Council
at their meeting iof February 2, 1981. If you have any questions
in this matter o2 wish to discuss it further, please do not
hesitate to call me.
Sincerely,
RUTAN & TUCKER
William M. Marticorena
danuary 5, l>ul
Segional A:l::.inist ra tot
Securities & ~ ~'~ ..' -
26 Fe~?eral Plaza
~:ew v~,-'.._.~_,., ~ew York 10007
In the Matter of Stuart
C. Harris, et al.
On Feh. ru~.r? 27, 1980, you wrote to ;;r. Dan Biankcnship,
Cit~: A~::~inistr~tor of tl;e City of Tu~tin, a.=A-.inq us for cer-
tain infor:~ation regarding Six Star Cablevision (un~]er its
vari_~us nar. es z:n~] affiliates) an~ persons related thereto
re which t'."~e City
'-"e h--..~;~ ..... .... ==._..,- ;.e?,~- -' in the Los
i~ns a~g:inst ~iz ~tar (un~er its variou~ ha?es) an~] Messrs.
~.ecau:~e the City of Tustin is involved with Zix Star
Ca::l,~vision of T~stin by reason of havi~g cranked to it in
1~7~ a mon-e×c!u~.ive franchise for c&blevision in certain
l~ortion£..' ef t+~e City, we. are very concerned and intcreste~
iD io~.n~,--;n.= .... as . -c~.~ ~ a~ ,~)cssii:l~.- about these co,~,.ponies and
their
','.e woulz~, appreciate if you woul{] [.~roviC~e us .~n as
In_c .... ~ulon as .~ ..... ~.,le for our review an~ consi~.eration.
Very truly yours,
Ci'£Y OF 5~USTIi~
BY
12/30/E0
DCc:
City Attorney
:.euicnal Of£ic~
York, ;~ew York I0007
January 5, 1981
Securities & Exchange Commission
500 North Capitol Street
Washington D. C. 20549
RE:
In the Matter of Stuart
C. Harris, et al.
Gentlemen:
We read in the Los Angeles Times~of the proceedings and
consent decree by some of the defendants in the above-referenced
matter relative to Six Star Cablevision, Messrs. Harris, Skulsky
and ~.~agiore.
Because the City of Tustin previously granted a non-
exclusive franchise ~o Six Star Cablevision of Tustin, we are
very concerned and interested in knowing as much as possible
about the defendants in the above-referenced matter.
Accordingly, we would appreciate if you could advise us
as to what materials might be available which we could order
for our review. ~
Very truly yours,
CITY OF TUSTIN
BY
C~y Attorney
JGR:se:D:12/30/80
City Center
Centennial
]-usti~, California 92680
(714) 544-8890
with 96ntroversy over- its: ?.,~with Nielson Enterpris~ (.
hearings 'on 'the
.companies,
biggest name~ 'ih
: -' -the computer
tdbeat
future.':
of cable television- Santa
reevaluatiiag erie of the~ ~eserVed for local haves-.._31:
the wake zof : ':"~'--"' prediction
of three 0f the 'firm's' ' r su6cess against
~d Aleks, head of t
hn our Santa
"th~k the
(bid] "Oti its'merit..s,'t,
Could Probably Do Ii
represe
Santa Arm: - ,ystem,they
, that the nine Martidbr~ria 'of Rutan ::' sit down and
'a Santa Aha law firrm': ::~' * 'it,'
_ aefi6n-'w~ the latest :<¢-_'."_But' these ne',,(
'i~e/n'aih und6r 71OCk' and key:L'. 'itl' ~,the- inerea~gly-'7,~ i~i-talnly i. fidrease the
/aid City 6or~ultani Carl Pilniek: l :~ble~ f~nchise' ~ic.?y'thei~,bein~'a,~le t0.1~a
os Ang~ icl still has- to:'cbn/pl6te. '): it/re iff- SahtA Aha, c0nsidercd a k*~"j,'.'s, ufic,essfully.' ~.!~ ~.~('.
!eport on each.oflthe pr0po~ls;. ',/n~rk6£:iri .h' field Witli potentially'"s~~. . R.ey. es said that'at.
ining .competirig:'e6sts,I ge ~rv?e.?~ Cv//~ finan~'i~l ~rowth.
technology, ii.:~'..i}-,' :";:'-~ '~i- (!~:': 5,~?~: :~'.:L ': ':: .... "'.. ;" '.'.; ":~.":'??? how: many massive
"; ' ~' '~' ' ~'" '~b: '(~u'~ <'' '<':Aftei- "one bidder, .Teleprompmr ' "~;mi~fit be hidden ¢ the
'~9~*, [°.. -~"S.~n?.g;* .....[~.n~-.1. ~? '"~bl~ TV/rah' ~i local advertisemen(: ?temi :~'.'.'-' 'i 2 ;: 5 ;_ < ::7
At the time City ~anager Arnom.," Nov- 12 'e'xtollih~ its 'umrmsal 'and :-:'.' · ~' L '- ' ~'i _;..'.._
~?o.n ~'.. ord, ered ~ th9 i:'.~P, r6 .P°S .a~, '::~'seekLng}''.eoris~r/'
~<ea up,?ayor ,mmes.w.a:r..a sma. - Manhger .Wilson warned all bidders :." agai/iit Woods;'38, but
thq move was necessary lo (nseour= ' ~ ' · - ·
· :< tO avoid similar ~,-.~r
lobbying prior to the hearings.':<. bidsWere unde
~ard urged-that the'h~arings: .?<::-., ~,-;-; '-;;
i~o. Inediat¥lv '" '' ': ' '''/~;>" '):''2' "-~kll gllfltler8
· · eo mc' ;i> i jh'', h": · ........
h*a't'the'pre-he~i~ing review . '{vhich has a local office 'in Ne~'P°rt'-: ,..winch, ,m?m. oea ow. nih
nde~t, i~_'ssibly tintil 'a 'new · '~Beach and Six-Star, the"other bid- ~;,-:7,mansx°~n'-'.'-lux
takes over after the M~reh 3 ·: ders'include American
Four of the s~evez~'~ouneil ' ' Communieati°ns, .. California" C9: ':" ;'~ 5L~':---- ~[~
) :.*c:"--r - Cablev~ioi/s--v¢ estate
administration' is ~itdcl. C~ble TV
CableviSion of .Sant~' Xna[?'.?
:-S~i- Niek~fn ~::~ Productions ~
affiliate.grOups.
a' fiZanchise in
aa Villa Park: ~-
Accordih~t3-d Si~:S~. N-ieison-''
firm of Santa
':: Court
egedly. Used
~ocia) Seeurity
br' records .tO fde'
we
6ri " and techz:?
time.-4
n New JerSey;~' ,~ _., .- ~,.,
Niels$fi Enferprlses'Iric., X ~ '~dd~ tha,t
fl'et had hce~,s to the :; initial
· . i i~al .owners(of_th~ ...... Prbpdsals.sincethebids-~r~ ~ .
grp...up of New.Jersey.~ Stuar.t}7'~ up by Wilson. He said the'Propo-%Ls''~:)...~ ., ~oI,,.
Roger~ Maggie and Para-:> would be"retUrned 9iew :.: ~ wettareomces,
.... . were named this' week" ~.! ' :'
theSecuri
., Commission. The ..
ged the frafidul'ent~
I million
oi clearly domin-
groul~ a~ defen-~e,
and bank issues
'o:-- show~
~ ~t on ~e
10,~ or
~e ~SE w~ ~
~.~ w~ ~f 11/'
:e .Short-term[
tv~ 9/~ ac-
T asury bil~ wer~ :.[ '
' · .WASHINGTON Gt~--The
811' ' The report said Conrail. which
· freight ~rviee in the Northea~ and'parts
. west. must undergo basic reerganJzatkn
Ill scope if it ia to have any hopes for e~mr, omi
· ' - It also mig~e~o~d that Conrail'etim!r,.a~tis
; ~ ;~ '~v..'.. . $2.1billionoffederalmoneyoverthene~f;,=-
' ~'~ ' ~ ~':'~rh~ futm-e ~ill require new
partnerships" if Com'ail is
~ ' ;J~" ' chairman of the U.S. Railway
Corn-ail s financing by st4, te ami
well as increased involvemer~ by 1
·" :? determining Conrairs future~ . '
3..ba' ~oinLs. to- '- i:.. . ~. . The assodation report, whichasmzmed~--
c-'vn from ZC040 been m%~l for pm'pasea unrelated to the investment in-
~ ~ench francs, .; tere~ in the CATV systems. The company also must
:.t~0Swi~s,~. appohat an advisory conm~ttee~ of five inve-~.or:ff to,
~, 208.70 Japanese · among other things, ex~m/ine and l-eview the acca~mt-
~?'"50, and 1.q0T2 lng, Ema.mSal and operating controls involved L'~ cper-a-
~ ~mfroml.20~. ' tionoftheCATV's3~,ems..,.: "> .-.. ' - ·-> ..... ' --
major expansion in the healLh care field
'.: new progranS, mad
.utitute division."':
.: ~' l~Su~averTrade FmLt~ l,,as-estab
:=..d rose in New'ti' The defendanta ~clude Cable/Tel Corp. and'Cable/ eenterinLosAngele~at2410~.vertY_~.,Yd-
from $221132. In' Tel Systems Corp., Six Star Cable-'is/on Holding Co. ....
.*Tose to $2.32425 (Lh, e holding company of all of the frmnchises), Cable '-' -I-'awren~e Live"'m0re
· r; Promotlonalnc.(thepromoterofthesystems),SLxStar :.more, h_a~...aw:al.Led.:~a..__~!;ml~/~.~'
'..J in japan az~-~.:'? Cablevision Cor~u-uction Co. (which con.rutted all of.-- Ntet~en.r~cxets ,~,
Tokyo, 209.55yen, .~; the sgrstem~), and Sb: Star Cablevision 1912m, agement - the $42 million Adv2n0~d
~:~,2durt, ZCO02., Corp.(whichmm-.~gedthesystem~), .' -- ... [.)'m~..!~sou..th~s:Oe ~: -...: ..,:~.
!¢, dorm fmrn,: '~MI of the compan!es and Harrla and Skuls!-.,y s/gned ' ~'N.w, ~ibs4h".-~dat~
ia Swim francs,.': consent decree~ The other defendants did not and face . ternat/onal 6xecutive search 'firm,
.~ Pad,2, 4.6325 trial, according to Stephen L. Hammerman, administra- ~tate~Inc.,NewEngl,ara:l:
:.nwn from 4.68Z~ .torofLheNewYorkre¢onalSECoffice. ' . -."7; .' and willbe known as.
DuU:h guilders, .~ Harris signed a c~nsent decree tn 1976 in Which he .. cording to N. W. Gibson,
and Milan, 946. ~:. alum agreed not to sell unreg4_stered stock. That case was ".. officer et' the newly formed c,m~,.., ;.~-"h
..-:om95a ' ....... :.;:cal/edSEOvs. ROTEXInterna~ona/Inc. 'C.7'¢ ¢ .... 'teramLoaAng~es-?~-~i:
;,s to Dxscnss Fife With Shareholders
o : · ' ' "' .7:; . : '...... ' ' : . .. i,....~,, r4' /'-.-..-:p .~.<-'.rt?.i:..'2f-~.'.~:q-'~
to discuss hhese ,%? PoIloc~ a: lawjer, ~d Nevada / .whose management Is Ln aIegal
,:dng."__:.,.,,; .:, .. ~law is one o! the meat !~ for al-,.: .~ with rmancte~ Kirk Ke-ltortan. '
"''
..... · ~., ~. ,. s ( tu! ceaLb..acd,:m'i_ mnd.conte~.de~..':'L;:;;~;.t.-~.,`` ?~:ent" """ ' .... '-:'* ''
:.z ........;.7-.. _.& ;,._._.,4,...__;_._ '___. _.~;_..: ..... :__' ................ - ....... · ,._ L .'
'" in SEC Stpck Charg&
S~ Star Nielson Cablevision,
." Which akeady owns a cable tele~Z'
sion franchl.e in Ms ~ngeles ad is
involv~ in bi~ for four othea, Said
~ursday iL h~ no affiEation'~5~.
the .S~ St~ cable firms accused
earlier this week by the 8eduritie~'
and ~change Comm~ssion o[ frau ....
who~ s~ned consent decr~ w,th-
out admitting or deny*~ ~legaBons
~. yes.rs *n the ~s ~ngeles cable
~.:. The three ~nvestors, 8tu~t C.
H~rris of Fa~rla~; N.J., Roger Hi
.Skulsky of Gold Spring V~ley,
2.-N.Y., own half of ~ S~ Nielson,
2which in turn ii involved., ih' joint
ventures wi~ local businesses in
~e effort ~ wm the'remmmng c;ty
'cable franchises from the ~s~-
~-f'The 'financi~ '6rrangem~h~ iff
the L.A. frankhises:ar~.entirely ~f-:
fer~nt" said an assistant to 'a 'city
c6ufi~ilman. "bht I thin~ (h~- SEC
~ ~s going to ~au~the fiounc~ ~
l~k more closely'at the S~ S~'
.. The SEC:complaint'hg~nst'~-
"ble/Tel Co~; and 21 affi~htes w~
'based on actiohs allegedly.~en by
'th~ defendan~ in 1~77 and 1978 ~
lng the ~elling ~[' the inve~tmehB)o~
SOl~-tfiese~ s
..Gre~ter Scrutiny Likely~
: :- But Six Star is likely to come un-
. der greater scrutiny in Los Angeles,'
"i. ' i~part bc, eau~6 the ~EU alleged that
~ ,~.-.Harris, Maggie, and Skulsky diveri-',
..~ :'- ~;~ ow~us~.~ ::". ~ ...~ .'~ ';~::-'
, :-'., ,'~-''41' :~." ie~'s that ..have'plagued cable
~ ~_ :: ' assistanti~d.,.~ :,: :~ , :-; '.,"'
' ~: ~ ~: Dburis.insisted~ih~X'neither S~'
'" of i~ Mnhates had
- i. St~ nor any .......
:' q ~ d0~e'anything wron~ and thai'the
- ' .,.~" .' - ~efg~dants who a~eed ~ the con..
?.: ~..~ '-~en~ de6ree did bo J'tb'hvoid a pro'-.
" '- -: ;" tract~legalstruggle.'We Want t~s:
.,~:, '~ cloud removed as quickly as
: "' ble Uecause ~(,~ are bidding, for
! e t franchises all acro~.the country..
' ~5 :' / ~' , ~'~ --' .~ty Coun~l ~sid~nt John per-.
:' ~ ~. :.~ ~-, ~ ' '~o,' according to ~n aid~,
:~ -' :~ ~;' ~' ' t0'"~k';~he city's" Departmentr 0f til
' -' .-',:-' .~ , Transportahon to prep~e a re~rt-'~':
'-':., '- . '~ ~ [ ' ~ranch~s~ ~ as. aw~ded j M J~'.[:
~: ~,.- · [~. "~ "" 1~9, and S~ Star is cwrentlfcom/'l'
t_ :- ' ~-. ~ pl~tmg construction of the system,
:.: ,., . which covers an area that includes,.
;: .- '*' ".~ T~e: requesi ' ~rom ;Ferraro;'_,
. ,' .~'.: ;; however, is not ~recfly related
,[': l~'~.'. ~ :~ the SEC complaint bfit to a~efi~n~
the council on bother.
- the p~op~ed ~a~s: fol
~able service.: [../?~-:~':/'[,
· [. - S~ Stalls one of ~igh't bidd~'f~
' ':2" t~e p~tenti~l] lucrativ~ East
~ ' Fe/na~do' Valley[ franchife... It
for~ed a comply ~alled Sg St~.''-
~ablevision of LOS'
[. ,AssociatSs Inc., ~'hich is" 89%'
~" owned by S~ Star Nielson. ' --,' -'f'. · ' '_Ih the bid S~.'St~ 'h~s 'a
' .~a~tbe'c m Bdrt Bo'~6kma~n, a ~
.~erhando Wiley 'au~ dealer.:.h f~
bi. for 'three other franchises--the.
' ~uthfcentral areaj Bo~le Heights,
, . ~d, Wilmin~on--SM S~ is a
- p~tner m a ]omt vent~e with the.
~ndfit~-con~oll~ U~vers~ Ca-'
'ble 'Systems Ltd..'of ~s' Angel8s,
::(which 0~ns 'the oiler 60% of
':~afious ~filfates, twb ot~er 'cabl9
~uth~ru .California, S~
S~. Cable~qsion of Iflglew~ ~d
S~St~ ~blev~ion of Pomonm
. ...c: ,.- .... ..) · ,..' ..~..'....~. . . '