GROUP W CABLE ASSOCIATES OF CHICAGO, 10-Q, 1995-11-14

GROUP W CABLE ASSOCIATES OF CHICAGO
10-Q, 1995-11-14
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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

-------------------

FORM 10-Q

-------------

[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1995

[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ___________ to
___________

Commission file number: 0-13539

GROUP W CABLE ASSOCIATES OF CHICAGO
- ---------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)

ILLINOIS 36-3295765
- -------------------------------- --------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) No.)

One Research Drive, Shelton, CT 06484
(203) 926-4000
- ---------------------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area Code
of Registrant's Principal Executive Offices)

N/A
- ---------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [x] No [_]

The number of shares outstanding of each of the issuer's classes of common
stock as of the latest practicable date: N/A
<PAGE>

<PAGE>

GROUP W CABLE ASSOCIATES OF CHICAGO

INDEX TO ITEMS

FORM 10-Q

PAGE
----

PART I. FINANCIAL INFORMATION
------------------------------
ITEM 1. Financial Statements . . . . . . . . . . . . . . . 1
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Discontinued Operations . 10

PART II. OTHER INFORMATION
-----------------------------
ITEM 1. Legal Proceedings . . . . . . . . . . . . . . . . 11
ITEM 2. Changes in Securities . . . . . . . . . . . . . . 15
ITEM 3. Defaults upon Senior Securities . . . . . . . . . 15
ITEM 4. Submission of Matters to a Vote of the Limited
Partners . . . . . . . . . . . . . . . . . . . . . 15
ITEM 5. Other Information . . . . . . . . . . . . . . . . 15
ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . 15

<PAGE>

PART I. FINANCIAL INFORMATION
------------------------------

ITEM 1. FINANCIAL STATEMENTS

GROUP W CABLE ASSOCIATES OF CHICAGO
-----------------------------------
(IN LIQUIDATION)

CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(DOLLARS IN THOUSANDS)
(UNAUDITED)

Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------

1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income (Loss) from $ $ $ $
discontinued operations - - - -
Interest income 7 23 22 95
---------- ---------- --------- ----------

Net Income (Loss) $ 7 $ 23 $ 22 $ 95
========== ========== ========= ==========

Income (Loss) Allocation
to General Partner - - - -
========== ========== ========= ==========

Income (Loss) Allocation
per Limited Partner Unit $ 0.01 $ 0.04 $ 0.03 $ 0.15
========== ========== ========= ==========

Limited Partnership Units
authorized and outstanding 633.333 633.333 633.333 633.333
========== ========== ========= ==========

<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>

<PAGE>

GROUP W CABLE ASSOCIATES OF CHICAGO
-----------------------------------
(IN LIQUIDATION)
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
--------------------------
(DOLLARS IN THOUSANDS)

Assets September 30, 1995 December 31, 1994
------ ------------------ -----------------
(Unaudited)
<S> <C> <C>

Cash and cash equivalents $ 35 $ 114
Funds restricted by management
for indemnification obligations
(Note 4) 0 0
-------- --------
Total Assets $ 35 $ 114
======== ========

Liabilities and Partners' Equity
--------------------------------
Accounts payable, accrued expenses
and other liabilities $ 35 $ 114
Contingencies (Note 4) - -
-------- --------
Partners' equity (deficit)
General Partner 0 0
Limited Partner (633-1/3 units
authorized and outstanding) 0 0
-------- --------
Total Partners' Equity 0 0
-------- --------
Total liabilities and Partners'
equity $ 35 $ 114
======== ========
<FN>
See accompanying notes to the consolidated financial statements.

</TABLE>
<PAGE>

<PAGE>

GROUP W CABLE ASSOCIATES OF CHICAGO
-----------------------------------
(IN LIQUIDATION)

CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(DOLLARS IN THOUSANDS)
(UNAUDITED)

For the nine months ended September 30,
------------------------------------------------

1995 1994
---- ----
<S> <C> <C>
Cash flows from:
Net income (loss) $ 22 $ 95
Adjustments:
Loss (gain) on Sale - -
Depreciation and amortization - -
Net change in other assets and
liabilities (101) -
Capital expenditures, net - -
Cash flow related to Sale:
Proceeds from Sale - -
Funds restricted by management for
potential Illinois state income
tax liability - -
Cash distribution to partners 0 (94)
Funds restricted by management for
indemnification obligations - -
Funds withdrawn from (deposited in)
Escrow - -
----- -----

Increase (decrease) in cash (79) 1
------ ------
Cash, beginning of period 114 94
------ ------
Cash, end of period $ 35 $ 95
====== ======

<FN>
See accompanying notes to the consolidated financial statements.

</TABLE>
<PAGE>

<PAGE>

GROUP W CABLE ASSOCIATES OF CHICAGO
-----------------------------------
(IN LIQUIDATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1995
------------------

NOTE 1 - GENERAL:
----------------
The consolidated financial statements of Group W Cable Associates of
Chicago include the financial results of Group W Cable Associates of
North Central Chicago and Group W Cable Associates of North West
Chicago (collectively, the "Operating Partnerships") and Group W Cable
Associates of Chicago (the "Partnership"). Group W Cable of Chicago,
Inc., a wholly-owned subsidiary of Westinghouse Electric Corporation
("Westinghouse"), is the general partner of the Partnership (the
"General Partner"). Westinghouse is also the parent of Westinghouse
Cable, Inc. (the "Manager"), which was the manager of the Systems (as
defined below). During January 1990, Westinghouse contributed to the
General Partner its 228-2/3 units of limited partnership interests in
the Partnership ("Units"), representing 36.1% of the total 633-1/3
Units issued and outstanding.

The Partnership is an Illinois limited partnership formed on
December 23, 1983 to own a general partnership interest in, and serve
as a general partner of, the Operating Partnerships. The limited
partnership interests in the Operating Partnerships were held by
certain individuals and entities (the "Local Investors"). The
Operating Partnerships were established to construct, own and operate
cable television systems (the "Systems") in the City of Chicago (the
"City") under 15-year non-exclusive franchises granted by the City
(the "Franchise Agreement").

In the opinion of the management, the accompanying unaudited financial
statements include all adjustments necessary for a presentation in
conformity with generally accepted accounting principles.

NOTE 2 - SALE OF OPERATIONS:
---------------------------
On May 16, 1989, the General Partner, on behalf of the Operating
Partnerships, signed a definitive Asset Purchase Agreement (as amended
on October 30, 1989, and subsequently amended, the "Purchase
Agreement") with Prime Cable of Chicago, Inc. ("Prime") for the sale
of substantially all of the business, properties and assets of the
Operating Partnerships to Prime (the "Sale"). On December 14, 1989,
the consent of the Partnership's limited
<PAGE>

<PAGE>

partners (the "Limited Partners") was obtained. On June 27, 1990, the
Partnership received the final required approval from the City of
Chicago with respect to the assignment of the Franchise Agreements to
Prime, and on June 28, 1990 (the "Closing Date"), the Sale was consum-
mated.

Total proceeds obtained from the Sale aggregated approximately $213
million on the Closing Date. Additionally, as required by the
Partnership Agreement, the General Partner, in the event of a sale of
the Systems, was required to contribute $802,000 to the Partnership,
which equaled 1/99 of the aggregate capital contributions of all the
Limited Partners. Of this amount, $291,000 had been recorded as a
capital contribution prior to 1990 and the remaining $511,000 was
recorded as a 1990 capital contribution.

Subsequent to the Sale, the General Partner purchased all of the
limited partnership interests of the Local Investors in the Operating
Partnerships.

Pursuant to the Purchase Agreement, the Partnership deposited $5
million of the proceeds from the Sale into two escrow accounts to
provide for the indemnification of Prime for breaches, if any, of
representations, warranties and covenants under the Purchase Agreement
and related documents. In late March 1991, Prime formally made claims
totaling a maximum of approximately $5.1 million against the two
escrow accounts that were established at the time of the Sale.
Included in Prime's assertions against the escrow accounts was a claim
arising from a dispute between the Operating Partnerships and Prime
concerning certain post-closing adjustments to the purchase price
relating to the amount of working capital and number of subscribers
existing on June 28, 1990, the closing date of the Sale. Following a
careful review of Prime's claims, the General Partner negotiated a
settlement with Prime wherein, on July 17, 1991, Prime received a
total of $2.2 million from the two escrows (the "Prime Settlement") in
exchange for its releasing the Operating Partnerships, the
Partnership, the General Partner, the Limited Partners and others from
all claims that it has asserted, and substantially all claims that it
could assert that are related to the Sale.

On July 17, 1991, as part of the aforementioned settlement with Prime,
the two escrow accounts were terminated and the funds remaining in the
two escrow accounts following payment of the Prime Settlement to
Prime, were deposited in the Partnership's general operating account
from which a distribution of $2.9 million was made to the partners
during August of 1991.
<PAGE>

<PAGE>

After the payment of outstanding amounts owing to banks, Westinghouse
and certain other debts of the Partnership, $40.7 million was
distributed to the partners during July 1990. An additional
$6.8 million was distributed to the partners during 1991, and
distributions, primarily consisting of accrued interest earned on the
amounts restricted by management for indemnification obligations, in
the amounts of $436,000 and $136,000 were made to the partners in
April 1992 and April 1993, respectively (see Note 4). On July 18,
1994, the Partnership distributed an aggregate of $4,370,826.38 to its
partners. Such distribution was made pursuant to the Settlement
Agreement and General Release, dated April 25, 1994, among the
Partnership, Westinghouse, Westinghouse Broadcasting Company, Inc.
("Westinghouse Broadcasting") and certain plaintiffs listed therein,
in connection with the civil action entitled Sullivan, et al. v. Group
---------------- -----
W Cable of Chicago, Inc., et al., Case No. 90 C 7260, filed in the
--------------------------------
United States District Court for the Northern District of Illinois.
This Settlement, which did not require the payment of Partnership
funds, resulted in the Partnership reversing a $4,183,000 previously
accrued liability. The Partnership retained approximately $300,000 in
respect of litigation expenses indemnified by the Partnership (see
Note 4) and the establishment of reserves for any additional fees,
costs and expenses relating to the winding up and liquidation of the
Partnership. Of the $300,000, there was approximately $35,000
remaining as of September 30, 1995, and it is not anticipated that
there will be any remaining funds for distribution after the payment
of expenses (see Note 4).

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
---------------------------------------------------
Principles of consolidation
---------------------------
All balances between the Partnership and the Operating Partnerships
have been eliminated in the consolidated financial statements.

Cash and cash equivalents
-------------------------
The Partnership considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.

NOTE 4 - CONTINGENCIES:
----------------------
In December 1990, certain of the Partnership's Limited Partners sued
the General Partner and others in the United States District Court for
the Northern District of Illinois (the "Federal Court") in an action
entitled Charles W. and Anne L. Sullivan, et al. v.

<PAGE>

Group W Cable Associates of Chicago, Inc., et al., No. 90 C 7260.
-------------------------------------------------
Included as defendants with the General Partner were Westinghouse
Broadcasting, Group W Cable, Inc., the Manager, Shearson Lehman Hutton
("Shearson") and Westinghouse (collectively, the "Defendants"). On
January 11, 1991, a First Amended Complaint was filed adding
additional Limited Partners as plaintiffs. Additionally, on May 17,
1991, other Limited Partners filed a second lawsuit in the United
States District Court for the Northern District of Illinois entitled
Eliot Dubowski, et al. v. Group W Cable Associates of Chicago, Inc.,
--------------------------------------------------------------------
et al., No. 91 C 3073, purportedly as a class action on behalf of all
------
the Partnership's Limited Partners. Pursuant to a motion filed by the
Defendants, the judge hearing the Sullivan action accepted
--------
reassignment of the Dubowski action as a related case. The Federal
--------
Court then stayed the Dubowski action while it considered the
--------
Defendants' motion to dismiss the Sullivan action.
--------

Both lawsuits alleged violations of various federal statutes,
including the Securities Act of 1933, the Securities Exchange Act of
1934 and the Racketeer Influenced and Corrupt Organizations Act and
violations of Illinois common law, including breach of fiduciary
duties, mismanagement and fraud, all allegedly arising out of the
initial offering of Partnership Units in 1984, the Sale of the
Operating Partnerships' assets in 1990, and the operation of the
Chicago cable television systems during the interim. Plaintiffs
sought substantial damages, including the amount of their funds
invested in the Partnership, the lost use of money invested,
consequential damages and, under certain circumstances, the trebling
of damages. The General Partner believes that the allegations made in
the two lawsuits are without merit and has contested them vigorously.

On September 3, 1991, the Federal Court dismissed the Sullivan action
--------
pursuant to a motion filed by the Defendants. The Federal Court held
that the allegations made in the Sullivan complaint failed to state
--------
causes of action under federal law. The Federal Court then dismissed
the alleged common law claims for lack of federal jurisdiction. As a
result of the Federal Court's dismissal of the Sullivan action, the
--------
plaintiffs in the Dubowski action moved to voluntarily dismiss their
--------
complaint. The Federal Court granted the Dubowski dismissal motion on
--------
October 11, 1991.

<PAGE>

Westinghouse Broadcasting Company, Inc. ("Westinghouse Broadcasting"),
the Manager, Westinghouse and Shearson (collectively, the "State Court
Defendants"). Shortly thereafter, plaintiffs filed a first amended
complaint which added additional plaintiffs.

The first amended complaint charged the State Court Defendants with
committing acts of fraud and breaches of fiduciary duties allegedly
arising out of the initial offering of Partnership Units in 1984, the
Sale of the Operating Partnerships' assets in 1990, and the operation
of the Chicago Cable television systems during the interim. The first
amended complaint sought substantial damages, including the return of
the funds invested in the Partnership, the lost use of money invested,
consequential and punitive damages and attorneys fees and costs. The
General Partner believes that the allegations made in the lawsuit are
without merit and has contested them vigorously.

On October 27, 1992, the Circuit Court of Cook County, Illinois (the
"Illinois Court"), struck the first amended complaint pursuant to a
motion filed by the State Court Defendants for failing to plead
sufficient facts to support the alleged causes of action for fraud and
breaches of fiduciary duty, and for failing to contain a plain and
concise statement of the alleged causes of action.

Thereafter, the plaintiffs filed a second amended complaint which
contained substantially the same allegations as the first amended
complaint. Pursuant to a motion to dismiss filed by the State Court
Defendants, on June 2, 1993 the Illinois Court entered an order
striking the second amended complaint as to all of the State Court
Defendants. The Illinois Court found that the second amended
complaint failed to allege sufficient facts to support a cause of
action for fraud against any defendant or a cause of action for breach
of fiduciary duties against any defendant other than the General
Partner. The Illinois Court found that the second amended complaint
sufficiently alleged a breach of fiduciary claim against the General
Partner and permitted plaintiffs to proceed with such a claim against
the General Partner in a future amended complaint. The Illinois Court
further ruled that plaintiffs could not reallege their fraud claims
against defendants, or their breach of fiduciary duty claims against
any defendant other than the General Partner, without first showing
that they had a reasonable basis for such claims and obtaining court
permission to include them in a complaint.

On July 16, 1993, plaintiffs filed a third amended complaint directed
against the General Partner alone and based solely on
<PAGE>

<PAGE>

alleged breaches of fiduciary duties. The General Partner believes
there is no factual basis for plaintiffs' allegations of breaches of
fiduciary duty, and has vigorously defended against this claim. In
addition, the General Partner believes that the third amended
complaint improperly contains allegations of fraud which the General
Partner believes were barred by the Illinois Court's order of June 2,
1993. The General Partner moved to strike these allegations. The
motion was heard on November 17, 1993, and the Court denied the motion
to strike. The General Partner thereafter filed an answer denying any
wrongdoing.

It is the opinion of the General Partner that, under the Partnership
Agreement and certain other agreements, the Partnership is required to
defend the General Partner, Westinghouse Broadcasting, Westinghouse
and the Manager, and may be required, under certain circumstances, to
defend Shearson and Goldman Sachs & Co., financial advisor and
investment banker to the Partnership, respectively. It is further the
opinion of the General Partner that, under certain circumstances, the
above-mentioned agreements require the Partnership to indemnify the
Defendants and Goldman Sachs & Co. from and against any and all
claims, liabilities, damages, losses, expenses, settlements or
judgments arising out of or in connection with the aforementioned
litigation of any nature whatsoever, including reasonable attorneys'
fees, except where attributable to the willful misconduct or bad faith
of the entity to be indemnified. The complaint filed by the
plaintiffs in the Sullivan lawsuit disputed the opinion of the General
--------
Partner. During the federal litigation, the Plaintiffs sought to
prevent the Partnership from reserving funds for defense and
indemnification costs based upon the Partnership's obligations dis-
cussed above. The Court found that such reservations were reasonable
and the plaintiffs appealed. On October 16, 1991, the United States
Court of Appeals for the Seventh Circuit granted the motion of
Defendants to dismiss the appeal on the ground of mootness given the
dismissal of the Sullivan action.
--------

The claims included in the Sullivan actions were resolved on April 25,
--------
1994 (the "Sullivan Settlement"). No Partnership funds were paid in
the Sullivan Settlement. The remaining Sullivan action was dismissed
with prejudice on May 13, 1994. The General Partner entered into the
Sullivan Settlement in light of the continued costs of further
litigation and because it believes the settlement to be in the best
interests of the Partnership and the partners. The Sullivan
Settlement resulted in the Partnership reversing a $4,183,000
previously accrued liability.

The Partnership distributed $4,370,826.38 to its partners on July 18,
1994. Such amount represented the Partnership's remaining
<PAGE>

<PAGE>

funds (other than approximately $300,000 which was retained in respect
of potential future litigation expenses and for the payment of fees,
costs and expenses relating to the winding up and liquidation of the
Partnership). Of the $300,000, there was approximately $35,000
remaining as of September 30, 1995, and it is not anticipated that
there will be any remaining funds for distribution after the payment
of expenses.

In late March 1991, Prime formally made claims totaling a maximum of
approximately $5.1 million against the two escrow accounts that were
established at the time of the Sale and funded in the aggregate amount
of $5.0 million. These escrow accounts were interest-bearing accounts
and were established to provide for the indemnification of Prime for
breaches by the Operating Partnerships of representations, warranties
and covenants in the asset purchase agreement and other related
documents. Included in Prime's assertions against the escrow accounts
was a claim arising from a dispute between the Operating Partnerships
and Prime concerning certain post-closing adjustments to the purchase
price relating to the amount of working capital and number of
subscribers existing on June 28, 1990, the closing date of the Sale.
Following a careful review of Prime's claims, the General Partner
negotiated a settlement with Prime wherein, on July 17, 1991, Prime
received a total of $2.2 million from the two escrows in exchange for
its releasing the Operating Partnerships, the Partnership, the General
Partner, the Limited Partners and others from all claims that it has
asserted, and substantially all claims that it could assert that are
related to the Sale. The two escrow accounts were subsequently
terminated and the funds remaining in these escrow accounts were
deposited in the Partnership's general operating account.

The Registrant is not currently party to nor is its property currently
the subject of any material pending legal proceedings.

NOTE 5 - TAXES:
--------------
The results of operations of the Partnership are taxable to the
partners of the Partnership and, accordingly, no provision for federal
income taxes is included in the accompanying financial statements.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF DISCONTINUED OPERATIONS

Results of Operations
---------------------
Interest income decreased from $23,000 for the quarter ended September
30, 1994 to $7,000 for the quarter ended September 30, 1995 and from
$95,000 for the nine months ended September 30, 1994 to $22,000 for
the nine months ended September 30, 1995. The decrease of $16,000 in
interest income for the quarter ended September 30, 1995 versus the
quarter ended September 30, 1994 and the decrease of $73,000 in
interest income for the nine months ended September 30, 1995 versus
the nine months ended September 30, 1994, was primarily attributable
to the decrease in cash and short-term investments as a result of
distributions to the Partners and the payment of fees, costs and
expenses relating to the winding up and liquidation of the
Partnership. Part II -- "Item I. Legal Proceedings" and in "Note 4 -
Contingencies" in the Notes to Consolidated Financial Statements.

Liquidity and Capital Resources
-------------------------------
The remaining Sale proceeds (together with interest earned thereon)
are available for the payment of liabilities and partner distributions
as determined by the Partnership Agreement. After providing for
accrued liquidation expenses, indemnification obligations and escrow
deposits, the Partnership distributed to the partners $40.7 million in
1990, $6.8 million in 1991, $436,000 in 1992, $136,000 in 1993 and,
pursuant to the Sullivan Settlement, $4,370,826.38 in 1994. See Part
II -- "Item 1. Legal Proceedings" and Notes to Consolidated Financial
Statements -- "Note 4 - Contingencies". The Partnership retained
approximately $300,000 in respect of potential future litigation
expenses and for the payment of fees, costs and expenses related to
the winding up and liquidation of the Partnership. Of the $300,000,
there was approximately $35,000 remaining as of September 30, 1995,
and it is not anticipated that there will be any remaining funds for
distribution after the payment of expenses. See Part II -- "Item 1.
Legal Proceedings" and Notes to Consolidated Financial Statements --
"Note 4 - Contingencies".

If the Partnership has insufficient funds to pay its remaining
liabilities, the General Partner believes that the return to the
Partnership of certain distributions made to Limited Partners from the
proceeds of the Sale could be required. With the exception of
interest income earned on the funds restricted by the Partnership to
satisfy its indemnification obligations, litigation expenses and the
costs and expenses of winding up and liquidating the Partnership,
including the costs of fulfilling its reporting obligations under
federal and state law and the Partnership Agreement, the Partnership
has no remaining funds presently available for distribution.
<PAGE>

<PAGE>

PART II. OTHER INFORMATION
-----------------------------

ITEM 1. LEGAL PROCEEDINGS

In December 1990, certain of the Partnership's Limited Partners sued
the General Partner and others in the United States District Court for
the Northern District of Illinois (the "Federal Court") in an action
entitled Charles W. and Anne L. Sullivan, et al. v. Group W Cable
--------------------------------------------------------
Associates of Chicago, Inc., et al., No. 90 C 7260. Included as
-----------------------------------
defendants with the General Partner were Westinghouse Broadcasting,
Group W Cable, Inc., the Manager, Shearson Lehman Hutton ("Shearson")
and Westinghouse (collectively, the "Defendants"). On January 11,
1991, a First Amended Complaint was filed adding additional Limited
Partners as plaintiffs. Additionally, on May 17, 1991, other Limited
Partners filed a second lawsuit in the United States District Court
for the Northern District of Illinois entitled Eliot Dubowski, et al.
----------------------
v. Group W Cable Associates of Chicago, Inc., et al., No. 91 C 3073,
----------------------------------------------------
purportedly as a class action on behalf of all the Partnership's
Limited Partners. Pursuant to a motion filed by the Defendants, the
judge hearing the Sullivan action accepted reassignment of the
--------
Dubowski action as a related case. The Federal Court then stayed the
--------
Dubowski action while it considered the Defendants' motion to dismiss
--------
the Sullivan action.
--------

<PAGE>

action moved to voluntarily dismiss their complaint. The Federal
Court granted the Dubowski dismissal motion on October 11, 1991.
--------

On December 27, 1991, substantially the same Limited Partners involved
in the now dismissed Sullivan lawsuit filed a new complaint against
--------
the General Partner and others in the Circuit Court of Cook County,
Illinois, Law Division (the "State Court"), in an action entitled
Charles W. and Anne L. Sullivan, et al. v. Group W Cable of Chicago,
--------------------------------------------------------------------
Inc., et al., No. 91 L 20896. Included as defendants with the General
------------
Partner were Group W Cable, Inc., Westinghouse Broadcasting Company,
Inc. ("Westinghouse Broadcasting"), the Manager, Westinghouse and
Shearson (collectively, the "State Court Defendants"). Shortly there-
after, plaintiffs filed a first amended complaint which added
additional plaintiffs.

<PAGE>

the General Partner in a future amended complaint. The Illinois Court
further ruled that plaintiffs could not reallege their fraud claims against
defendants, or their breach of fiduciary duty claims against any
defendant other than the General Partner, without first showing that
they had a reasonable basis for such claims and obtaining court
permission to include them in a complaint.

On July 16, 1993, plaintiffs filed a third amended complaint directed
against the General Partner alone and based solely on alleged breaches
of fiduciary duties. The General Partner believes there is no factual
basis for plaintiffs' allegations of breaches of fiduciary duty, and
has vigorously defended against this claim. In addition, the General
Partner believes that the third amended complaint improperly contains
allegations of fraud which the General Partner believes were barred by
the Illinois Court's order of June 2, 1993. The General Partner moved
to strike these allegations. The motion was heard on November 17,
1993, and the Court denied the motion to strike. The General Partner
thereafter filed an answer denying any wrongdoing.

The claims included in the Sullivan actions were resolved on April 25,
--------
1994 (the "Sullivan Settlement"). No Partnership funds

<PAGE>

were paid in the Sullivan Settlement. The remaining Sullivan action
was dismissed with prejudice on May 13, 1994. The General Partner
entered into the Sullivan Settlement in light of the continued costs
of further litigation and because it believes the settlement to be in
the best interests of the Partnership and the partners. The Sullivan
Settlement resulted in the Partnership reversing a $4,183,000
previously accrued liability.

The Partnership distributed $4,370,826.38 to its partners on July 18,
1994. Such amount represented the Partnership's remaining funds
(other than approximately $300,000 which was retained in respect of
potential future litigation expenses and for the payment of fees,
costs and expenses relating to the winding up and liquidation of the
Partnership). Of the $300,000, there was approximately $35,000
remaining as of September 30, 1995, and it is not anticipated that
there will be any remaining funds for distribution after the payment
of expenses.

The Registrant is not currently party to nor is its property currently
the subject of any material pending legal proceedings.

<PAGE>

ITEM 2. CHANGES IN SECURITIES.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE LIMITED PARTNERS.

No matters have been submitted during the nine months ended
September 30, 1995 to a vote of the Limited Partners.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a. Exhibits.

27 Financial Data Schedule

b. Reports on Form 8-K - None.

<PAGE>

SIGNATURE
---------

Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

GROUP W CABLE ASSOCIATES OF CHICAGO
by Group W Cable of Chicago, Inc.,
its general partner

By: /s/ Robert E. Buenting
------------------------------------
Robert E. Buenting
Vice President of Finance and Director
(Principal Financial Officer)

Date: November 14, 1995

<PAGE>

EXHIBIT INDEX

Exhibit Description
------- -----------
27 Financial Data Schedule

NYFS07...:\53\50953\0001\1196\FRMN085S.500

<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial
information extracted from the financial
statements contained in the body of the
accompanying Form 10-Q and is qualified in its
entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 35
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 35
<CURRENT-LIABILITIES> 35
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 35

<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 22
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 22
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22
<EPS-PRIMARY> 30.00
<EPS-DILUTED> 30.00

</TABLE>