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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)
December 27, 1996
Commission File Number 0-26928
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THE PROVIDENCE JOURNAL COMPANY
(Exact name of registrent as specified in its charter)
DELAWARE 05-0481996
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
75 Fountain Street, Providence, RI 02902-9985
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (401) 277-7000
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Item 5. Other Events
Litigation Update.
The "Company" referred to below means "The Providence Journal Company".
On January 17, 1995, Cable LP I, Inc. ("Cable LP") brought a declaratory
judgment action against Providence Journal Company ("Old PJC"), Colony
Communications Inc. ("Colony") and Dynamic Cablevision Inc. ("Dynamic") in the
Circuit Court of the Eleventh Judicial Circuit in and for Dade County, Florida.
Colony was a cable television subsidiary of Old PJC, which was transferred to
Continental Cablevision, Inc. ("Continental") in connection with the Agreement
and Plan of Merger between Old PJC, Continental, and the Company dated November
18, 1994 as amended and restated as of August 1, 1995 (the "Continental Merger
Agreement"). This case relates to the Dynamic Partnership, in which Dynamic is
the general partner with an 89.8% interest and Cable LP is the limited partner
with a 10.2% interest. In this action, Cable LP claimed that (i) Dynamic was
obligated to offer to sell Dynamic's general partnership interest to Cable LP
before Old PJC entered into the Continental Merger Agreement and (ii) Dynamic's
offer to purchase Cable LP's limited partnership interest for $13.1 million
triggered a right of first refusal entitling Cable LP to purchase Dynamic's
general partnership interest for $115 million. Cable LP sought a declaration by
the court that the right of first refusal it asserted applies.
A motion to strike allegations of bad faith and breach of fiduciary duty against
Old PJC, Colony and Dynamic was granted by the court, and an answer to the
Complaint and a Counterclaim was filed by Old PJC, Colony and Dynamic on March
16, 1995, seeking a declaratory judgment that Cable LP unreasonably refused
consent to the transfer of Dynamic's general partnership interest to Continental
and that a purported transfer of Cable LP's interest in the Dynamic Partnership
to a partnership to be managed by Adelphia Communications, Inc. violates
Dynamic's right of first refusal under the Dynamic partnership agreement. The
case was tried in December 1995. A final declaratory judgment in this action in
favor of Cable LP was entered on May 21, 1996. Such judgment required, among
other matters, Dynamic and Colony to negotiate with Cable LP on a price to
transfer Dynamic's general partnership interest to Cable LP. The Company
appealed this judgment and moved to stay the effect of the judgment during the
pendency of the appeal. On June 10, 1996, a hearing was held on the Company's
motion to stay. At such hearing, the judge declined to grant or deny the
Company's motion to stay at that time.
In the event that, as a result of such litigation, Dynamic was required to sell
its interest in the Dynamic Partnership to Cable LP, the Continental Merger
Agreement provided that Providence Journal would pay to Continental
simultaneously with the closing of such sale an amount equal to the sum of (i)
the amount (if any) by which the consideration received by Dynamic for the sale
of such interest was less than $115 million plus(ii) the taxes which would have
been payable assuming the purchase price for such interest equaled $115
million. On December 27, 1996, the Company settled this obligation in full with
Continental for $25 million. Consequently, the Company recorded a charge to
stockholders' equity in the fourth quarter of 1996 to reflect the decrease in
the net proceeds received form the disposal of the cable assets in 1995 pursuant
to the Continental Merger Agreement. Such payment was funded by borrowings under
the Company's revolving credit facility. Following such payment, all parties in
the above mentioned litigation stipulated for and were granted a voluntary
dismissal with prejudice of all claims before the Circuit Court of the Eleventh
Judicial Circuit in and for Dade County, Florida on December 27, 1996.
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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 thereunto duly authorized.
Dated: January 10, 1997
THE PROVIDENCE JOURNAL COMPANY
By: /s/ John L. Hammond
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John L. Hammond
Vice President-General Counsel and Chief Administrative Officer
