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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: September 17, 1997
(Date of earliest event reported)
FALCON CLASSIC CABLE INCOME PROPERTIES, L.P.,
a California limited partnership
(Exact name of registrant as specified in its charter)
California Commission File: 95-4200409
(State or other jurisdiction 0-18266 (I.R.S. Employer
of incorporation or identification No.)
organization)
10900 Wilshire Boulevard, 15th Floor
Los Angeles, California 90024
(Address of principal executive offices, including zip code)
(310) 824-9990
(Registrant's phone number, including area code)
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Item 5. Other Events
On or about September 8, 1997, Madison Partnership
Liquidity Investors 36 , L.L.C. disseminated a letter stating its
interest in acquiring up to 3,522 units of limited partnership
interests in Falcon Classic Cable Income Properties, L.P. (the
"Registrant") for a price of $560 per unit. This offer was made
without the consent or involvement of the Registrant's General
Partner. The General Partner has considered this offer, concluded
that it is inadequate and, accordingly, recommended that limited
partners not accept the offer. Pursuant to Rule 14e-2 promulgated
under the Securities Exchange Act of 1934, as amended, this
recommendation and the General Partner's bases therefor were
conveyed to limited partners in a letter dated September 17, 1997
which is filed as an exhibit hereto and incorporated herein by
this reference.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
(c) Exhibits
5.1 Letter to Limited Partners dated September 17, 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.
a California limited partnership
By: Falcon Classic Cable Investors, L.P.
General Partner
By: Falcon Holding Group, L.P.
General Partner
By: Falcon Holding Group, Inc.
General Partner
Date: September 17, 1997. By: /s/ Michael K. Menerey
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Michael K. Menerey
Chief Financial Officer
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Sequentially
Numbered
Exhibit Description Page
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5.1 Letter to Limited 5
Partners dated
September 17, 1997
4
(Falcon Classic Letterhead)
September 17, 1997
Dear Limited Partner:
Falcon Classic Cable Income Properties, L.P. (the "Partnership") has
become aware that another unsolicited offer for up to approximately 3,522 units
(representing 4.9% of the outstanding units in the Partnership), at a price of
$560 per unit, was commenced by Madison Partnership Liquidity Investors 36,
L.L.C.
("Madison") in a letter dated September 8, 1997.
This offer was made without the consent or the involvement of the
General Partner.
One of the obligations of the General Partner is to endeavor to
preserve the status of the Partnership as a partnership under Federal income tax
laws. Failure to maintain this status could have a material adverse effect on
the Partnership and its partners. Among the related legal requirements imposed
upon the Partnership is that its partnership interests not be traded in an
established securities market. As it believes is customary, the Partnership
complies with this requirement by adhering to a safe harbor provision contained
in the Federal income tax regulations which limits most sales of limited
partnership interest to five percent of the outstanding units in any given year.
That limitation was reached during September 1997. Accordingly, no further
resales of units, including any attempted sales related to the Madison offer,
will be recognized by the Partnership for the balance of 1997.
Notwithstanding the fact that no further resales of limited partnership
interests may be made in 1997, we are required to furnish you with our position
with respect to the above offer. We have considered this offer and, based on the
information made available by Madison, believe that it is inadequate and not in
your best interest to accept. Accordingly, the General Partner's recommendation
is that you reject the Madison offer. We urge you not to sign the Agreement of
Assignment and Transfer Form and not tender your Units to Madison. In evaluating
the offer, the General Partner believes that its limited partners should
consider the following information:
By letter dated June 24, 1997, the Partnership advised its unitholders
that the General Partner intended to exercise its purchase right to acquire
all of the Partnership's cable systems pursuant to the Appraisal Process
for cash consideration equal to the median appraised value of $82.0 million
(the "Appraised Value"). The General Partner further advised the
Partnership that, as permitted by the Partnership Agreement, it intended
that the cable systems be acquired (the "Sale") by certain affiliates of
the General Partner (the "Purchasers"). On June 27, 1997, the General
Partner caused the Partnership to enter into an Asset Purchase Agreement
with the Purchasers, and the parties have begun to seek the necessary
regulatory and other consents.
Based upon the Appraised Value of $82.0 million and assuming a
hypothetical liquidation of the Partnership on June 30, 1997, the estimated
cash distribution to unitholders would have been approximately $877 per
limited partnership unit (the "Hypothetical Estimated Per Unit
Distribution") (based upon 71,879 units outstanding). This Hypothetical
Estimated Per Unit Distribution was calculated assuming net liabilities on
the balance sheet of the Partnership, net of current assets ("Net
Liabilities"), of approximately $18.4 million (as of June 30, 1997),
including the Partnership's outstanding bank indebtedness of $22.3 million
as of June 30, 1997. As with other liabilities, the Partnership's bank
indebtedness must be repaid prior to the payment of any liquidating
distribution to the partners. Such Hypothetical Estimated Per Unit
Distribution also assumes that the Net Liabilities as of June 30, 1997
represent the only payments, other than certain reserved expenses, that
would have been required to be made by the Partnership prior to the
distribution of cash to the unitholders. Accordingly, the Hypothetical
Estimated Per Unit Distribution is presented for illustrative purposes only
and does not necessarily represent amounts the Partnership could have
distributed to unitholders on June 30, 1997 or any date thereafter. The
actual distribution will vary depending on, among other things, the date of
the actual dissolution and related distribution to unitholders.
Based on this recent development, the General Partner recommends that
you NOT transfer, agree to transfer, or tender any units in response to the
Madison offer.
If you have any questions regarding these matters or your investment,
please call our Investor Services Department at (800) 433-4287. We will, of
course, keep you informed of significant events as they develop. We appreciate
the continued support and interest of our Unitholders.
Sincerely,
Falcon Classic Cable Income Properties, L.P.
A California Limited Partnership
cc: Account Representative
