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SEC Filings

S-4
RENAISSANCE MEDIA GROUP LLC filed this Form S-4 on 06/12/1998
Entire Document
 
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CONTROL BY THE MORGAN STANLEY ENTITIES; CONFLICTS OF INTEREST
 
  The Morgan Stanley Entities, each of which is an affiliate of Morgan
Stanley, beneficially own 87.6% and Time Warner beneficially owns 8.8% of the
outstanding equity of Holdings. The Guarantor, the Obligors and Renaissance
Media are directly or indirectly wholly owned by Holdings. Currently, three of
the seven members of the Board of Representatives of Holdings are Managing
Directors of Morgan Stanley. The Morgan Stanley Entities and the Management
Investors each have the right to appoint three Representatives (only one of
whom shall have the right to vote) to the Board of Holdings. Time Warner has
the right to appoint one Representative to the Board of Holdings.
Representatives who have the right to vote shall have the right to cast votes
which are proportional to the respective equity ownership interests in
Holdings of the entities which appointed them. See "Management" and "Certain
Relationships and Related Transactions."
 
  As a result of their ownership interest in Holdings, the Morgan Stanley
Entities control the management policies of the Company and matters requiring
securityholder approval. See "Principal Securityholders." Certain decisions
concerning the operations or financial structure of the Company may present
conflicts of interest between the Morgan Stanley Entities and the holders of
the Notes. For example, if the Company encounters financial difficulties or is
unable to pay its debts as they mature, the interests of the Morgan Stanley
Entities may conflict with those of the holders of Notes. In addition, the
Morgan Stanley Entities may have an interest in pursuing acquisitions,
divestitures, financings or other transactions that, in their judgment, could
enhance their equity investment in the Company, even though such transactions
might involve increased risk to the holders of the Notes.
 
  The employment and related agreements of the Management Investors permit the
Management Investors to own or manage other cable television systems after
2001, although the Management Investors are obligated to first offer
acquisition opportunities to the Morgan Stanley Entities. In the event that
the Management Investors acquire or manage other cable television systems, the
competing claims on their time and energy could divert their attention from
the affairs of the Company.
 
  Time Warner and its affiliates currently operate cable television systems
and have significant investments in such systems. Time Warner has invested in
the past, and may invest in the future, in other entities engaged in the
operation of cable television systems or in related businesses (including
entities engaged in business in areas in which the Company operates). As a
result, Time Warner or its affiliates may compete with the Company for
acquisition targets. Time Warner has, and may develop, relationships with
businesses that are or may be competitive with the Company. Conflicts may also
arise in the negotiation or enforcement of arrangements entered into by the
Company and Time Warner or entities in which Time Warner has an interest. In
addition, Time Warner has no obligation to bring to the Company any investment
or business opportunities of which it becomes aware, even if such
opportunities are within the scope and objectives of the Company.
 
  MSSF, an affiliate of the Placement Agent and the Morgan Stanley Entities,
is the syndication agent and arranger under the Senior Credit Facility. In
connection with such services, MSSF will receive customary fees and be
reimbursed for expenses.
 
ABSENCE OF PUBLIC MARKET; RESTRICTIONS ON RESALES
 
  There presently is no active trading market for the Notes and none may
develop. If the Notes are traded after their initial issuance, they may trade
at a discount from their initial offering price, depending upon prevailing
interest rates, the market for similar securities, the financial condition and
prospects of the Obligors and the Guarantor and other factors beyond the
control of the Obligors and the Guarantor, including general economic
conditions. Although Morgan Stanley has informed the Company that it currently
intends to make a market in the Old Notes and the New Notes, Morgan Stanley is
not obligated to do so and any market-making may be discontinued at any time
without notice, at its sole discretion. Accordingly, there can be no assurance
as to the development or liquidity of any market for the Notes. If Morgan
Stanley conducts any market-making
 
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