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SEC Filings

S-4
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4 on 04/01/1999
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  . obligations to purchase, or offer to purchase, the indebtedness
    thereunder, including the Senior Subordinated Notes.
 
   If a change of control occurs at a time when the Issuers are prohibited from
purchasing the new notes, the Issuers and their affiliates could seek the
consent of their lenders to purchase the new notes or could attempt to
refinance the borrowings that contain this prohibition. If the Issuers do not
obtain consent or repay the borrowings, the Issuers would remain prohibited
from purchasing the new notes. In this case, the Issuers' failure to purchase
tendered new notes would constitute an event of default under the indenture
governing the new notes. For additional information, please refer to the
"Description of the Notes" section of this prospectus.
 
Certain liabilities related to separation of Cable Michigan from Commonwealth
Telephone Enterprises, Inc. may adversely affect our business.
 
   On September 30, 1997, Commonwealth Telephone Enterprises, Inc. distributed
all of the outstanding common stock of Cable Michigan and RCN Corporation to
its shareholders. In connection with this distribution, Commonwealth Telephone
Enterprises, Inc., RCN Corporation and Cable Michigan executed a Distribution
Agreement and a Tax Sharing Agreement, each dated as of September 5, 1997. The
terms of the Distribution Agreement require Cable Michigan to indemnify
Commonwealth Telephone Enterprises, Inc. and RCN Corporation against certain
liabilities arising before or in connection with the distribution of the Cable
Michigan common stock. This includes indemnification by Cable Michigan for
liabilities related to Cable Michigan's business and a portion of the
liabilities relating to the combined operations of Cable Michigan, Commonwealth
Telephone Enterprises, Inc. and RCN Corporation, including the conduct of the
corporate overhead function by Commonwealth Telephone Enterprises, Inc.,
employee matters and employee benefit matters. Similarly, under the
Distribution Agreement, Commonwealth Telephone Enterprises, Inc. and RCN
Corporation must indemnify Cable Michigan against liabilities related to their
respective businesses and certain liabilities related to the prior joint
operation of Cable Michigan, Commonwealth Telephone Enterprises, Inc. and RCN
Corporation. The Tax Sharing Agreement provides for allocating certain taxes
among Cable Michigan, Commonwealth Telephone Enterprises, Inc. and RCN
Corporation, with each retaining taxes allocable to their respective
businesses.
 
   Although we do not believe that any of the liabilities arising under the
Distribution Agreement or the Tax Sharing Agreement or the combined operations
of Cable Michigan, Commonwealth Telephone Enterprises, Inc. and RCN Corporation
will have a material adverse effect on our business, our financial condition or
the results of our operations, we cannot assure you as to the extent of any of
these liabilities. In addition, if Commonwealth Telephone Enterprises, Inc. and
RCN Corporation were required to indemnify Cable Michigan, the assets of which
are now owned by Avalon Cable of Michigan LLC, for any of these liabilities, we
could not assure you whether Commonwealth Telephone Enterprises, Inc. and RCN
Corporation would fulfill any of their obligations to Cable Michigan under
either the Distribution Agreement or the Tax Sharing Agreement.
 
We may be adversely affected if our year 2000 efforts are not successful.
 
   The year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of our computer
programs with date-sensitive software may recognize a date using "00" as the
year to be 1900 rather than the year 2000. We have and will acquire certain
financial, administrative and operational systems. We are in the process of
reviewing our existing systems and intend to review each system that we acquire
to analyze the extent to which we face a year 2000 problem. We also are in the
process of reviewing systems provided to us by third parties, including billing
systems. Although we have not yet made a final determination, we believe that
any year 2000 problem, if it arises in the future, should not be material to
our liquidity, financial position or results of operations. However, we cannot
assure you as to the extent of any of these liabilities.
 
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