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SEC Filings

CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/01/1999
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fair market values. The excess of the consideration paid over the estimated fair
market values of the net assets acquired was $12,940 and is being amortized
using the straight line method over 15 years.
     In July 1999, Avalon New England purchased all of the cable systems of
Taconic Technology Corporation for approximately $8,525 (excluding transaction
     Upon the closure of the Mercom merger, Mercom was dissolved as a separate
taxable entity which resulted in a change in tax status from a taxable entity to
a nontaxable entity. As a result, the Company recognized a tax benefit of $1,362
in its results of operations and eliminated its deferred taxes, net in the
balance sheet.
     In connection with the acquisition of Mercom, former shareholders of Mercom
holding approximately 731,894 Mercom common shares or approximately 15.3% of all
outstanding Mercom common shares gave notice of their election to exercise
appraisal rights as provided by Delaware law. On July 2, 1999, former
shareholders of Mercom holding 535,501 shares of Mercom common stock filed a
petition for appraisal of stock in the Court of Chancery in the State of
Delaware. With respect to 209,893 of the total number of shares for which the
Company received notice, the Company received the notice of election from
beneficial holders of Mercom common shares and not from holders of record. The
Company believes that the notice with respect to the 209,893 shares did not
comply with Delaware law and is ineffective. The Company cannot predict at this
time the effect of the elections to exercise appraisal rights on the Company
since the Company does not know the extent to which these former shareholders
will continue to pursue appraisal rights under Delaware law or choose to abandon
these efforts and accept the consideration payable in the Mercom merger. If
these former shareholders continue to pursue their appraisal rights and if a
Delaware court were to find that the fair value of the Mercom common shares,
exclusive of any element of value arising from our acquisition of Mercom,
exceeded $12.00 per share, the Company would have to pay the additional amount
for each Mercom common share to the appraisal subject to the appraisal
proceedings together with a fair rate of interest. The Company could be ordered
by the Delaware court to pay reasonable attorney's fees and the fees and
expenses of experts for the shareholders. In addition, the Company would have to
pay their own litigation costs. The Company have already provided for the
consideration of $12.00 per Mercom common share due under the terms of our
merger with Mercom with respect to these shares but have not provided for any
additional amounts or costs. The Company can provide no assurance as to what a
Delaware court would find in any appraisal proceeding or when this matter will
be resolved. Accordingly, the Company cannot assure you that the ultimate
outcome would not have a material adverse effect on the Company.
     The Company is subject to the provisions of the Cable Television Consumer
Protection and Competition Act of 1992, as amended, and the Telecommunications
Act of 1996. The Company has either settled challenges or accrued for
anticipated exposures related to rate regulation; however, there is no assurance
that there will not be further additional challenges to its rates.
     In the normal course of business, there are various legal proceedings
outstanding. In the opinion of management, these proceedings will not have a
material adverse effect on the financial condition or results of operations of
the Company.