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SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 07/22/1999
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management. Our business is substantially dependent upon the performance of
certain key individuals, including Mr. Unger and Mr. Cohen. Although we intend
to maintain a strong management team, the loss of the services of Mr. Unger or
Mr. Cohen could have a material adverse effect on us. Under the terms of his
employment agreement, Mr. Unger is permitted to engage in other business
activities in addition to his duties to our company. For additional
information, please refer to the "Management" section of this prospectus.
 
Our financial position may be adversely affected if we are responsible for
certain liabilities related to the separation of Cable Michigan from
Commonwealth Telephone Enterprises, Inc.
 
   Cable Michigan, Inc., which we acquired in November 1998, became a separate,
public company on September 30, 1997. Prior to that time, its operations were
part of Commonwealth Telephone Enterprises, Inc. Under the agreements governing
the separation of Cable Michigan from Commonwealth Telephone Enterprises, we
could be responsible for liabilities resulting from the joint operations of
Cable Michigan, Commonwealth Telephone Enterprises and RCN Corporation, which
was separated from Commonwealth Telephone Enterprises at the same time as Cable
Michigan, including liabilities related to taxes and employee benefits. If we
were so liable, it could have a material adverse effect on our financial
position.
 
Failure of our year 2000 efforts could adversely affect our results of
operations.
 
   We are in the process of reviewing our financial, administrative and
operational systems and analyzing 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. Our most reasonably likely worst case
Year 2000 scenario involves the complete failure of our third party billing and
customer support system. 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 costs we may incur or if
we will lose any subscribers due to interruptions in our customer support
system.
 
Your notes could be voided or subordinated to our other debt if the issuance of
the notes constituted a fraudulent conveyance.
 
   Under federal or state fraudulent transfer laws, if a court found that at
the time the issuers issued the old notes or the new notes, any of the issuers:
 
     (1) incurred the debt with the intent of hindering, delaying or
  defrauding current or future creditors; or
 
     (2) received less than fair consideration or reasonably equivalent value
  for incurring the debt and
 
    . was insolvent or was rendered insolvent by reason of the incurrence
      of the debt,
 
    . was engaged, or about to engage, in a business or transaction for
      which its remaining assets were unreasonably small or
 
    . intended to incur, believed or should have believed, it would incur
      debts beyond its ability to pay as the debts mature,
 
then, in each case, a court could void all or a portion of the issuer's
obligations to you as a holder of the new notes, or subordinate the issuer's
obligations to the holders to other debt of the issuer, as the case may be.
This result would entitle other creditors to be paid in full before any payment
could be made on your notes, and possibly allow other creditors to invalidate
your notes. In that event, we could not assure you that you would ever recover
any repayment on your notes.
 
   The definition of insolvency for purposes of the foregoing will vary
depending upon the law applied. Generally, however, an issuer would be
considered insolvent if:
 
  . the sum of its debts, including contingent liabilities, were greater than
    the fair saleable value of all of its assets; or
 
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