New effort to save Voom - Board did not meet on 3/31

hypokondriak

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Oct 1, 2004
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New effort to save Voom
Charles Dolan moves to shrink Cablevision's board and oust 3 more who ordered him to shut satellite service

BY HARRY BERKOWITZ
STAFF WRITER

April 1, 2005

Cablevision Systems chairman Charles Dolan plans to oust three more directors who had ordered him to shut the Voom satellite TV service that he is trying to rescue, the company disclosed yesterday.

The disclosure came on the same day that the board's interim agreement to extend the life of Voom expired. The satellite venture's uncertain fate has sparked an enormous feud between Dolan and his chief executive son, James, who wants to kill it.

Despite the agreement's expiration, the board did not meet yesterday to resolve the three months of turmoil. The company did not say whether the board would meet today.

On Monday, in an extraordinary action that defied the board, Dolan asked the Federal Communications Commission to block Cablevision's deal to sell Voom's sole satellite to EchoStar Communications for $200 million - a deal signed by James Dolan in January. Charles Dolan also personally pledged $400 million to resuscitate Voom.

If Voom is not immediately ordered shut, the planned further shakeup of the board could give Charles Dolan greater sway in determining the satellite service's fate, possibly enough to force Cablevision to hand Voom over to him.

But without the satellite that is being sold to EchoStar, which is not willing to alter the deal, it is not clear how Dolan could keep Voom operating, and analysts do not expect the FCC to side with Dolan.

Dolan and his son Tom, Voom's chief executive, have refused to shut the service, which has attracted only 40,000 subscribers, had $661million in losses last year and is given little chance of success by analysts and several board members.

The Cablevision disclosure included a letter written by Dolan to the board on Tuesday, informing directors that he plans to reduce from six to three the number of them who are approved by public shareholders - rather than by him - at an April 18 meeting. All six public-shareholder directors were among those who had ordered Voom shut.

Dolan said the six current public-shareholder directors would nominate three for the new board. He had indicated earlier that he would exercise his right to name 75 percent of the board.

Dolan's plan would shrink the board from 15 to 12 members - nine chosen and approved directly by him and three approved by public shareholders.

Early last month, Dolan ousted three board members who had ordered Voom shut and hand-picked five new ones: son-in-law Brian Sweeney, who is Cablevision's senior vice president for e-media; Liberty Media chairman John Malone; former Viacom chief Frank Biondi; former ITT chairman Rand Araskog; and cable pioneer Leonard Tow.

In the new letter, Dolan said he believes the four outside executives would qualify under New York Stock Exchange and Securities and Exchange Commission "independence" requirements to serve on the board's audit and compensation committees.

The current members of those committees are public-shareholder directors Victor Oristano, who signed a letter early last month warning Dolan to stop soliciting new Voom subscribers; former New York State economic development director Vincent Tese; former Chase Securities managing director Thomas Reifenheiser; and Vice Adm. John Ryan. Regent Capital Management chairman Richard Hochman and law firm partner Charles Ferris are the other public-shareholder directors.
 
hypokondriak said:
Dolan said the six current public-shareholder directors would nominate three for the new board. He had indicated earlier that he would exercise his right to name 75 percent of the board.
Wow! Not only are three heads going to roll, but C. Dolan is turning this into 'Cablevision Survivor' where Board Members battle it out and do the dirty work. This guy is a genius IMO!

Facts:
- 75% of the board will be placed by C. Dolan
- 75% of the board can be replaced (fired) by C. Dolan
- C. Dolan will once again control the company

What does this mean?
- James Dolan's role, once again, will be that of a puppet head
- The new board will reach an agreement to spin-off/sell Rainbow assets (perhaps Rainbow Media assets as well) to VOOM HD LLC.
- The new board may move to rescind the sale of Rainbow DBS assets to EchoStar.
- The legal climate may make for some interesting partnerships.
- Sale of Cablevision, Rainbow Media, etc? Your guess is as good as mine!
 
niceprophet said:
Maybe we all died and went to PURGATORY... Sure feels like it.
We're pretty much in limbo until C. Dolan can place the new board members later this month. I'm pretty sure J. Dolan has been given the warning order, "Attempt to shutdown VOOM and I'll remove you from your position as Cablevision CEO."

And yes, we are in VOOM Purgatory...just hope we're not there too much longer. We shall see!!!
 
riffjim4069 said:
What does this mean?
- James Dolan's role, once again, will be that of a puppet head
- The new board will reach an agreement to spin-off/sell Rainbow assets (perhaps Rainbow Media assets as well) to VOOM HD LLC.
- The new board may move to rescind the sale of Rainbow DBS assets to EchoStar.
- The legal climate may make for some interesting partnerships.
- Sale of Cablevision, Rainbow Media, etc? Your guess is as good as mine!

Can you explain how the Cablevision Board can legally rescind the sale of Rainbow DBS assets to Echostar? Is this just wishful thinking or do you have some legal rationale? If rescinding the sale is possible, why would Charles Dolan waste his time with the comments to the FCC?
 
what a "dick".........if you don't play my way I'll take my toys and go home..."crybaby"
 
rocatman said:
Can you explain how the Cablevision Board can legally rescind the sale of Rainbow DBS assets to Echostar? Is this just wishful thinking or do you have some legal rationale? If rescinding the sale is possible, why would Charles Dolan waste his time with the comments to the FCC?

Here is the SATELLITE SALE AGREEMENT between Rainbow DBS Company LLC and EchoStar Satellite L.L.C.

http://www.sec.gov/Archives/edgar/data/1053112/000104746905006818/a2153426zex-10_45.htm
 
rocatman said:
Can you explain how the Cablevision Board can legally rescind the sale of Rainbow DBS assets to Echostar? Is this just wishful thinking or do you have some legal rationale? If rescinding the sale is possible, why would Charles Dolan waste his time with the comments to the FCC?

I don't know that CVC can "rescind" the sale of the satellite without being in breach of the agreement. The only exception would be if the FCC does not approve of the transfer of the licenses, which does trigger a termination of the agreement. They can, however, purposefully breach the contract and tell E* "nevermind", subjecting CVC to breach of contract claims and litigation by E*.

It may be that the value of the satellite is greater to Charles than the potential exposure for a breach of the contract with E*. In other words, if Charles believes that the Satellite is worth >$200 million to his company, and his attorneys estimate that Voom HD LLC and/or CVC will potentially owe E* something less than $200 million if they breach the agreement, a breach of the contract may be a smart business decision due the unique nature of that satellite (especially in the short term).
 
rocatman said:
Can you explain how the Cablevision Board can legally rescind the sale of Rainbow DBS assets to Echostar? Is this just wishful thinking or do you have some legal rationale? If rescinding the sale is possible, why would Charles Dolan waste his time with the comments to the FCC?
This is not wishful thinking since I believe all contracts should be honored...I am merely pointing out some actions the new board MAY entertain in this soap opera known as Cablevision/VOOM.

Unfortunately, Corporate America breaks contracts all the time...just look at how many corporate lawyers are kept gamefully employed. If Cablevision were to rescind the sale of Rainbow DBS assets (they certainly can do so since they are the rightful owners and no money has changed hands) then EchoStar is free to sue for damages. Of course, there would be a prolonged legal battle, E* would have to publicly outline their planned use of Rainbow DBS assets, and demonstrate how Cablevision's actions have impacted them financially. As I recall, Charlie Ergen and E* representatives have publicly stated [back in February] they had no plans to use Rainbow-1 at that time and were waiting for FCC approval.

Again, if the FCC approves the sale/transfer of the 61.5 licenses then Cablevision should honor their contract with E*. We shall see what happens.
 
ssmaniac said:
I don't know that CVC can "rescind" the sale of the satellite without being in breach of the agreement. The only exception would be if the FCC does not approve of the transfer of the licenses, which does trigger a termination of the agreement. They can, however, purposefully breach the contract and tell E* "nevermind", subjecting CVC to breach of contract claims and litigation by E*.

It may be that the value of the satellite is greater to Charles than the potential exposure for a breach of the contract with E*. In other words, if Charles believes that the Satellite is worth >$200 million to his company, and his attorneys estimate that Voom HD LLC and/or CVC will potentially owe E* something less than $200 million if they breach the agreement, a breach of the contract may be a smart business decision due the unique nature of that satellite (especially in the short term).

A deliberate breach of the contract (that Charles Dolan may have already done) may be grounds for punitive damages as well that could result in very large damage awards in excess of the amount of the contract.
 
punitive damages????

You mean like anxiety and pain and suffering ??? ROFLMAO. Charlie Ergan, suffering? ha ha ha.
 
rocatman said:
A deliberate breach of the contract (that Charles Dolan may have already done) may be grounds for punitive damages as well that could result in very large damage awards in excess of the amount of the contract.


Yeah that's what I am betting we may very well see.

Seems ole Chucky may be going off the deep end after all on this one.

I am for Voom making it and have always hoped they would but if they continue on this road it can only end up being a prolonged death and not survival at all.

Doesn't seem like Chuck cares one bit about anything but keeping his last hora alive, not the stockholders, not his family, not his Cablevision so what makes me think he will care about his customers?
My take on it is that he Doesn't care one bit about the customers he has now, they are just there to keep his pet alive at the moment. At his age this will probably be his last child.

Hmmm what to do, maybe if they add more programing and an HD DVR I will jump onboard if the price is right, hey why not if Chuck will be handing out party favors till the big hora is over and the bankroll used up.
 
Chuck doesn't move one inch without a bevy of lawyers involved. That is how he got as rich as he was. He told the lawyers what he wanted to do and asked them to find a way for him to do it. simple as that.
 
gutter said:
Chuck doesn't move one inch without a bevy of lawyers involved. That is how he got as rich as he was. He told the lawyers what he wanted to do and asked them to find a way for him to do it. simple as that.


Actually I disagree Gutter, at the point in his life that Chuck is I believe he could care less about what any lawyers think. He is closing in on the end game and has lots of money to blow doing it.
 
Don Landis said:
punitive damages????

You mean like anxiety and pain and suffering ??? ROFLMAO. Charlie Ergan, suffering? ha ha ha.

You obviously do not understand what punitive damages are. Punitive damages are where the defendant’s conduct is found to be intentional or willful or wanton or malicious, the courts may permit an award of punitive damages in addition to compensatory damages. Punitive damages are intended to punish the defendant and to discourage the conduct of the type the defendant engaged in. Unless there was something redacted in the satellite sales agreement, it appears that Charles Dolan intentional breached provisions of the agreement between Cablevision and Echostar by filing comments to the FCC. Based on your comment of "ROFLMAO", I guess ignorance is bliss but now you are no longer ignorant regarding punitive damages. Sorry if I ruined your fun.
 
rocatman said:
You obviously do not understand what punitive damages are. Punitive damages are where the defendant’s conduct is found to be intentional or willful or wanton or malicious, the courts may permit an award of punitive damages in addition to compensatory damages. Punitive damages are intended to punish the defendant and to discourage the conduct of the type the defendant engaged in. Unless there was something redacted in the satellite sales agreement, it appears that Charles Dolan intentional breached provisions of the agreement between Cablevision and Echostar by filing comments to the FCC. Based on your comment of "ROFLMAO", I guess ignorance is bliss but now you are no longer ignorant regarding punitive damages. Sorry if I ruined your fun.

Generally speaking, however, punitive damages are not available as a remedy in straight breach of contract cases, even if admittedly intentional. The contract may have "liquidated damages" provided for in the redacted sections, which would be a predetermined amount of damages in the event of a breach, but this is unlikely. E* no doubt would be entitled to compensatory damages, which may be substantial.

Punitive damages ARE generally available if E* can establish an intentional (willful, wanton, malicious) tortious interference with a business relationship, which is a tort claim (like negligence, libel or slander) as opposed to contractual claim.
 

Voom promises of 50 channels, price reduction, etc

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