Agenda Packets - 1996/09/06 - Laserfiche WebLink

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MEMORANDUM 0 August 9, 1996 Page 17 The Authority can assume that if US West does not have the financial resources available to it to close the transaction, the closing will not take place. Therefore, further scrutiny of the actual sale transaction has not been undertaken. However, of concern to the Authority is whether the resources of US West are available to the local franchise holder to comply with the franchise requirements of the Authority now and in the foreseeable future. Because the local franchises will apparently be held by a subsidiary of US West, inquiry was repeatedly made regarding the financial resources of the subsidiary. No such financial information was made available to this office in this analysis except to assert that the same resources available to Continental would also be available to the subsidiary. We have met with 41) representatives of US West and informed them that we would require a performance guaranty from US West, Inc. as the parent corporation. The performance guarantywould serve as a guaranty from US West that should the operating entities be unable to fulfill their franchise obligations, US West would assume responsibility for franchise compliance. US West has consented to offer such a corporate guaranty, attached hereto as Exhibit 5. If the Authorities choose to consent to this transfer, the transfer resolution will include a contingency that US West guaranty the performance of its subsidiaries as it relates to the individual franchises. Based upon our review of the information provided, it would appear that the Authority could not unreasonably withhold approval of the transfer based on the financial stability of US West, provided that US West agrees to comply with all local franchise requirements, as it has •done, and further that US West execute a guaranty of the performance of its subsidiaries.