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ration, performance of the franchise must be secured by <br />guarantees of the parent corporation "in form and substance <br />acceptable to city, . . .". in this case, North Central <br />states that the original-rantee, Group W Cable of the North <br />Suburbs, Inc., will remain in place as a subsidiary <br />corporate entity of a parent co6oratior., North Central. <br />The question before the Commission and the cities is <br />whether North Central's guarantee of the performance of the <br />franchise is "acceptable in form ,nd substance". if not <br />acceptable, the offering of an unacceptable guarantee would <br />be a violation of the franchise and more probably than not, <br />would be a reasonable basis for the withholding of approval <br />of the transfer. If not, the Commission and cities must de - <br />tide whether the guarantee of either Hauser or Continental <br />or bot:. .rould be acceptable. The question of the guarantee <br />is related to the amount of equity, the negative cash flows <br />in the first five years indentified for not only your <br />system, but also for the neighboring Group W systems and the <br />fact that the assets of the other systems are pledged as <br />security to the sank of Boston. Mr. Cattoor's report <br />addresses these factors more specifically. North Central <br />has stated that Hauser and Continental are reluctant to <br />guarantee the franchise based upon common industry practice <br />and the reluctance to show the guarantee as a liability on <br />the corporate books. The Commission should consider these <br />arguments in light of the perceived need for the guarantee. <br />-ls- <br />