CommuniCom Cable TV, the problem-plagued Culver City firm that filed for protection under federal bankruptcy laws in February, has won federal court approval for up to $10 million in emergency loans to keep it operating through June, 1986.
Bankruptcy Court Judge Richard Mednick in Los Angeles authorized the loans Monday as part of the third and most important step toward saving Los Angeles' largest cable franchise holder, whose 47,000 subscribers are concentrated largely in Culver City and West Los Angeles. The company also serves Maywood and portions of downtown Los Angeles and is expanding into Bellflower.
Approval for the loans came on the heels of two earlier court actions that gave CommuniCom authority to borrow $4.9 million to operate through the end of this month. CommuniCom's request for bankruptcy protection listed nearly 250 creditors and debts exceeding $165 million.
"This is a very big step for us," Richard E. Matthews, the company's newly appointed chief executive officer, said after Monday's court action. Matthews called the one-year loan plan a vote of confidence in the company's proposed reorganization.
Using the court-approved loans, he said, the company plans to continue improving its complaint-handling procedures, to provide additional training for service technicians and to install new equipment to bolster the system's signal strength. "We're well on our way to a successful recovery," Matthews said.
Since beginning construction of the system several years ago, CommuniCom has been the most heavily criticized of Los Angeles' 14 cable television franchises, said Susan Herman, general manager of the city's Communications Department. The company has faced complaints over everything from slow installation to overlapping television signals.
In one recent letter to the company, for example, a Marina del Rey resident complained that he could hear a baseball game while watching a movie. He had to schedule three appointments before a repairman showed up to correct the problem, he said.
CommuniCom officials have blamed many of their problems on poor management and unforeseen circumstances, including high interest rates, a slowdown in the demand for cable television and difficulty in wiring the system into the Westside's numerous apartment complexes.
Better Complaint Service
Matthews, a specialist in resurrecting troubled companies, took over as chief executive officer as part of a court-approved action in April. The 52-year-old executive, who is being paid $20,000 a month plus a $100,000 bonus if he can save the company, described the firm's present position as a "get-our-act-together mode."
He said the company has expanded its service department to handle more calls and designed new procedures so that a single official will be able to handle more than one kind of problem. That will prevent customers from having to be transferred from one department to another to find satisfaction, he said.
In addition, Matthews said, the company will unveil $250,000 in new transmitting equipment by early July, improving the signal quality sent to West Los Angeles, Culver City and most of the company's other franchise areas, including Maywood and Bellflower. Additional improvements are being made along ground-level transmission lines, which are being electronically tested for adequacy, and in customers' homes, where new subscribers and some current customers will be receiving better converter boxes, Matthews said.
Decline in Complaints
Herman said CommuniCom's initial efforts to improve the system have resulted in a noticeable decrease in the number of complaints received by Los Angeles, although the city has yet to compile its quarterly complaint reports. CommuniCom, which has traditionally topped the city's complaint list, still leads other companies but by a smaller margin, she said.
Since April, the company has added 400 to 800 subscribers per month, Matthews said, and expects to increase the number when it renews efforts to market the system in July. The company expects to hire additional technicians to accommodate new subscribers, he said.
"A lot of things are coming together for us," Matthews said.
Private banks that supported CommuniCom's loan requests Monday are being protected under bankruptcy laws that establish them as the firm's primary creditors. If the company were to fail, its capital assets would be used to pay off the banks.