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Ventura Cable Service Files for Chapter 11

Avenue TV officials say its 8,600 Channel 6 subscribers should not be affected.

August 12, 2003|Sandra Murillo | Times Staff Writer

A Ventura cable television station has filed for Chapter 11 bankruptcy protection to guard its assets and prevent disruption of service to thousands of local subscribers.

The move shields Avenue TV Cable Service Inc., a family owned business in operation since 1951, from creditors and allows the company to stay in business under court supervision while it develops a plan to deal with mounting bills.

"We want to make sure that people know service will not be interrupted," said Pam Drake, director of marketing. "The goal is to do this in a way that doesn't affect the subscribers."

Avenue officials, who filed Friday for bankruptcy restructuring, said that the company's outstanding debts stem largely from a recent $5-million fiber optic upgrade and left them with no other options.

"We just had a series of extreme costs we weren't anticipating," Drake said.

The fiber optic project took longer to finish than expected and cost the company about $1 million more than anticipated, Drake said.

"Over the years the cable TV industry has grown, evolved and become enormously competitive," said General Manager Stephen George in a written statement. "We've done our best to continually upgrade our technology."

In addition, substantial franchise fees paid to the city and increasing fees to cable networks contributed to the company's financial hardships, George said.

According to court documents filed by attorneys for City National Bank last month, Avenue TV defaulted on a $4.5-million loan due in March.

Citing ongoing discussions with lenders, Drake would not comment on the City National Bank matter.

Avenue TV, located on Main Street in midtown Ventura, employs about 17 people and serves 8,600 subscribers in the western portion of Ventura and segments of La Conchita and Casita Springs on Channel 6.

Its current cable franchise agreement with the city of Ventura does not expire until Jan. 31, 2011, said Andrew Powers of the city's marketing and public affairs division.

The city's attorneys are reviewing its contract with Avenue TV to determine the effect of the bankruptcy filing.

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