RESPONSE LETTER
August 28, 2006
Via
EDGAR
Julia E.
Griffith
Special Council
Office of Mergers and Acquisitions
United States Securities and Exchange Commission
Washington, D.C. 20549-0303
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Re: |
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Charter Communications, Inc.
Schedule TO-T and Schedule TO-T/A
Filed by CCHC, LLC; CCH II, LLC; and CCH II Capital Corp.
File Number 005-57191 |
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Charter Communications, Inc.; CCH II, LLC; and CCH II Capital Corp
Registration Statement on Form S-4
File Number 333-129871 |
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Form 425s attaching press releases dated August 11, 2006
Filed on August 11, 2006 |
Dear
Ms. Griffith:
Reference is made to your letter, dated August 25, 2006 (the Comment Letter) setting forth
the comments of the staff of the Division of Corporation Finance (the Staff) of the Securities
and Exchange Commission (the Commission), with respect
to: (i) the Registration Statement on Form
S-4 (the Form S-4) (Registration No. 333-129871) of Charter Communications, Inc. (Charter), CCH
II, LLC (CCH II), and CCH II Capital Corp. (CCH II Capital), (ii) the Schedule TO-T, as amended
(the Schedule TO) (File No. 005-57191) filed by CCHC, LLC (CCHC), CCH II and CCH II Capital and (iii) the Form 425s attaching press releases dated August 11, 2006.
The headings and numbered paragraphs in this response letter correspond to the original
headings and numbered paragraphs in the Comment Letter. For ease of reference, we have repeated
the Staffs comments in bold text preceding each of the responses.
Press
Releases dated August 11, 2006
1. |
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We note that your August 11 press releases refer to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The safe harbor
provisions of the Act do not apply to statements made in connection with a tender offer. See Section
21E(b)(2)(C) of the Securities Exchange Act of 1934. Please do not
refer to the safe |
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harbor provisions of the Private Securities Litigation Reform Act of 1995 in future press releases
or other offer materials, or make clear that its safe harbor provisions do not apply to statements
made in connection with a tender offer. |
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In response to the Staffs comment we will not refer to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 in future press releases or other offer materials,
or, in the alternative, we will make clear that its safe harbor provisions do not apply to
statements made in connection with a tender offer. |
Schedule TO
General
Incorporation by Reference
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We note that your Schedule TO incorporates by reference to the Exchange Offer Prospectus filed
with the registration statement on Form S-4. The table of contents in the prospectus indicates that
the section Incorporation by Reference will appear on page i, but there is no discussion of
incorporation by reference on that page. Please revise or advise. |
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The Form S-4 has been revised
in response to the Staffs comment. Please see page i. |
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See the last comment above. Please avoid double incorporation by reference where you
incorporate into the Schedule TO information from the prospectus which is in turn incorporated by
reference into the prospectus from other filings. See
Rule 12b-23(b) under the Exchange Act. |
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The Form S-4 has been revised in response to the Staffs comment 2 above. As a result, no
documents are incorporated by reference into the Form S-4.
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Forward Looking Statements
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Refer to General Instruction C to Schedule TO. That Instruction requires you to provide
disclosure regarding certain control persons of a named bidder, including the disclosure required
by Items 3 and 5-8 of Schedule TO as to such control persons individually. Please confirm that you
have provided all such required disclosure as to Mr. Allen and all other persons or entities
controlling Charter, CCH II and CCO Holdings. |
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We confirm that we have provided all disclosure required by Items 3 and 5-8 of Schedule TO as
to Mr. Allen and all other persons or entities controlling
Charter and its subsidiaries. |
Exchange Offer Prospectus
General
5. |
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Tell us what consideration you have given to providing a background section to explain the
context of the decision to undertake this offer and the events
leading up to it. |
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We do not believe a typical background section is relevant to an investors decision to tender the
Convertible Notes. Although this is technically a third-party tender offer, each of the Offerors
is controlled by the subject company. However, we do agree that investors would benefit from an
understanding of our on-going efforts to improve our liquidity. As a result, in response to this
Comment 5, and in partial response to Comment 7, we have revised the Form S-4 to include a section
that specifically discusses these historical transactions and provides context for the timing of
this transaction and the Private Exchange Offers. Please see the revised disclosure under the
headings Summary The Exchange Offer on page 6 and Background of the Exchange Offer on page 140. |
Forward Looking Statements, page iv
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Your statement that you are under no duty or obligation to update or revise any of the
forward-looking statements after the date of this Exchange Offer Prospectus... appears to conflict
with Rule 14d-3(b)(1), which requires you to amend your Schedule TO in the event of any material
change. It is also potentially inconsistent with your statement at the bottom of page ii that you
intend to revise the information previously provided to Holders if it changes materially. Please revise the disclosure to clarify
your obligation. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Forward-Looking Statement on page iv.
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Summary,
page 1
Recent Events, page 1
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Revise this section to provide all of the disclosure required by Item 1005(b) of Regulation M-A,
including all of the events leading up to the Exchange Offer and the Private Exchange Offers. You
should also include a brief explanation of the relationship (if any) of the Settlement Agreement to
this transaction, with cross references to a full explanation elsewhere in the Offer to Exchange.
Are the notes being exchanged to facilitate compliance with the Settlement Agreement? Is this
transaction part of a long term restructuring? |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Summary Recent
Events beginning on page 1. There is no relationship between the
Settlement Agreement and this transaction. The transaction is part of
the Companys on-going management of its liquidity and debt,
as a result, the Form S-4 has been revised in response to the Staffs comment. Please see the
revised disclosure under the heading Background of the Exchange
Offer on page 140. |
8. |
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See the last comment above. Explain the relationship (if any) between the Exchange Offer, the
Private Exchange Offers, and the CCHC contribution to CCH I, including why these actions are
being conducted concurrently. Your expanded disclosure should explain the participation of Mr.
Allens affiliates in the Private Exchange Offers and should note whether there are other
participants. |
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There is no relationship between the Exchange Offer and the Private Exchange Offers. We have
revised the disclosure relating to CCHCs contribution to CCH I to explain its relationship with
the Private Exchange Offers. Please see the revised disclosure under Summary Recent Events beginning on page 1.
As requested, the disclosure has been revised to explain the participation of Mr. Allens
affiliates in the Private Exchange Offers. Please see the revised disclosure under the heading
Summary Recent Events beginning on page 1. |
9. |
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Provide a more complete description of the Optional Settlement Procedure in the Summary section,
including the mechanics of satisfying the return obligation. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Summary on page
7. |
Purpose
of the Exchange Offer, page 2
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In the appropriate part of the prospectus, explain why you do not intend to cancel the
Convertible Notes tendered in the Exchange Offer. What is the reason for this part of the offer
structure? |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the headings Risk Factors on pages 23 and 24 and Questions and Answers About the
Exchange Offer on page 47. |
The
Exchange Offer, page 5
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Include a brief description of the accounting treatment of the Exchange Offer, or explain why
you do not believe this information is material in the context of this transaction. See Item
1004(a)(xi) of regulation M-A. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the headings Summary on page 6 and Description of the Exchange offer on page
142. |
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We note your description of the terms of the CCH II Notes beginning on page 8. In the Summary
section, highlight briefly the material differences between those securities and the Convertible
Notes for which you are tendering. It may be helpful to present this information in bullet point
format. See Item 1004(a)(x) of Regulation M-A. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Summary on page
10. |
Withdrawal
and Revocation Rights, page 6
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Include disclosure that Holders may also withdraw tendered securities if not yet accepted for
payment at any time after the sixtieth day after this Exchange
Offer commenced. See Section 14(d)(5) of the Exchange Act and page 144
of the prospectus. |
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The Form S-4
has been revised in response to the Staffs comment Please see the revised
disclosure under the heading Summary on page
6. |
Risks
to Tendering Holders of Convertible Notes, page 23
The Offerors cannot issue the securities offered as part of the Exchange Offer until
after the registration statement...., page 29
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The disclosure in this section is confusing because, as you know, the
Registration Statement must be declared effective before the Exchange Offer expires.
Given this requirement, and the existence of back-end withdrawal rights as
provided in Section 14(d)(5) of the Exchange Act, it is unclear how Holders could
lose the ability to withdraw their tendered Convertible Notes for any meaningful
period after the Expiration Date. If the Registration Statement had not been
declared effective by the time the Exchange Offer expired, it would seemingly fail,
resulting in the prompt return of tendered securities. Please revise
or advise. |
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The Form S-4
has been revised in response to the Staffs comment by deleting the risk factor entitled: The Offerors cannot issue the securities offered as part of
this Exchange Offer until after the registration statement including Exchange Offer Prospectus is
declared effective. Please see page
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Questions
and Answers about the Exchange Offer, page 43
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See page 141 of the prospectus. Disclose here that you may make future
purchases of Convertible Notes after the Exchange Offer. Explain your current intent
with respect to future purchases after the Exchange Offer. If your intent is
different depending on whether the Exchange Offer is fully subscribed, please
describe. Provide a similar statement as to current intent on page 141 of the
prospectus under Purchases of Convertible Notes. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the headings Questions and Answers About the Exchange Offer on page 47 and
Description of the Exchange Offer on page 142. Please note that our intent with respect to
future purchases after the Exchange Offer is not different depending on whether the Exchange Offer
is fully subscribed. |
Determination
of Validity, page 144
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In this section, you indicate that the Offerors reserve the right to
waive any conditions of tender as to particular Convertible Notes. While it may be
acceptable to waive defects or irregularities of tender as to specific tendering
Holders, the conditions to the Exchange Offer must be uniform for all Convertible
Notes. Please revise this language accordingly. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Description of the Exchange Offer Determination of Validity on
page 145. |
Conditions
to the Exchange Offer, page 145
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We believe that a tender offer may be conditioned on a variety of events
and circumstances, provided that they are not within the direct or indirect control
of the bidder, and are drafted with sufficient specificity to allow for objective
verification that the conditions have been satisfied. In this regard, please revise
the first paragraph to exclude actions or omissions to act by the bidders in
connection with the relevant contracts as a reason for the assertion
of a condition. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Description of the Exchange Offer Conditions to the Exchange
Offer on page 147. |
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Mandating that a condition be satisfied in the Offerors sole
judgment is equivalent |
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to a waiver of such condition, since the Offerors are effectively free to rely on the condition to
terminate the Exchange Offer under virtually any circumstance. Please revise the condition set
forth in (5) on page 146 to include a reasonableness
standard. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Description of the Exchange Offer Conditions to the Exchange
Offer on page 147. |
Where
you can find more information, page 311
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The reference to Rule 13e-4 here appears to be a
typographical error. Please revise. |
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The Form S-4 has been revised in response to the Staffs comment. Please see the revised
disclosure under the heading Where You Can Find More Information on page 312. |
***
The undersigned, on behalf of Charter, CCHC, CCH II and CCH II Capital (the Filing Persons),
hereby acknowledges that: (i) the Filing Persons are responsible for the adequacy and accuracy of
the disclosure in the filing; (ii) Staff comments or changes to disclosure in response to Staff
comments do not foreclose the Commission from taking any action with respect to the filing; and
(iii) the Filing Persons may not assert Staff comments and the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.
***
Please address all notices and orders regarding this letter and enclosed materials to Dennis
J. Friedman, Esq. of Gibson, Dunn & Crutcher LLC, as counsel for the Company, by telephone at
212-351-3900 and by fax at 212-351-6201.
Very truly yours,
/s/ Kevin D. Howard
Kevin D. Howard
Vice President and
Chief Accounting Officer
of Charter Communications, Inc,
CCH II, LLC & CCH II Capital Corp.