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Black Investors Settle Baltimore Cable TV Set-Aside Dispute

February 17, 1990

BALTIMORE (AP) _ Two black investors, who claimed a cable television company failed to live up to a minority set-aside clause in its agreement with the city, have agreed to a settlement that could be worth $100 million.

United Cable Television Corp. of Baltimore agreed to the settlement Monday, midway through a trial brought by the two investors.

The plaintiffs contended that the cable company blocked them and other minority investors from obtaining a 25 percent ownership interest in the franchise as required by the special set-aside provision of the original franchise won from the city.

The two investors, Clarence Elder, a Baltimore businessman, and O. Patrick Scott, a Prince George’s County public school art teacher, will receive an immediate $8.7 million lump-sum payment.

In addition, United Cable will transfer to them more than 2,100 units, or shares, in United’s investment partnership that underwrites the cable system.

Those units, in addition to 311 they already own, could be worth up to $92.3 million by 1995 if Scott and Elder decide to sell them that year, according to court estimates cited by attorneys for Scott and Elder.

United Cable officials put the total settlement figure at about $50 million.

By whatever measure, ″the result is a great one,″ said Stephen Snyder, chief attorney for Scott and Elder.

Under the settlement, approved by Baltimore Circuit Judge Hilary Caplan, Snyder’s Baltimore law firm, Snyder, Mehlman and Wais, will receive 40 percent of the cash and stock paid out to Scott and Elder.

In agreeing to the settlement, United Cable acknowledged no wrongdoing.

″It was a business dispute, and that’s the way we looked at it from the beginning,″ said John Neal, a vice president of United Artists Entertainment Co., the Denver-based parent of United Cable.

Elder and Scott claimed in their lawsuit that United Cable resorted to various subterfuges to limit minority ownership interest in the franchise to about 3.5 percent, rather than the 25 percent required by the city.

Neal said the ownership issue was ″clouded″ by varying interpretations of the franchise agreement and by ″the inability (of black investors) to raise the money in the full amount for their 25 percent interest.″

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