South Bay : Cable Sale Prompts Suit
El Segundo has filed suit against Westinghouse Electric Corp. over the sale of its Group W Cable Inc., to a consortium of five cable firms, but officials in three other South Bay cities are still attempting to reach a settlement to avoid litigation with Westinghouse.
El Segundo alleges in its suit, filed July 3 in Los Angeles Superior Court, that Westinghouse violated its franchise agreement with the city when it included the city’s system in the June 19 sale without the city’s approval. The suit calls the action “fraudulent, malicious and oppressive.”
The suit charges that Westinghouse further violated the agreement by failing to properly maintain and operate the city’s system. The city is seeking to revoke the sale and $10 million in punitive damages.
El Segundo Mayor Jack Siadek said the city will continue to look into the possibility of acquiring its cable system through eminent domain.
Meanwhile, negotiations for a settlement are continuing with Torrance, Hawthorne and Lawndale, which also claim that Westinghouse violated their franchise agreements.
Officials in those cities said the discussions are centering around how the systems would be managed until a permanent operator is approved. Century Communications Corp., one of the five buyers and the firm that wants to be the permanent operator of those South Bay systems, had begun to take over the systems on June 20 as interim operator, but the cities objected.
City officials fear that Century, which a cable consultant said has large debts, will reduce services and raise rates.
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