20060117final_order_no_29955.pdf

Office of the Secretary
Service Date
January 17 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
DIRECT COMMUNICATIONS ROCKLAND
INc. FOR AUTHORITY TO REISSUE CAPITAL )
STOCK IN THE AMOUNT OF 1 000,000 SHARES CASE NO. DCM-05-
ORDER NO. 29955
On December 20, 2005, Direct Communications Rockland, Inc. (Direct, Company)
filed an Application requesting authority to reissue its capital stock in the amount of 1 000 000
shares. Direct is currently authorized to issue, and has issued, 50 000 shares of common stock.
Currently 25 000 shares are issued to each of its shareholders, Leonard May and Marilyn May
(Shareholders). Direct requests authority to increase the total number of authorized shares to
000 000 consisting of 100 000 shares of voting stock and 900 000 shares of nonvoting stock.
The proposed transaction is for estate planning purposes. It does not currently alter the
ownership or financial status of Direct.
THE APPLICATION
The Application states that the Shareholders intend to convert each of their existing
000 shares of common stock to 5 000 shares of voting stock and 45 000 shares of nonvoting
shares for a total of 50 000 shares each. At that time the total number of issued shares of Direct
would be 100 000 shares consisting of 10 000 shares of voting stock and 90 000 shares of
nonvoting stock.
STAFF REVIEW
Staff recommended approval of Direct's Application. In addition, the Staff
recommended that Direct be directed to adopt the following reporting requirements:
(1) Provide a "Report of Securities Issued.
(2) Report the voting and nonvoting shares of stock issued annually and total
shares outstanding on an annual basis. This can be accomplished
expanding the detail Direct includes in the Capital Stock section of the
Annual Report (currently page 13) to include the required footnote
information for all capital stock issuances, not only those when stock is
sold.
ORDER NO. 29955
FINDINGS OF FACT
Direct was incorporated under Idaho law on March 7, 1973 and is engaged
principally in providing telecommunication services including local exchange service within the
state of Idaho.
Based on the representations in the Application, we find that Direct is currently
authorized to issue, and has issued, 50 000 shares of common stock, 25 000 to each of its two
shareholders, Leonard May and Marilyn May. We find that Direct proposes to reissue capital
stock in the amount of 1 000 000 shares that will consist of 100 000 voting shares and 900 000
nonvoting shares. After the number of authorized shares has been increased to 1 000 000 as
described above, the shareholders each intend to convert their existing 25 000 shares of common
stock to 5 000 shares of voting common stock and 45 000 shares of nonvoting common stock for
a total of 50 000 shares each.
Based on the representations in the Application, we further find that the reissuance of
said capital stock is for estate planning purposes.
No person has received or will receive from Direct any fee (1) for servIces In
connection with the issuance or sale of the above-referenced capital stock, other than fees for
legal, accounting or similar professional or technical services, or (2) for services to reissue the
capital stock.
The Company has paid the required fees required by Idaho Code ~ 61-905.
CONCLUSIONS OF LAW
Direct Communications is a telephone corporation within the definition of Idaho
Code ~ 61-121 and a public utility within the definition of Idaho Code ~ 61-129. The Idaho
Public Utilities Commission has jurisdiction over this matter pursuant to Title 61 , Idaho Code
Chapters 1 and 9, specifically Idaho Code ~~ 61-119, 61-129, 61-901 , and 61-902, and IDAPA
31.01.01.141-150.
After examining the Application and Staffs comments, the Commission finds that an
evidentiary hearing in this matter is not required and would serve no public purpose.
The Commission further finds that the Application requesting authority to reissue up
to 1 000 000 shares of capital stock should be granted. The purpose of the transaction is for
estate planning purposes.
ORDER NO. 29955
This general approval of the general purposes to which the proceeds will be put is
neither a finding of fact nor a conclusion of law that any particular program of the Company
which may be benefited by the approval of this Application has been considered or approved by
this Order, and this Order shall not be construed to that effect.
The issuance of this Order does not constitute agency determination/approval of the
type of financing or the related costs for ratemaking purposes, which determination the
Commission expressly reserves until the appropriate proceeding.
ORDER
IT IS HEREBY ORDERED that the Application of Direct Communications
Rockland, Inc. requesting authority to reissue its capital stock in the amount of 1 000 000 shares
consisting of 100 000 shares of voting stock and 900 000 shares of nonvoting stock is hereby
granted.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed
in connection with this Order shall be construed to obligate the State of Idaho to payor guarantee
in any manner whatsoever any security authorized, issued, assumed or guaranteed under the
provisions of this Order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, service, accounts, evaluation
estimates or determination of costs or any other matter which may come before the Commission
pursuant to its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that Direct Communications Rockland, Inc. shall file
the following as they become available:
1. A "Report of Securities Issued.
2. Verified copies of any agreement entered into in connection with the
Company s sales and issuances ofthe Shares.
IT IS FURTHER ORDERED that the Company shall also report the voting and
nonvoting shares of stock issued annually and total shares outstanding on an annual basis. This
can be accomplished by expanding the detail the Company includes in the Capital Stock section
of its Annual Report (currently page 13) to include the required footnote information for all
capital stock issuances, not only those when stock is sold.
ORDER NO. 29955
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of Direct's exhibits or other material accompanying this Application for any purpose
other than the issuance of this Order.
THIS IS A FINAL ORDER. Any person interested in the Order (or in issues decided
by this Order) may petition for reconsideration within twenty-one (21) days of the service date of
this Order with regard to any matter decided in this Order and in this case. Within seven (7) days
after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ ~ 61-626 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /71-/0..
day of January 2006.
\S\ Q/
~~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
O:DCM-05-
ORDER NO. 29955