Cablevision's Credibility Gap Grows

But the Dolan family hasn't turned over the shares, and Bear hasn't asked, the family's lawyer says. He says the deal has a collar that means the family won't be responsible for covering the stock's decline over the intervening years. At recent prices, the shares pledged under the Dolan forward sale are worth around $80 million less than what the family received from Bear Stearns.

Personal loans to industry fat cats were common during the freewheeling late '90s. Extending personal loans to executives became popular during the boom era as a way of staying in a company's good graces and firmly on the deal gravy train. Cablevision is a big client of Bear Stearns. It was only after the bust came that these arrangements started to be questioned.

Bear Stearns representatives declined to comment on the status of the forward sale. Bear reps and Cablevision both say the deal has no effect on Cablevision's current financial situation.

Asked on the conference call if the personal loan had any bearing on the breached credit agreement, CEO Jim Dolan replied with a terse "no."

Cablevision stock hit a low for the year Monday on word of the dividend-killing credit breach. The shares were down 9 cents to $23.06 at midday Tuesday.

Given Cablevision's failed venture into consumer electronics with The Wiz; the costly and jettisoned Voom satellite TV fiasco; the failed bid to take the company private; and now the broken dividend promise, investors aren't exactly enjoying the ride.

One analyst gave the company demerits for its sloppy management. In a research note Monday, Prudential Equity Group analyst Kathy Styponias said she was cutting her Cablevision discounted cash flow valuation by 25% "to reflect management's unpredictable nature."

"This latest news causes us to question the internal control structure and oversight functions at the company," Styponias writes in the report. Styponias has a neutral rating on the stock. Prudential Equity Group makes a market for Cablevision shares.