8-K

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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                  ------------


                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



         Date of Report (Date of earliest event reported): March 3, 1998

                  Falcon Classic Cable Income Properties, L.P.
             (Exact Name of Registrant as Specified in its Charter)



         California                 000-18266                    95-4200409
(State or Other Jurisdiction       (Commission                 (IRS Employer
       of Incorporation)           File Number)              Identification No.)


10900 Wilshire Blvd., 15th Floor, Los Angeles, California         90024
       (Address of Principal Executive Offices)                (Zip Code)



       Registrant's telephone number, including area code: (310) 824-9990


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Item 5.  Other Events.

        As previously reported in a Form 8-K dated June 30, 1997, pursuant to
the Partnership Agreement, on June 27, 1997, Falcon Classic Cable Income
Properties, L.P. (the "Registrant") entered into an agreement (the "Asset
Purchase Agreement") to sell substantially all of the Registrant's assets for
$82,000,000 in cash.

        As previously reported in a Form 8-K dated October 2, 1997, on or about
September 2, 1997, Paul J. Isaac, a Unitholder of the Registrant, purporting to
act on behalf of himself and other similarly situated Unitholders, filed a
putative class action lawsuit in Los Angeles County Superior Court, based on the
pending sale, against the Registrant, its general partner and certain of its
directors and officers (the "Defendants").

        As previously reported in a Form 8-K dated January 12, 1998, subject to
Court approval, the parties reached an agreement (the "Settlement Agreement"),
effective December 31, 1997, resolving and settling the Lawsuit.

        On March 3, 1998, the Court approved the Settlement Agreement and
entered the Judgment. A copy of the Judgment is attached hereto as Exhibit 5.1
and incorporated herein by this reference.

        On March 6 and 9, 1998, pursuant to the Settlement Agreement, the
Judgment and the Asset Purchase Agreement, the sale of the Registrant's cable
assets closed with the exception of the cable system franchise operated in
Somerset, Kentucky. The cable assets sold represented 92.4% of the total
transaction. As a result of the closing, pursuant to the Settlement Agreement,
the Judgment and the Asset Purchase Agreement, the Registrant received
$76,784,352.42 (the "Gross Sales Proceeds"). This amount represented purchase
price, plus accrued interest on the net purchase price attributable to the
systems sold, minus an appropriate portion of the settlement notice costs. As a
result of the closing, pursuant to the Settlement Agreement, the Defendants
separately transferred $1,172,335.19 to the Settlement Fund. This amount
represented settlement payment principal, plus accrued interest on that
principal, minus an appropriate portion of the settlement notice costs.

        As of March 9, 1998, the Registrant's sole remaining cable system asset
is the cable franchise operated in Somerset, Kentucky (the "City of Somerset").
This asset represents 7.6% of the total transaction. To date, the requisite
regulatory approvals have not been obtained for the City of Somerset. These
approvals are required to complete the sale of the City of Somerset cable
system. The Registrant will continue to negotiate with the City of Somerset in
hopes of procuring the necessary approvals. If these approvals are


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received on or before September 30, 1998, the Registrant will complete the sale
and the Unitholders of record at the time of the sale will receive the asset
sale proceeds (including accrued interest at the favorable rate of 10% per annum
on the net purchase price attributable to the City of Somerset). In addition,
the Defendants will transfer the remaining balance of the Settlement Fund (plus
accrued interest thereon). If the Registrant is unable to secure the necessary
approval in the time allotted, the Registrant will explore alternative
liquidation options, including sale to a third party.

        As a result of the closings described above and pursuant to the terms
and conditions of the Partnership Agreement, the Registrant currently intends to
distribute the net sales proceeds (i.e., the Gross Sales Proceeds less all
applicable adjustments, allocations, bank debt, liabilities, settlement costs
and reductions pursuant to the Partnership Agreement and Settlement Agreement)
in late March or early April 1998. The General Partner currently anticipates a
distribution of $58,151,900.00 or $809.02 per unit, although the actual amount
received may vary depending upon individual tax withholding requirements. In
addition, if the Registrant is able to close the sale of the City of Somerset
cable system, the Registrant will distribute the net sales proceeds from that
sale as soon as reasonably practicable.

        Finally, once the Judgment becomes Final, the Settlement Fund will be
distributed to members of the Settlement Class. The Settlement Class and the
term "Final" are defined in the Stipulation of Settlement, dated as of December
31, 1997, and attached as Exhibit 1 to the Form 8-K dated January 12, 1998. With
certain conditions and limitations specified in the Stipulation of Settlement,
the Settlement Class consists of all unitholders as of June 30, 1997. The
Registrant currently anticipates distribution of the Settlement Fund in late May
or early June 1998. Subsequent distributions will be made if necessary (e.g.,
City of Somerset) and as appropriate.

Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits

               (i)    Exhibits


        Exhibit No.                   Description
        -----------                   -----------
           
          5.1                 Judgment entered March 3, 1998 in the matter of
                             Paul J. Isaac et al. v. Falcon Classic Cable Income
                             Properties, L.P., Falcon Classic Cable Investors,
                             L.P., Falcon Holding Group, L.P., Marc B. Nathanson
                             and Frank J. Intiso, Case No. BC177205.


                                   *  *  *  *


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                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                      Falcon Classic Cable Income Properties, L.P.

                             By: Falcon Classic Cable Investors, L.P.
                                 General Partner

                             By: Falcon Holding Group, L.P.
                                 General Partner

                             By: Falcon Holding Group, Inc.
                                 General Partner

                             By: /s/ Michael K. Menerey
                                 -------------------------
                                 Michael K. Menerey
                                 Chief Financial Officer


Date:  March 16, 1998


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EX-5.1

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                                                                     EXHIBIT 5.1


                    SUPERIOR COURT OF THE STATE OF CALIFORNIA



                              COUNTY OF LOS ANGELES


PAUL J. ISAAC, Individually and        )     CASE NO. BC177205
On Behalf of All Others Similarly      )
Situated,                              )     CLASS ACTION
                                       )
                                       )
           Plaintiff,                        JUDGMENT
                                       )
                                       )
        v.                             )
                                       )
                                       )
                                       )
                                       )
FALCON CLASSIC CABLE INCOME            )
PROPERTIES, L.P., FALCON               )
CLASSIC CABLE INVESTORS,               )
L.P., FALCON HOLDING GROUP, L.P.,      )
MARC B. NATHANSON, FRANK J.            )
INTISO, and DOES                       )
1-100, INCLUSIVE,                      )
                                       )
                                       )
               Defendants.             )
                                       )
                                       )
                                       )
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        WHEREAS, on or about September 2, 1997, a class action lawsuit was
commenced in this Court on behalf of all Persons(1) owning units of Falcon
Classic Cable Income Properties, L.P., against Falcon Classic Cable Income
Properties, L.P., Falcon Classic Cable Investors, L.P.,

- --------

    (1)Unless otherwise indicated, this preliminary statement incorporates by
reference the definitions in the Stipulation of Settlement, dated as of December
31, 1997, and all terms used herein shall have the same meanings as set forth in
the Stipulation of Settlement.


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Falcon Holding Group, L.P., Marc B. Nathanson, and Frank J. Intiso
("Defendants") alleging causes of action for Breach of Fiduciary Duty, Breach of
Contract, and Breach of the Implied Covenant of Good Faith and Fair Dealing in
connection with the sale of the Cable Systems owned by Falcon Classic Cable
Income Properties, L.P. to the Purchasers (the "Litigation");

        WHEREAS, the Defendants have denied any liability or wrongdoing;

        WHEREAS, the Representative Plaintiff and the Settlement Class (the
"Plaintiffs," and together with the Defendants, the "Parties"), have executed
and filed a Stipulation of Settlement, dated as of December 31, 1997, providing
for the settlement of the Litigation subject to approval by this Court and entry
of this Judgment (the "Stipulation");

        WHEREAS, the Court entered an Order thereon dated January 12, 1998,
inter alia, (a) certifying a Settlement Class for purposes of implementing the
Stipulation; (b) directing that notice of the proposed settlement of the
Litigation be given to Members of the Settlement Class by first-class mail and
publication; and (c) scheduling a hearing to determine whether the proposed
settlement should be approved as just, fair, reasonable and adequate (the
"Notice Order");

        WHEREAS, in accordance with the Notice Order, and as evidenced by the
filing of declarations with this Court on February 20, 1998, (a) the Notice was
caused to be mailed to the Members of the Settlement Class in a timely manner,
advising them of the pendency and proposed settlement of the Litigation and of
the opportunity to object to or opt-out of the settlement; and (b) the Summary
Notice 


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was published on January 16, 1998, in the national edition of The Wall Street
Journal;

        WHEREAS, approval of the Stipulation will result in substantial savings
in time and money for the Court and the litigants, and will further the
interests of justice;

        WHEREAS, the Stipulation is the product of good faith arms' length
negotiations between the Parties; and

        WHEREAS, a hearing was held on March 3, 1998, at which all interested
Persons were given an opportunity to be heard; and the Court having read and
considered all submissions, and having reviewed and considered the files and
records herein, and there being no objections, and good cause appearing
therefor,

        NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that:

        1. This Judgment ("Judgment") incorporates by reference the definitions
in the Stipulation, and all terms used herein shall have the same meanings as
set forth in the Stipulation

        2. This Court has jurisdiction over the subject matter of the Litigation
and over all parties to the Litigation, including all Members of the Settlement
Class.

        3. A Settlement Class, as defined in the Stipulation, is hereby
established in this action, pursuant to Section 382 of the California Code of
Civil Procedure, as modified by Section 15701 of the California Corporations
Code. With respect to the Settlement Class, while the issue of certification has
not been fully litigated, based on the Complaint and the evidence before the
Court (including the Stipulation) it appears that:

               (a) Since this is a class action brought on behalf of limited
partners, numerosity is not required. In any event, there 


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are more than 6,500 Falcon Unitholders, thus satisfying the numerosity
requirement.

               (b) There are questions of law and fact common to the class
which, as to the settlement and the underlying Litigation, predominate over
questions affecting only individual Members of the Settlement Class. All of the
claims averred in the Complaint are based on the Defendants' purported breach of
the Partnership Agreement or breach of fiduciary duties. These alleged breaches
are a prerequisite to any recovery by any and all Settlement Class Members. In
addition, all of the claims are based on the conduct of the Appraisal Process,
the adequacy of the actual price to be paid for the assets, and the timing of
the transaction. All of these issues are the same for each and every Member of
the Settlement Class.

               (c) The claims of the Representative Plaintiff appear to be
typical of the claims of the Settlement Class and Class Counsel and the
Representative Plaintiff do not appear to have been unable to pursue any
available claims.

               (d) In negotiating and entering into the Stipulation, and at all
other times during the pendency of this Litigation, the Representative Plaintiff
and Class Counsel have fairly and adequately represented and protected the
interests of the Settlement Class. Class Counsel and the Representative
Plaintiff conducted substantial investigation regarding the claims before filing
the Complaint. Following initiation of the Litigation, Class Counsel and the
Representative Plaintiff conducted substantial formal and informal discovery and
evidence gathering (including consultation with experts, review of public
filings, review of documents produced by 


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Defendants; interviews with key Falcon personnel, including one of the
Individual Defendants; detailed analysis of the appraisals; and legal research
regarding the claims). In all respects, Class Counsel's representation has been
adequate and vigorous.

               (e) A class action is superior to other available methods for the
fair and efficient adjudication of this Litigation and settlement.

In the event that this Judgment does not become final, Defendants shall have the
right to challenge class certification, with the Plaintiffs bearing the burden
of proving satisfaction of the statutory and common law prerequisites.

        4. The notice provided to the Members of the Settlement Class -- direct
mailings to all Falcon Unitholders as of June 30, 1997 and all current Falcon
Unitholders (6,875 total mailings), publication of the Summary Notice in the
national edition of The Wall Street Journal, notice to nominees and
broker-dealers, including Dean Witter Reynolds, Inc. and Dean Witter, Discover &
Co., who purchased units on behalf of others, as evidenced by the declarations
on file with this Court, constitutes the best notice practicable under the
circumstances and includes individual notice to all Members of the Settlement
Class who could be identified with reasonable effort. Said notice constitutes
valid, due and sufficient notice to all Persons in the Settlement Class,
complying fully with the requirements of California law and any other applicable
law, including the due process clause of the Constitution of the United States.

        5. The settlement as set forth in the Stipulation is hereby approved in
all respects. This Court finds that the settlement is 


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the product of extensive, hard-fought negotiations between experienced and
informed counsel and is in all respects just, fair, reasonable and adequate to
the Falcon Unitholders and the Members of the Settlement Class. This settlement
confers substantial benefits on both current and former Falcon Unitholders,
without the risk and uncertainty of litigation. In light of the defenses
available to the Defendants, recovery without settlement was far from certain.
In contrast, the settlement provides certainty of closing with respect to the
Cable Systems other than Somerset and substantial monetary compensation in
addition to that provided in the Asset Purchase Agreement. The settlement
recognizes the distinction between the legal positions of Persons holding claims
as a result of Falcon's purported misconduct and those entitled to receive the
proceeds of the partnership's liquidation. This carefully structured settlement
represents a well balanced resolution of the two groups' claims, a fact
highlighted by the absence of any objection.

        6. The Persons identified in Exhibit 1 hereto (the "Opt-Outs") have
filed timely and valid requests for exclusion and are hereby excluded from the
Settlement Class. The Opt-Outs are not entitled to receive any portion of the
Settlement Fund. In addition, the Opt-Outs are not bound by the Stipulation or
by this Judgment of dismissal. The Opt-Outs and any other excluded Persons may
pursue their own individual remedies, if any, against the Defendants, but are
hereby enjoined and restrained from filing or prosecuting any class action based
on any of the Released Claims. All Settlement Class Members are bound by this
Judgment and the Stipulation, including all releases provided for therein.

        7. The Stipulation, and the settlement contained therein, 


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reflects a compromise and settlement of disputed claims and is not a finding on
the merits, nor an admission or concession by the Defendants, nor is this
Judgment or any other pleading in this matter, a finding of the validity of any
claims in the Litigation. Indeed, there has never been any adverse finding
against any of the Defendants on any of the merits. Further, neither this
Judgment, the Stipulation, nor any document referred to therein, nor any action
taken to execute or carry out the Stipulation or this Judgment, may be construed
as, or may be used as an admission by or against the Defendants, their Related
Parties, or any other Person, of any fault, wrongdoing or liability whatsoever.
This Judgment, the Stipulation, any documents referred to therein, the fact of
execution of the Stipulation, and any action taken to carry out the Stipulation
or this Judgment shall not be offered or received in evidence in any action or
proceeding against any of the Defendants or their Related Parties in any court,
administrative agency or other tribunal for any purpose whatsoever other than to
enforce the provisions of this Judgment, the Stipulation, or any related
agreement or release; except that the Defendants and/or their Related Parties
may file the Stipulation, the Judgment, and any documents referred to therein,
in any action that may be brought against them (including, but not limited to,
this or related Litigation) as evidence of the settlement or to support a
defense or counterclaim based on principles of res judicata, collateral
estoppel, release, good faith settlement, judgment bar or reduction or any other
theory of claim preclusion or issue preclusion or similar defense.

        8. This Court hereby dismisses on the merits, with prejudice, without
costs (except as otherwise provided in the Stipulation) the 


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Complaint herein and this Litigation in all respects including all Released
Claims brought or which might have been brought against the Defendants and their
Related Parties.

        9. This settlement is the product of substantial, good faith, arms'
length negotiations between Class Counsel and Defendants' Counsel, and is, in
all respects just, fair, reasonable and adequate to the Settlement Class
Members, and in good faith within the meaning of the principles of law as
enunciated by and decisions under California Code of Civil Procedure
Section 877.6 and Tech-Bilt, Inc. v. Woodward-Clyde & Assoc., 38 Cal. 3d 488
(1985) and its progeny. Among other things, this settlement was negotiated by
competent counsel experienced in complex litigation, there is no evidence of any
collusion, fraud or tortious conduct aimed at causing injury to the interests of
any Person, the settlement represents a good faith estimate of the Defendants'
proportionate liability, if any, the only insurance company issuing potentially
applicable policies has stated that it believes that no coverage is applicable,
and the various aspects of the settlement consideration are just, fair,
reasonable, and equitable under the circumstances.

        10. Each and every Released Claim of each and every Member of the
Settlement Class, the Representative Plaintiff and each of their respective
Related Parties, is hereby fully, finally, and forever released, relinquished
and discharged, and is hereby fully, finally, and forever conclusively deemed to
be released, relinquished and discharged, as against the Defendants and each of
their respective Related Parties (including, but not limited to Arthur Anderson
LLP, Kane Reece Associates, Inc., Communications Equity Associates, Inc., and
each of their respective Related Parties). The Representative 


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Plaintiff, the Members of the Settlement Class, each of their respective Related
Parties and all Persons in privity with them, and all Persons acting in concert
or participation with them, either directly, indirectly, representatively or in
any other capacity, are hereby forever barred, restrained and enjoined from
filing, prosecuting, pursuing, or litigating any of the Released Claims against
the Defendants and each of their respective Related Parties in this or any other
forum.

        11. Falcon and each of its Related Parties shall be deemed to have
fully, finally, and forever released, relinquished and discharged all of the
other Defendants and each of their respective Related Parties from all claims
(including Unknown Claims related thereto), arising out of, relating to, or in
connection with the operation of Falcon, including, but not limited to, the sale
of Falcon's Cable Systems, claims for contribution and/or indemnity, and claims
that are implied or express, contractual or otherwise, other than claims based
upon compliance with the Stipulation (the "Falcon Released Claims"). Falcon and
each of its Related Parties, and all Persons in privity with them, and all
Persons acting in concert or participation with them, either directly,
indirectly, representatively or in any other capacity, are hereby forever
restrained and enjoined from prosecuting, pursuing, or litigating any of the
Falcon Released Claims against the Defendants and/or each of their Related
Parties in this or any other forum.

        12. Each of the Defendants and each of their respective Related Parties
shall be deemed to have fully, finally, and forever released, relinquished and
discharged each and all of the Settlement Class Members (including the
Representative Plaintiff) and each of their 


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respective Related Parties, from all claims (including Unknown Claims related
thereto), based on, arising out of, relating to, or in connection with the
institution, prosecution, assertion, settlement or resolution of the Litigation,
including the settlement set forth in the Stipulation, except for the right to
enforce the terms of the Stipulation.

        13. This Court reserves jurisdiction, without affecting the finality of
this Judgment, over: (a) implementation of this settlement and any award or
distribution of the Settlement Fund or Additional Payments; (b) hearing and
determining Class Counsel's Fee and Expense Application; (c) enforcing and
administering the Stipulation including any releases contained therein; and (d)
all other matters related or ancillary to the foregoing.

        14. No Falcon Unitholder, Settlement Class Member, or their respective
Related Parties shall have any claim against Falcon, the Representative
Plaintiff, Class Counsel, Defendants' Counsel, the Settlement Fund Distribution
Agent, or any claims administrator or other agent designated by Falcon or the
Settlement Fund Distribution Agent, based on distributions made substantially in
accordance with the Stipulation and the settlement contained therein, or any
further orders of this Court.


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        15. A separate order shall be entered awarding attorneys' fees and
expenses and any incentive award for the Representative Plaintiff pursuant to
Class Counsel's Fee and Expense Application, if any. Any such order and/or any
appeal thereof shall not disturb or affect the finality or any of the terms of
this Judgment.



Dated:  March 3, 1998               /s/ Bruce Mitchell
                                    ---------------------------
                                    Hon. Bruce Mitchell
                                    Judge Pro Tem of the Superior Court


Respectfully Submitted,

IRELL & MANELLA LLP
Richard H. Borow, P.C.
David Siegel
Seth E. Pierce


  /s/ Richard H. Borow
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   Richard H. Borow, P.C.



SCHUBERT & REED LLP
Robert C. Schubert
Juden Justice Reed
Willem Jonckheer


  /s/ Robert C. Schubert
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   Robert C. Schubert


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                                  Attachment 1


                                                     
1.      Suzanne Crook                              10 units
        Rte. 4 Box 1165
        Cleveland, TX 77327

2.      Guy W. Fisher                              13 units
        8890 Shallowford Road
        Lewisville, NC 27023

3.      Julia Lanteigne                            50 units
        423 Graciela Circle
        St. Augustine, FL 32086

4.      Gerald Bruce and Mary Ann McBride          10 units
        15307 Mandan Road
        Apple Valley, CA 92307

5.      Beverly J. Niedermiller                     9 units
        4137 South U.S. 23
        Greenbush, Michigan 48738

6.      Leonard and Barbara Sandler                 5 units
        1250 S.W. 102 Avenue
        Pembroke Pines, FL 33205

7.      Audrey L. Scott                             4 units
        285 W. Ascot Avenue
        Rio Linda, CA 95673

8.      Lynn D. Smith                              10 units
        309 E. Red Bud Road
        Knoxville, Tennessee 37920-5137

9.      Barbara C. Stubbs                           2 units
        701 Trailwood Lane
        Marietta, GA 30064

10.     Lela E. Wagner                             20 units
        11922 Pepperidge Cove
        San Antonio, TX 78213

11.     Frances D. Wright                          13 units
        320 Straughns Mill Rd.
        Pedricktown, NJ 08067-3126







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