SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE l3D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
ASTA FUNDING, INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
0462220109
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(CUSIP Number)
with a copy to:
Mitchell Herman John D. Schupper
Asta Funding, Inc. LOWENSTEIN SANDLER PC
Englewood Cliffs, New Jersey 07632 65 Livingston Avenue
(201) 567-5648 Roseland, New Jersey 07068
(973) 597-2500
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(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
August 15, 1997
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule l3G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), (f) or (g), check the following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule l3d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 0462220109
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only):
Gary Stern
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a)
(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions):PF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: USA
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Number of 7) Sole Voting Power: 1,116,238*
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Shares Beneficially 8) Shared Voting Power: 0
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Owned by
Each Reporting 9) Sole Dispositive Power: 1,116,238*
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Person With: 10) Shared Dispositive Power: 0
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,116,238*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
28.2%
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14) Type of Reporting Person (See Instructions): IN
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* Includes a total of 110,648 shares of Asta Funding, Inc. common stock
beneficially owned by two minor children of the reporting person, over which
the reporting person has voting and dispositive power.
Item 1. Security and Issuer
This statement relates to the Common Stock, par value $.01 per share, of
Asta Funding, Inc. ("Shares"). The issuer has its principal executive offices
located at 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632.
Item 2. Identity and Background
(a) Gary Stern
(b) 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632
(c) Chief Executive Officer, Asta Funding, Inc., 210 Sylvan Avenue,
Englewood Cliffs, New Jersey 07632
(d) Criminal convictions: None
(e) Civil proceedings: None
(f) USA
Item 3. Source and Amount of Funds or Other Consideration
All funds used by Gary Stern to purchase Shares were derived from his
personal funds. The amount of such funds used in making the purchases reported
in this Schedule 13D was $83,678 (including $78,678 used to purchase Shares
beneficially owned by two minor children of Mr. Stern).
Item 4. Purpose of Transaction
The acquisition of the Shares by the reporting person is for investment
purposes. The reporting person has no present plans or intentions which would
result in any of the transactions required to be described in Item 4 of Schedule
13D.
Item 5. Interest in Securities of the Issuer
Based upon the information contained in the Quarterly Report on Form 10QSB
for the period ending December 31, 1997, there are issued and outstanding
3,945,000 Shares. The reporting person beneficially owns 1,116,238 Shares or
28.2% of the Shares. The reporting person has sole power to vote or direct the
vote and sole power to dispose or direct the disposition of the 1,116,238
Shares. The following table details the transactions by the reporting persons in
the Shares in the past sixty (60) days: Gary Stern
Date Quantity Price Transaction Type
1/26/98 10,000 $0.50 Open Mkt. Purchase
1/27/98 84,600* $0.93 Open Mkt. Purchase
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* Purchased on behalf of two minor children of the reporting person.
No other entity controlled by the reporting person has traded Shares in the
past sixty (60) days.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Mr. Gary Stern is a director and the chief executive officer and president
of Asta Funding, Inc. On August 15, 1997, Mr. Stern, pursuant to a stock
purchase agreement (a copy of which is attached hereto as Exhibit A) purchased
891,990 Shares from Asta Group, Incorporated in a private securities
transaction.
Item 7. Material to be filed as Exhibits
A. Stock Purchase Agreement, dated as of August 15, 1997, between Asta
Group, Incorporated and the Purchasers listed on Schedule A hereto.
<PAGE>
Exhibit A
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of the 15th day of
August, 1997, by and among Asta Group, Incorporated, a Delaware corporation with
offices located at 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632 (the
"Seller") and the parties identified as "Purchasers" on Schedule A hereto, each
of which is herein referred to as a "Purchaser."
W I T N E S S E T H:
WHEREAS, the Seller is the owner of 2,252,500 issued and outstanding shares
of capital stock of Asta Funding, Inc. (the "Corporation");
WHEREAS, the Seller desires to sell to the Purchasers and the Purchasers
desire to purchase from the Seller all such 2,252,500 shares of capital stock of
the Corporation (the "Shares") on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants herein contained and other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the parties hereto hereby agree
as follows:
1. Purchase and Sale of the Shares. Subject to the terms and conditions of
this Agreement, each Purchaser agrees, severally, to purchase at the Closing (as
defined herein), and the Seller agrees to sell to each Purchaser at the Closing,
that number of Shares set forth opposite each Purchaser's name on Schedule A
annexed hereto.
2. Purchase Price; Manner of Payment. The Purchasers shall purchase the
Shares for an aggregate purchase price of $788,375.00 United States Dollars (the
"Purchase Price"). Payment of the Purchase Price shall be made by each Purchaser
delivering to Seller at the Closing a promissory note, substantially in form and
substance as that set forth in Schedule B hereto (collectively, the "Promissory
Notes"), for such Purchaser's portion of the Purchase Price. Upon receipt by the
Seller of the duly executed Promissory Notes, the Seller shall deliver to each
Purchaser certificates representing the number of Shares that such Purchaser is
purchasing, duly endorsed for transfer to such Purchaser.
3. Closing. The purchase and sale of the Shares shall take place at the
offices of Seller on or about August 15, 1997 or at such other time and place as
the Seller and the Purchasers mutually agree upon orally or in writing (the
"Closing").
4. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to each Purchaser as follows:
(a) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Seller has
full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, all of which have been duly authorized
by all requisite corporate action. This Agreement has been duly authorized,
executed and delivered by the Seller and constitutes a valid and legally
binding obligation of the Seller, enforceable in accordance with its terms.
(b) The Seller currently owns the Shares, free and clear of any and
all claims, liens or encumbrances of any kind, except as provided in (i) a
Loan and Security Agreement, dated as of November 10, 1995, between the
Corporation and BankAmerica ("BankAmerica"), as amended (the "Credit
Facility") and (ii) the Security Agreement - Stock Pledge, dated as of
November 10, 1995, between the Seller and BankAmerica (the "Pledge
Agreement"). Except as provided on Schedule C annexed hereto, the Seller
has the absolute and unrestricted right, power and capacity to sell the
Shares to the Purchasers. There are no voting trust arrangements,
shareholder agreements or other agreements granting an option, warrant or
right of first refusal with respect to the Shares to any person.
(c) The Shares are all duly and validly authorized and issued, fully
paid and nonassessable, and were issued in accordance with the registration
or qualification provisions of the Securities Act of 1933, as amended (the
"Act") and any relevant state securities laws.
(d) The Shares being purchased hereunder by the Purchasers will be
free of restrictions on transfer other than restrictions on transfer
imposed by (i) the Credit Facility, (ii) the Pledge Agreement and (iii)
applicable state and federal securities laws.
(e) The execution, delivery and performance of this Agreement by the
Seller will not violate any provision of law, statute, rule or regulation,
or any ruling, writ, injunction, order, judgment or decree of any court,
administration agency or other governmental body or conflict with the terms
of any agreement, note, indenture, mortgage, contract or instrument to
which the Seller is a party, except as provided in Schedule C annexed
hereto.
(f) Except as provided in Schedule C annexed hereto, no consent,
approval or authorization of or declaration to, or filing with, any
governmental authority or any other person or entity is required for the
valid authorization, execution and delivery by the Seller of this Agreement
or for the sale of the Shares as contemplated hereby.
5. Representations and Warranties of the Purchasers. Each Purchaser hereby
represents and warrants to the Seller that:
(a) Such Purchaser has full power and authority to execute and deliver
this Agreement and such Purchaser's Promissory Note and to perform its
obligations under each such document. This Agreement and such Purchaser's
Promissory Note have been duly authorized, executed and delivered by such
Purchaser and constitute valid and legally binding obligations of such
Purchaser, each enforceable in accordance with their terms.
(b) The execution, delivery and performance of this Agreement and such
Purchaser's Promissory Note by such Purchaser will not violate any
provision of law, statute, rule or regulation, or any ruling, writ,
injunction, order, judgment or decree of any court, administration agency
or other governmental body or conflict with the terms of any agreement,
note, indenture, mortgage, contract or instrument to which the such
Purchaser is a party or by which it is bound.
(c) No consent, approval or authorization of or declaration to, or
filing with, any governmental authority or any other person or entity is
required for the valid authorization, execution and delivery by such
Purchaser of this Agreement or such Purchaser's Promissory Note or for the
purchase of the Shares as contemplated hereby.
(d) This Agreement is made with such Purchaser in reliance upon such
Purchaser's representation to the Seller, which by such Purchaser's
execution of this Agreement such Purchaser hereby confirms, that the Shares
to be received by such Purchaser will be acquired for investment for such
Purchaser's own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and that such Purchaser has
no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, such
Purchaser further represents that such Purchaser does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person,
with respect to any of the Shares purchased by the Purchaser.
(e) Such Purchaser believes it has received all the information it
considers necessary or appropriate for deciding whether to purchase the
Shares, including a Valuation for Asta Group, Incorporated and Related
Parties of Fair Market Value of Restricted Common Shares of Asta Funding,
Inc. as of August 15, 1997 prepared by Josephberg Grosz & Co., Inc.
(f) Such Purchaser is (i) an "accredited investor" within the meaning
of Securities and Exchange Commission ("SEC") Rule 501 of Regulation D, as
presently in effect or (ii) either alone or with its purchaser
representative has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the
purchase of the Shares and can bear the economic risk of its purchase. If
other than an individual, such Purchaser also represents that it has not
been organized for the purpose of acquiring the Shares.
(g) Such Purchaser either alone or with its purchaser representative
is familiar with SEC Rule 144, as presently in effect, and understands the
holding provisions and resale limitations imposed thereby and by the Act
upon the Shares.
(h) Such Purchaser either alone or with its purchaser representative
is aware that the transferability of the Shares is restricted by the Credit
Facility and the Pledge Agreement.
(i) Such Purchaser agrees that it has and will take any and all action
required of it so that the transactions contemplated by this Agreement and
such Purchaser's Promissory Note are and remain in strict compliance with
all laws, rules and regulations applicable hereto and thereto.
6. Consent of BankAmerica and the Corporation. The respective obligations
of the Seller and the Purchasers to consummate the transactions contemplated by
this Agreement and the Promissory Notes shall be subject to the fulfillment at
or prior to the Closing of the condition that BankAmerica and the Corporation
consent in writing to the sale of the Shares hereby.
7. Survival of Representations and Warranties. All representations,
warranties, covenants and agreements made in this Agreement or in the Promissory
Notes by the Seller or the Purchasers shall survive the Closing and any
investigation made by or on behalf of the parties hereto.
8. Indemnification. The Seller and each of the Purchasers agree to and do
hereby indemnify and hold each other harmless from and against any claims,
losses, expenses, obligations, deficiencies, liabilities and lawsuits (including
but not limited to reasonable attorneys' fees) which arise or result from the
material inaccuracy of any representation or warranty made herein or the breach
of any agreement hereunder or under the Promissory Notes. The Seller and the
Purchasers shall be entitled to resort to the indemnification provided for in
this Agreement from time to time, without waiving their respective right to seek
any other remedy available under law.
9. Entire Agreement; No Modification. This Agreement, including the
Schedules hereto, and the Promissory Notes represent the entire understanding of
the parties regarding the subject matter hereof and supersede all previous oral
and written agreements between the parties regarding the subject matter hereof.
No modification of this Agreement or of the Promissory Notes shall be valid
unless made in writing and signed by each party thereto.
10. Headings. The captions used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures hereon may be
evidenced by facsimile transmissions.
12. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and such balance shall be enforceable in accordance
with its terms.
13. Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
14. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey, without regard to conflict
of laws provisions thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
ASTA GROUP, INCORPORATED
By:____________________________
Name:
Title:
PURCHASERS:
_______________________________
Arthur Stern
ARTHUR STERN 1995 ANNUITY TRUST
By:_____________________________
Judith Feder, Trustee
_____________________________
Gary Stern
_____________________________
Emily Stern
_____________________________
Ricky Stern
_____________________________
Barbara Marburger
_____________________________
Ari Marburger
_____________________________
Steven Marburger
_____________________________
Eli Marburger
_____________________________
Esther Marburger
_____________________________
Tzvi Marburger
_____________________________
Shira Marburger
_____________________________
Aviva Marburger
_____________________________
Mitchell Herman
<PAGE>
SCHEDULE A
PURCHASERS
Name of Purchaser No. of Shares Purchased
Arthur Stern 516,470
Arthur Stern 1995 Annuity Trust 139,114
Gary Stern 891,990
Emily Stern 55,324
Ricky Stern 55,324
Barbara Marburger 170,634
Ari Marburger 58,364
Steven Marburger 55,324
Eli Marburger 58,364
Esther Marburger 58,364
Tzvi Marburger 56,745
Shira Marburger 55,324
Aviva Marburger 59,985
Mitchell Herman 21,174
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2,252,500
<PAGE>
SCHEDULE B
FORM OF PROMISSORY NOTE
Attached
<PAGE>
SCHEDULE C
1. Asta Funding, Inc. ("Asta") has entered into a Loan and Security
Agreement, dated November 10, 1995, as amended ("Credit Facility"), with
BankAmerica Business Credit, Inc. ("BankAmerica") pursuant to Section 11.1 of
which an event of default would occur should Asta Group, Incorporated cease to
own at least 51% of the issued and outstanding voting stock of Asta. The sale of
the Shares by the Seller is restricted by the Credit Facility. Pursuant to
Section 13.2 of the Credit Facility, both Asta and BankAmerica may consent in
writing to the departure of the aforementioned provision. Accordingly, the
consent of BankAmerica and Asta is required to consummate the transactions
contemplated by this Agreement.
2. The Seller has entered into a Security Agreement-Stock Pledge, dated as
of November 10, 1995 (the "Pledge Agreement") with BankAmerica pursuant to which
all of the Shares are pledged to BankAmerica as collateral for Asta's
obligations under the Credit Facility.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned hereby certifies that the information set forth in this
statement is true, complete and correct.
March 10, 1998
/s/ Gary Stern
Gary Stern
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
