<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)(1)
PARTY CITY CORPORATION
--------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
--------------------------------------------------------------------------------
(Title of Class of Securities)
702145103
--------------------------------------------------------------------------------
(CUSIP Number)
SPECIAL VALUE BOND FUND, LLC
C/O TENNENBAUM & CO., LLC
11100 SANTA MONICA BOULEVARD, SUITE 210
LOS ANGELES, CALIFORNIA 90025
(310) 566-1000
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
OCTOBER 18, 2000
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box: [ ].
(Continued on the following pages)
Page 1 of 12 Pages
(1) 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).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 702145103 PAGE 2 OF 12
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
SPECIAL VALUE BOND FUND, LLC
IRS NO.: 95-4758920
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,261,000 SHARES(1)
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.6%(2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
(1) AN AGGREGATE OF 3,096,000 SHARES ARE ISSUABLE UPON EXERCISE OF THE
WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW).
(2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER
20, 2000, AS REPORTED BY PARTY CITY CORPORATION IN ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 1, 2000 AND COMPUTED IN ACCORDANCE WITH
RULE 13d-3(d)(1).
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 702145103 PAGE 3 OF 12
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
SPECIAL VALUE BOND FUND II, LLC
IRS NO.: 52-2263020
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,261,000 SHARES(1)
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.6%(2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
(1) AN AGGREGATE OF 3,096,000 SHARES ARE ISSUABLE UPON EXERCISE OF THE
WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW).
(2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER
20, 2000, AS REPORTED BY PARTY CITY CORPORATION IN ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 1, 2000 AND COMPUTED IN ACCORDANCE WITH
RULE 13d-3(d)(1).
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 702145103 PAGE 4 OF 12
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
SVIM/MSM,LLC
IRS NO.: 95-4760193
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,261,000 SHARES(1)
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.6%(2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
(1) AN AGGREGATE OF 3,096,000 SHARES ARE ISSUABLE UPON EXERCISE OF THE
WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW).
(2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER
20, 2000, AS REPORTED BY PARTY CITY CORPORATION IN ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 1, 2000 AND COMPUTED IN ACCORDANCE WITH
RULE 13d-3(d)(1).
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 702145103 PAGE 5 OF 12
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
SVIM/MSMII,LLC
IRS NO.: 52-2263031
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,261,000 SHARES(1)
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.6%(2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
(1) AN AGGREGATE OF 3,096,000 SHARES ARE ISSUABLE UPON EXERCISE OF THE
WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW).
(2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER
20, 2000, AS REPORTED BY PARTY CITY CORPORATION IN ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 1, 2000 AND COMPUTED IN ACCORDANCE WITH
RULE 13d-3(d)(1).
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 6
SCHEDULE 13D
CUSIP NO. 702145103 PAGE 6 OF 12
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
SPECIAL VALUE INVESTMENT MANAGEMENT, LLC
IRS NO.: 95-4759860
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,261,000 SHARES(1)
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.6%(2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
(1) AN AGGREGATE OF 3,096,000 SHARES ARE ISSUABLE UPON EXERCISE OF THE
WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW).
(2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER
20, 2000, AS REPORTED BY PARTY CITY CORPORATION IN ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 1, 2000 AND COMPUTED IN ACCORDANCE WITH
RULE 13d-3(d)(1).
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 7
SCHEDULE 13D
CUSIP NO. 702145103 PAGE 7 OF 12
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
TENNENBAUM & CO., LLC
IRS NO.: 95-4587347
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,261,000 SHARES(1)
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.6%(2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
(1) AN AGGREGATE OF 3,096,000 SHARES ARE ISSUABLE UPON EXERCISE OF THE
WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW).
(2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER
20, 2000, AS REPORTED BY PARTY CITY CORPORATION IN ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 1, 2000 AND COMPUTED IN ACCORDANCE WITH
RULE 13d-3(d)(1).
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 8
SCHEDULE 13D
CUSIP NO. 702145103 PAGE 8 OF 12
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
MICHAEL E. TENNENBAUM
S.S. NO.: ###-##-####
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00, WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,261,000 SHARES(1)
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,261,000 SHARES(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.6%(2)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
(1) AN AGGREGATE OF 3,096,000 SHARES ARE ISSUABLE UPON EXERCISE OF THE
WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW).
(2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER
20, 2000, AS REPORTED BY PARTY CITY CORPORATION IN ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 1, 2000 AND COMPUTED IN ACCORDANCE WITH
RULE 13d-3(d)(1).
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 9
PAGE 9 OF 12
This Amendment No. 3 to Schedule 13D relating to Party City
Corporation, a Delaware corporation ("Party City"), is being filed on behalf of
the undersigned to amend the Schedule 13D filed with the Commission on August
26, 1999, as amended by Amendment No. 1 thereto filed with the Commission on
September 13, 1999 and amendment No. 2 thereto filed with the Commission on
January 21, 2000 (together, the "Schedule 13D"). Terms defined in the Schedule
13D and not otherwise defined herein have the same meaning herein as in the
Schedule 13D.
ITEM 1. SECURITY AND ISSUER.
The information in Item 1 is hereby amended and restated as
follows:
This statement relates to the beneficial ownership of 3,261,000
shares of Common Stock, par value $.01 per share ("Common Stock"), of Party
City. The principal executive offices of Party City are located at 400 Commons
Way, Rockaway, New Jersey 07866.
ITEM 2. IDENTITY AND BACKGROUND.
The information in Item 2 is hereby amended and restated as
follows:
Special Value Bond Fund, LLC ("SVBF") and Special Value Bond
Fund II, LLC ("SVBFII") are each Delaware limited liability companies. SVBF's
and SVBFII's addresses are both 11100 Santa Monica Boulevard, Suite 210, Los
Angeles, California 90025. The principal business of each of SVBF and SVBFII is
making investments and managing assets.
The managing member of SVBF is SVIM/MSM, LLC ("SVIM/MSM"), a
Delaware limited liability company. The managing member of SVBFII is SVIM/MSMII,
LLC ("SVIM/MSMII"), a Delaware limited liability company. The investment advisor
to each of SVBF and SVBFII is Special Value Investment Management, LLC ("SVIM"),
a Delaware limited liability company. The managing member of each of SVIM/MSM,
SVIM/MSMII and SVIM is Tennenbaum & Co., LLC, a Delaware limited liability
company ("TCO"). The managing member of TCO is Michael E. Tennenbaum, a United
States citizen. Each of SVIM/MSM, SVIM/MSMII, SVIM and TCO have the same
principal business and address as that of SVBF and SVBFII. Mr. Tennenbaum's
principal occupation is serving as managing member of TCO and his address is the
same as that of SVBF and SVBFII. SVBF, SVBFII, SVIM/MSM, SVIM/MSMII, SVIM, TCO
and Mr. Tennenbaum are collectively referred to herein as the "Reporting
Persons."
During the last five years, the Reporting Persons have not been
(i) convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of the proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information in Item 3 is hereby amended and restated as
follows:
The statement relates to the acquisition by the Reporting Persons
of 165,000 shares of Common Stock of Party City and of a warrant dated as of
August 16, 1999, as amended on January 14, 2000 (the "Warrant"), to purchase
3,096,000 shares of Common Stock of Party City. The sole source of funds used in
purchasing the 165,000 shares of Common Stock of Party City reported herein in
Item 5 was the working capital of SVBFII. The amount of funds used in such
purchase was $513,838 (including brokerage commissions).
Party City issued the Warrant pursuant to that certain Securities
Purchase Agreement between Party City and TCO dated as of August 16, 1999 (the
"Securities Purchase Agreement") as amended by that certain First Amendment to
Securities Purchase Agreement dated as of January 14, 2000 (the "Amendment").
The Warrant was acquired by TCO along with certain secured notes of Party City
in the aggregate principal amount of $6,750,000. The aggregate purchase price
for the Warrant and such secured notes from Party City was $6,750,000. The
source of funds for the purchase of the Warrant and the secured notes by TCO was
a margin account of the Reporting Persons with Jefferies & Company, Inc.
On September 1, 1999, SVBF purchased the Warrant and the secured
notes from TCO for aggregate consideration of $6,750,000. The source of funds
for the purchase of the Warrant and the secured notes from TCO was the working
capital of SVBF.
Upon exercise of the Warrant in full, SVBF must pay an exercise
price of $1.07 per share for an aggregate exercise price of $3,312,720. It is
presently anticipated that the source of funds for the exercise price will be
SVBF's general working capital or the working capital of an affiliate.
<PAGE> 10
PAGE 10 OF 12
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The information in Item 5 is hereby amended and restated as
follows:
The shares of Common Stock identified in Item 1 constitute
approximately 20.6% of the outstanding Common Stock of Party City, based upon
12,722,205 shares of Common Stock outstanding as of September 20, 2000, as
reported by Party City Corporation in its Annual Report on Form 10-K for the
year ended July 1, 2000, and computed in accordance with Rule 13d-3(d)(1).
SVBFII has the sole power of voting and disposition with respect to the 165,000
shares of Common Stock of Party City it has acquired. Upon exercise of the
Warrant, SVBF will have the sole power of voting and disposition with respect to
the 3,096,000 shares of Common Stock issuable upon such exercise. By reason of
(i) Mr. Tennenbaum's position as managing member of TCO, (ii) TCO's position as
managing member of SVIM/MSM, SVIM/MSMII and SVIM, (iii) SVIM/MSM's position as
managing member of SVBF, (iv) SVIM/MSMII's position as managing member of SVBFII
and (v) SVIM's position as investment advisor to SVBF and SVBFII, each of Mr.
Tennenbaum, TCO, SVIM/MSM, SVIM/MSMII and SVIM may be deemed to share such
powers of voting and disposition.
The following transactions in Common Stock of Party City were
open market purchases on the OTC Bulletin Board effected by SVBFII:
NUMBER OF SHARES PRICE
DATE OF COMMON STOCK PER SHARE
10/17/00 55,000 $3.1055
10/18/00 105,000 $3.0990
10/23/00 5,000 $3.5280
Except as described in this statement, the Reporting Persons have
not effected transactions in Party City's Common Stock within 60 days prior to
the date of this statement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The information in Item 7 is hereby amended and restated as
follows:
Exhibit 1 Joint Filing Agreement
Exhibit 2 Form of Amended and Restated Warrant, dated January 14,
2000, of Party City Corporation, incorporated herein by
reference to Exhibit 4.1 to Current Report on Form 8-K of
Party City Corporation filed with the Securities and
Exchange Commission on January 20, 2000 (File No.
0-27826).
Exhibit 3 Form of Securities Purchase Agreement, dated August 16,
1999 by and between Party City Corporation and Tennenbaum
& Co., LLC., incorporated herein by reference to Exhibit
4.6 to Current Report on Form 8-K of Party City
Corporation filed with the Securities and Exchange
Commission on August 25, 1999 (File No. 0-27826).
<PAGE> 11
PAGE 11 OF 12
Exhibit 4 First Amendment to Securities Purchase Agreement, dated
January 14, 2000 by and among Party City Corporation,
Special Value Bond Fund, LLC, Enhanced Retail Funding,
LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners
L.P., TCO/Party City, LLC, Clyde Street Investment, LLC
and Richmond Associates, L.P., incorporated herein by
reference to Exhibit 4.3 to Current Report on Form 8-K of
Party City Corporation filed with the Securities and
Exchange Commission on January 20, 2000 (File No.
0-27826).
Exhibit 5 Investor Rights Agreement, dated August 16, 1999 by and
between Party City Corporation, Tennenbaum & Co., LLC,
TCO/Party City, LLC, Enhanced Retail Funding, LLC,
Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P.,
and Richmond Associates, L.P., incorporated herein by
reference to Exhibit 10.1 to Current Report on Form 8-K of
Party City Corporation filed with the Securities and
Exchange Commission on August 25, 1999 (File No. 0-27826).
<PAGE> 12
PAGE 12 OF 12
SIGNATURES
After reasonable inquiry and to the best of their knowledge and
belief, the undersigned each certifies that the information set forth in this
statement is true, complete and correct.
Dated: October 23, 2000 SPECIAL VALUE BOND FUND, LLC
By: SVIM/MSM, LLC, its Managing Member
By: Tennenbaum & Co., LLC,
its Managing Member
By: /s/ Michael E. Tennenbaum
------------------------------
Michael E. Tennenbaum,
its Managing Member
SPECIAL VALUE BOND FUND II, LLC
By: SVIM/MSMII, LLC, its Managing Member
By: Tennenbaum & Co., LLC,
its Managing Member
By: /s/ Michael E. Tennenbaum
------------------------------
Michael E. Tennenbaum,
its Managing Member
SVIM/MSM, LLC
By: Tennenbaum & Co., LLC,
its Managing Member
By: /s/ Michael E. Tennenbaum
-----------------------------------
Michael E. Tennenbaum,
its Managing Member
SVIM/MSMII, LLC
By: Tennenbaum & Co., LLC,
its Managing Member
By: /s/ Michael E. Tennenbaum
-----------------------------------
Michael E. Tennenbaum,
its Managing Member
SPECIAL VALUE INVESTMENT MANAGEMENT, LLC
By: Tennenbaum & Co., LLC,
its Managing Member
By: /s/ Michael E. Tennenbaum
-----------------------------------
Michael E. Tennenbaum,
its Managing Member
TENNENBAUM & CO., LLC
By: /s/ Michael E. Tennenbaum
---------------------------------------
Michael E. Tennenbaum,
its Managing Member
/s/ Michael E. Tennenbaum
--------------------------------------------
MICHAEL E. TENNENBAUM
<PAGE> 13
EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement
Exhibit 2 Form of Amended and Restated Warrant, dated January 14,
2000, of Party City Corporation, incorporated herein by
reference to Exhibit 4.1 to Current Report on Form 8-K of
Party City Corporation filed with the Securities and
Exchange Commission on January 20, 2000 (File No.
0-27826).
Exhibit 3 Form of Securities Purchase Agreement, dated August 16,
1999 by and between Party City Corporation and Tennenbaum
& Co., LLC., incorporated herein by reference to Exhibit
4.6 to Current Report on Form 8-K of Party City
Corporation filed with the Securities and Exchange
Commission on August 25, 1999 (File No. 0-27826).
Exhibit 4 First Amendment to Securities Purchase Agreement, dated
January 14, 2000 by and among Party City Corporation,
Special Value Bond Fund, LLC, Enhanced Retail Funding,
LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners
L.P., TCO/Party City, LLC, Clyde Street Investment, LLC
and Richmond Associates, L.P., incorporated herein by
reference to Exhibit 4.3 to Current Report on Form 8-K of
Party City Corporation filed with the Securities and
Exchange Commission on January 20, 2000 (File No.
0-27826).
Exhibit 5 Investor Rights Agreement, dated August 16, 1999 by and
between Party City Corporation, Tennenbaum & Co., LLC,
TCO/Party City, LLC, Enhanced Retail Funding, LLC,
Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P.,
and Richmond Associates, L.P., incorporated herein by
reference to Exhibit 10.1 to Current Report on Form 8-K of
Party City Corporation filed with the Securities and
Exchange Commission on August 25, 1999 (File No. 0-27826).
