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UNITED STATES
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
November 17, 1999
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Date of Report (Date of earliest event reported)
GENESIS DIRECT, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-24173 22-3449660
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(State or other jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification)
100 Plaza Drive, Secaucus, New Jersey 07094
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 867-2800
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
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As previously disclosed in its Current Report on Form 8-K dated
September 3, 1999, on August 19, 1999, Genesis Direct, Inc. and substantially
all of its subsidiaries (collectively, the "Debtors") filed petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C.
Sections 101 et seq., in the United States Bankruptcy Court for the District of
New Jersey (the "Bankruptcy Court"). The Debtors since their filing for
reorganization have continued to operate their businesses and their assets as
debtors-in-possession.
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On November 5, 1999, CW Gifts LLC ("Carol Wright"), Genesis Direct, Inc.
and Little Genesis, Inc., and Dr. Leonard's Healthcare Corp. ( "Dr. Leonard's")
entered into an Asset Purchase Agreement pursuant to which Dr. Leonard's will
acquire Carol Wright's customer and mailing lists, catalog artwork, service and
trademarks and 800 and 888 phone numbers (the "Carol Wright Assets"). The
Agreement with Dr. Leonard's provides for a cash advance to Carol Wright of
$4,000,000, the assumption of certain liabilities and the payment of a royalty
of 4% on sales by Dr. Leonard's using the "Carol Wright Gifts" name (2% for
syndicated sales). The royalty will first be credited against the cash advance
and amount of assumed liabilities and then paid to Carol Wright. The sale is
subject to a number of conditions, including Dr. Leonard's negotiating with
Carol Wright Promotions, Inc., an affiliate of Cox Enterprises, Inc., a license
for the use of the Carol Wright name. On November 17, 1999, the Bankruptcy Court
entered an order (i) establishing bidding and sale procedures under which other
interested parties may submit higher offers than that of Dr. Leonard's to
acquire the business and assets of Carol Wright and (ii) scheduling for December
7, 1999 a hearing to approve the sale. Carol Wright is a direct retail catalog
marketer of popularly priced housewares, gifts, apparel, collectibles, health
and beauty aids, gifts and toys.
Pursuant to orders of the Bankruptcy Court (the "Auction Orders") entered
on November 10 and 17, 1999, respectively, the Debtors have proposed to sell at
an auction sale on December 14, 1999 (the "Auction Sale"), the assets and
business of the Debtors' Proteam.com and Voyager businesses, including but not
limited to, catalogs, trademarks, proprietary databases, website domains, and
licenses (the "Proteam.com and Voyager Assets"). The Proteam business is an
internet and direct sales catalog retailer of sports licensed merchandise. The
Voyager business is an in-flight retail merchandise catalog on both TWA and
American Airlines flights. The Debtors have also proposed to sell at the Auction
Sale the assets and business of the The Edge Company Catalog, Inc. (the "Edge
Assets"). The Edge Company Catalog is a direct catalog retailer of high-tech
gifts, tools, knives and other unique products. The Auction Orders establish
procedures by which interested parties may submit bids for the acquisition of
the Proteam.com and Voyager Assets and the Edge Assets, including among other
things, a minimum bid of $10,000,000 for the Proteam.com and Voyager Assets. No
minimum bid has been set for the sale of the Edge Assets.
At the time of its Chapter 11 reorganization filing, the Debtors entered
into a $10,000,000 debtor-in-possession revolving credit facility with the CIT
Group/Business Credit, Inc. ("CIT"). Pursuant to the terms of such facility the
Debtors are required to repay $3,300,000 on or before November 30, 1999. The
Debtors and CIT are engaged in negotiations to extend the date by which such
repayment is due to permit the Debtors to complete the sales of the Carol
Wright Assets, the Proteam.com and Voyager Assets and the Edge Assets, the
proceeds from which will be used in part to make such repayment.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act as amended, the
Registrant has duly caused this Current Report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENESIS DIRECT, INC.
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(Registrant)
By /s/ Frederick Larcombe
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Chief Financial Officer
Date: November 24, 1999
