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
Date of Report (Date of earliest event reported): September 8, 1999
--------------
SFAC New Holdings, Inc.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
State of Delaware 33-383149 52-2173534
- ---------------------------------------------------------------------------
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or Identification No.)
organization)
520 Lake Cook Road, Suite 550, Deerfield, IL 60015
-----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 405-5300
------------
ITEM 5. OTHER EVENTS
As previously reported, Cacique, Inc. ("Cacique")
commenced proceedings against Stella Foods, Inc.
("Stella"), a former subsidiary of SFAC New Holdings,
Inc. (the "Company") on May 20, 1993, prior to the
Company's acquisition of Stella from Artal Group S.A..
The proceeding was filed in the California Superior
Court and related to "Hispanic-style cheese" formerly
produced by Stella. As part of the sale of Stella in
December 1997, SFC indemnified the purchaser with
respect to this proceeding. Although SFAC New Holdings,
Inc. is not a defendant in the litigation, it continues
to control the defense. The facts that give rise to
this litigation are more fully described in the
Specialty Foods Acquisition Corporation ("SFAC"), a
parent company of SFAC New Holdings, Inc., Annual Report
on Form 10-K for the fiscal year ended December 31,
1998.
Recently, a jury in the Los Angeles Superior Court
returned a verdict of $4.5 million of compensatory
damages against Stella and certain other defendants. On
September 8, 1999, the Court ruled in a Tentative
Statement of Decision that Stella and certain other
defendants must also pay interest of $1.7 million on the
compensatory damages. In addition, the Court assessed
aggregate punitive damages of $12.5 million against
Stella and C. Dean Metropoulos, former CEO of Stella.
The court has yet to rule on the amount of the
plaintiff's attorney fees to be paid by the defendants.
The Company strongly disagrees with the verdict in this
case. Furthermore, the Company believes that numerous
reversible errors occurred at the trial and it will
vigorously pursue certain post trial motions, its right
of appeal, and other sources of recovery. Post-trial
motions are expected to take several months and the
appeal process could take several years.
Although no assurance can be given due to the uncertainties
related to the outcome of these legal proceedings, the
Company continues to believe that the ultimate
resolution of this matter will not have a material
adverse effect on the Company's financial condition,
results of operations or near-term liquidity.
SIGNATURES
Pursuant to 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.
SFAC NEW HOLDINGS, INC.
-----------------------
(Registrant)
Date: September 16, 1999 By: /s/ Robert L. Fishbune
----------------------
Robert L. Fishbune
Vice President and Chief
Financial Officer
