UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5 )*
Inamed Corporation
(Name of Issuer)
Common Stock
(Title of Class of Securities)
453235103
(CUSIP Number)
Jonathan Green, Esq.
Appaloosa Management L.P.
51 John F. Kennedy Parkway
Short Hills, New Jersey
07078
(201) 376-5400<PAGE>
Robert C. Schwenkel, Esq.
Fried, Frank, Harris,
Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 859-8000<PAGE>
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 10, 1997
(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 which is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13d-1 (b)(3) or (4), check the following box .
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) 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
disclosure 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).
Exhibit Index: Page 7
Page 1 of 11 Pages<PAGE>
SCHEDULE 13D
CUSIP No. 453235103 Page 2 of 11 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Appaloosa Management L.P.
2 Check the Appropriate Box If a Member of a Group*
a.
b. X
3 SEC Use Only
4 Source of Funds*
N/A
5 Check Box If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of4,078,332
Shares
Beneficially 8 Shared Voting Power
Owned By-0-
Each
Reporting 9 Sole Dispositive Power
Person4,078,332
With
10 Shared Dispositive Power
-0-
11 Aggregate Amount Beneficially Owned by Each Reporting
Person
4,078,332
12 Check Box If the Aggregate Amount in Row (11) Excludes
Certain Shares*
13 Percent of Class Represented By Amount in Row (11)
35.61%
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!<PAGE>
SCHEDULE 13D
CUSIP No. 453235103 Page 3 of 11 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
David A. Tepper
2 Check the Appropriate Box If a Member of a Group*
a.
b. X
3 SEC Use Only
4 Source of Funds*
N/A
5 Check Box If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of4,078,332
Shares
Beneficially 8 Shared Voting Power
Owned By-0-
Each
Reporting 9 Sole Dispositive Power
Person4,078,332
With
10 Shared Dispositive Power
-0-
11 Aggregate Amount Beneficially Owned by Each Reporting
Person
4,078,332
12 Check Box If the Aggregate Amount in Row (11) Excludes
Certain Shares*
13 Percent of Class Represented By Amount in Row (11)
35.61%
14 Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
This Amendment No. 5 to the statement on Schedule 13D
filed on behalf of Appaloosa Management L.P. (the "Manager")
and David A. Tepper ("Mr. Tepper" and together with the
Manager, collectively, the "Reporting Persons") on August 26,
1996, as amended by Amendment No. 1 filed on September 26,
1996, Amendment No. 2 filed on January 28, 1997, Amendment No.
3 filed on April 7, 1997 and May 13, 1997 (the "Schedule 13D"),
relates to the common stock of Inamed Corporation (the
"Company"). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the
Schedule 13D. The Schedule 13D is hereby amended and
supplemented as follows:
Item 5.Interest in Securities of the Issuer
As previously reported in the Schedule 13D and Amendment
No. 4 thereto, the Partnership, Palomino and Ferd agreed to
purchase, in the aggregate, $20,500,000 principal amount of
the 11% Secured Convertible Notes due 1999 of the Company.
On May 23 and 29, 1997, the purchases and sales of the Notes
were completed. Giving effect to the transactions
contemplated in that certain Letter Agreement, dated February
27, 1997, between the Company and the holders of the Notes
(the "Letter Agreement"), the Partnership, Palomino and Ferd
may be deemed to hold $5,724,581.72, $4,657,802.29 and
$1,314,758.86 principal amount of the Notes, respectively.
Based upon the potential conversion of the Notes and a closing
volume weighted average trading price of $6.0256 for the
Shares as reported on the Bloomberg Nasdaq Market Reporting
System for the 10-day period ending June 11, 1997, the
Partnership, Palomino and Ferd may be deemed to have
beneficial ownership (as a result of their ownership of the
Notes) of 1,117,698, 909,414 and 256,700 Shares, respectively.
In addition, the Partnership, Palomino and Ferd may be deemed
to hold Warrants representing the right to purchase 469,687,
382,161 and 107,872 Shares, respectively.
As of the date hereof, the Partnership, Palomino, Ferd
and Reliance may deemed to have beneficial ownership of
2,071,404, 1,548,763, 371,316 and 86,849 Shares,
respectively.
(a) This statement on Schedule 13D relates to 4,078,332
Shares may be deemed to be beneficially owned by the
Reporting Persons, which constitute approximately 35.61%
of the issued and outstanding Shares. The change in the
percentage of the issued and outstanding Shares deemed
to be beneficially owned by the Reporting Persons is due
solely to an adjustment of the conversion price of the
Notes based on the recent trading history of the Shares.
Since the filing of Amendment No. 4 to the Schedule 13D,
the Reporting Persons have not changed their beneficial
ownership of Notes, Warrants or Shares.
(b) The Manager may be deemed to have sole voting and
dispositive power with respect to 4,078,332 Shares. Mr.
Tepper may be deemed to have sole voting and dispositive
power with respect to 4,078,332 Shares.
(c) Not applicable.
(d) Not applicable.
(e)Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer
On June 10, 1997, the Manager, on behalf of the
Partnership, Ferd and Palomino, gave notice to the Company of
certain defaults under the Indenture (the "Default Letter") (a
copy of which is attached hereto as Exhibit A).
On June 11, 1997, counsel to the Manager, sent a letter
to the Company objecting to the recently-adopted rights plan
(the "Objection Letter")(a copy of which is attached hereto as
Exhibit B).
Except as set forth above, there exist no contracts,
arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2 and between such
persons and any persons with respect to any securities of the
Company, including but not limited to transfer or voting of
any securities, finders' fees, joint ventures, loan or option
agreements, put or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7.Material to Be Filed as Exhibits
Exhibit A:Default Letter
Exhibit B: Objection Letter
Exhibit C: Letter Agreement<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: June 12, 1997
Appaloosa Management L.P.
By:Appaloosa Partners Inc.,
Its General Partner
By:/s/ David A. Tepper
David A. Tepper
President
David A. Tepper
/s/ David A. Tepper <PAGE>
EXHIBIT INDEX
ExhibitExhibit NamePage
ADefault Letter 8
B Objection Letter 10
C Letter Agreement [Incorporated by
reference to Exhibit 1
to the Amendment No. 2
to the Schedule 13D of
SC Fundamental Inc., et
al. filed March 4, 1997.]<PAGE>
EXHIBIT A
Appaloosa Management L.P.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
June 10, 1997
VIA TELEFACSIMILE AND CERTIFIED MAIL,
RETURN RECEIPT REQUESTED
INAMED Corporation
3800 Howard Hughes Parkway, Suite 900
Las Vegas, Nevada 89109
Attention: Mr. Donald K. McGhan, President
Santa Barbara Bank & Trust, Trustee
1021 Anacapa Street
Santa Barbara, California 93101
Attention: Jay Donald Smith, Esq.
Gentlemen:
Reference is made to the Indenture between INAMED
Corporation (the "Company") and Santa Barbara Bank and Trust,
as Trustee (the "Trustee"), dated as of January 2, 1996, as
amended (the "Indenture"). Capitalized terms used but not
otherwise defined herein shall have the respective meanings
ascribed to them in the Indenture. The undersigned
(collectively, the "Appaloosa Partnerships") collectively hold
in excess of 50% in principal amount of the Outstanding
Securities.
This letter shall constitute a "Notice of Default" under
Section 4.1(3) of the Indenture and you are hereby notified
that there have occurred and are continuing defaults by the
Company in the performance of its agreements and covenants
contained in the following sections of the Documents:
Sections 8.6, 8.16, 8.18 and 12.2 of the Indenture and Section
2.18 of the Note Purchase Agreement. In particular, for the
year ended December 31, 1996 and the quarters therein and for
the quarter ended March 31, 1997, the Company was in default
in the performance or observance of the terms, provisions and
conditions of (i) Section 8.6 of the Indenture relating to the
timely payment of taxes, (ii) Section 8.16 requiring that the
Operating Profit of the Company for such period be in excess
of $10.0 million and in excess of $2.5 million and $2.75
million for the quarters ended June 30 and September 30, 1996,
(iii) Section 8.18 requiring the Company to deliver within 120
days after the end of each fiscal year of the Company a
certificate regarding defaults in the performance and
observance of any terms, provisions and conditions of Sections
8.4 to 8.17 of the Indenture, (iv) Section 12.2 requiring the
Company to deliver opinions regarding the Collateral, and (v)
Section 2.18 of the Note Purchase Agreement requiring the
Company to apply the proceeds from the issuance of the
Securities in accordance with clauses (iii) and (iv) of such
Section 2.18. The Appaloosa Partnerships hereby require that
the foregoing breaches be remedied immediately. Notice is
also hereby given that an Event of Default has occurred and is
continuing under Section 4.1(5) of the Indenture relating to
the entry of a judgment against the Company in excess of $1
million. By reason of the existence and continuance of the
foregoing defaults, the Company has been in continuous default
under the Indenture since at least January 1, 1997 and,
accordingly, the Applicable Rate of interest payable on the
principal amount of the Securities is required to be 14.50%
per annum from and after January 1, 1997, until the date the
foregoing defaults are no longer continuing.
Nothing contained in this notice shall be deemed to
limit, waive, release or modify the rights and remedies of the
holders of Securities in any way.
Very truly yours,
APPALOOSA INVESTMENT LIMITED PARTNERSHIP I
FERD L.P.
PALOMINO FUND LTD.
By:Appaloosa Management L.P.,
as general partner or investment
adviser
By: Appaloosa Partners Inc.,
as general partner
By:/s/ James E. Bolin
James E. Bolin
Vice President
cc:T.R. Maloney, Esq.
Nida & Maloney
Ilan K. Reich, Esq.
Olshan Grundman Frome & Rosenzweig LLP
<PAGE>
EXHIBIT B
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004 - 1980
June 11, 1997
Ilan K. Reich, Esq.
Olshan Grundman Frome & Rosensweig LLP
505 Park Avenue
New York, NY 10022
RE:Inamed Corporation (the "Company")
Dear Ilan:
On behalf of our client, Appaloosa Management L.P.
(together with Appaloosa's affiliates, "Appaloosa"), we are
writing to express our outrage with the Board of Directors'
decision to adopt a discriminatory Shareholder Rights Plan
(the "Plan") designed specifically to diminish the value of
Appaloosa's investment in the Company. Our client simply will
not tolerate any unilateral action by the Board that seeks to
undermine its contractual and legal rights and destroy the
value of its investment. You must know, in this regard, that
a purported rights plan which operates to destroy the existing
rights and values of security-holders in the securities which
they already own is plainly invalid.
Similarly patently invalid, as you also must know, are
the various "continuing director" provisions, designed solely
to protect an incumbent management and Board in the present
case, a management and Board with the sorriest of records
from any threat to their incumbency and perquisites. There is
no authority that we know of that upholds such provisions, and
the statement in your letter to shareholders which suggests
that over 2000 companies have plans of the nature that your
client has adopted is a falsehood. Similarly false, as you
must be aware, is the statement in your press release that the
plan "will have no effect on lawful proxy solicitation
activity."
Your client has now chosen to compound its effort to
destroy the value of Appaloosa's investment with statements
that you must know are false with respect to our client and
its objectives. As you know, our client has publicly stated
in its Schedule 13D, and repeatedly advised your client, that
it has no present intention of seeking to acquire the Company,
and to date Appaloosa's actions have been entirely consistent
with that intent. Appaloosa has no hidden agenda; it merely
seeks to ensure that the Company is properly managed -- as it
has not been in the past. In this regard, Appaloosa has
consistently advised your client that Appaloosa believes the
Company has not conducted its business affairs in accordance
with sound corporate practices as evidenced by, among other
things, the various defaults identified in the letter of
Appaloosa to the Company of June 10, the failure of the
Company to retain experienced senior executive officers, the
failure of the Company to maintain adequate inventory and
expense controls, the failure of the Company to hold any
shareholders meetings for three years and the existence of
apparent conflicts of interest. The provisions of the rights
plan are plainly intended to eliminate any accountability of
management to investors for this lack of performance. While
we can understand why management fears investor scrutiny, its
adoption of the "poison pill," rather than protecting
shareholders' investment in the Company, as one of your
releases fatuously states, serves only to further impair it.
We also find it repugnant that your client would adopt
this plan while it was in on-going negotiations to obtain
waivers and indulgences from Appaloosa in order to avoid a
financial crisis. This reckless, irresponsible and
duplicitous behavior by your client has precipitated the very
crisis the Company and Appaloosa were seeking to avoid as this
action left Appaloosa with no choice but to notify the Company
and the trustee of the existence of defaults under the
Indenture. As you know, Appaloosa has not as of yet
accelerated the senior notes although it certainly has the
power and right to do so. If the Company desires to reopen
discussions with Appaloosa, the Company should rescind the
rights plan as evidence of its intention to resume good faith
negotiations with a view towards resolving the outstanding
defaults. We suggest that you remind the Board members that
fiduciary duties are owed to all stockholders, including those
with the largest economic stake in the Company, and not to an
incumbent management with a far smaller stake.
Pending restoration of the status quo ante, we assume
that the Company will comply with its on-going covenants and
agreements contained in the Indenture for the senior
convertible notes, including covenants relating to the sale,
transfer and assignment of assets and the collateral securing
the obligations of the Company to the holders of those notes.
Appaloosa will take whatever steps it believes are necessary
to ensure the Company's compliance with such covenants,
including seeking judicial relief if necessary.
Very truly yours,
/s/Robert C. Schwenkel
Robert C. Schwenkel
RCS/dz
cc: David Tepper
