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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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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 26, 1997
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DART GROUP CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-1946 53-0242973
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3300 75th Avenue, Landover, Maryland 20785
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 731-1200
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(Former name or former address, if changed since last report).
The exhibit index appears on page 4.
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Item 1. Changes in Control of Registrant
The discussion under Item 5 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5. Other Events
On September 26, 1997 Dart Group Corporation (the "Company") closed the
transactions contemplated in the Settlement Agreement dated August 16, 1997
(the "Settlement Agreement") with Robert, Gloria and Linda Haft. Although the
closing of the transactions comtemplated in the Settlement Agreement was
conditioned in part upon the completion of bankruptcy plans of reorganization
for the partnerships owning the Company's headquarters building in Landover, MD
(75th Avenue Associates Limited Partnership) and a warehouse leased by the
Company's subsidiary, Trak Auto Corporation (Trak Chicago Limited Partnership),
those bankruptcy plans were not closed. Instead, the Company acquired all of
Robert Haft's and Linda Haft's respective interests in such partnerships for a
purchase price of $4,400,000. The press release announcing the closing of the
transactions contemplated by the Settlement Agreement is incorporated by
reference and attached hereto as Exhibit 99.1.
The composition of the Company's Board of Directors has changed.
Richard B. Stone has become a director. Larry G. Schafran is no longer a
director. Press releases dated September 24, 1997 and October 2, 1997 relating
to the changed composition of the Board of Directors are incorporated by
reference and attached hereto as Exhibits 99.2 and 99.3, respectively.
Item 7. Financial Statements and Exhibits
Exhibit 99.1 Press Release, dated September 26, 1997, of
Dart Group Corporation
Exhibit 99.2 Press Release, dated September 24, 1997, of
Dart Group Corporation
Exhibit 99.3 Press Release, dated October 2, 1997, of Dart
Group Corporation
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SIGNATURE
Pursuant to the 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.
DART GROUP CORPORATION
By: /s/ Mark A. Flint
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Mark A. Flint
Senior Vice President and
Chief Financial Officer
Date: October 9, 1997
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DART GROUP CORPORATION
Form 8-K
Exhibit Index
Exhibit 99.1 Press Release, dated September 26, 1997, of
Dart Group Corporation
Exhibit 99.2 Press Release, dated September 24, 1997, of
Dart Group Corporation
Exhibit 99.3 Press Release, dated October 2, 1997, of Dart
Group Corporation
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
DART GROUP ANNOUNCES CLOSING OF PREVIOUSLY ANNOUNCED
SETTLEMENT WITH ROBERT, GLORIA AND LINDA HAFT
LANDOVER, Md., Sept. 26 / PRNewswire/ -- Dart Group Corporation
(Nasdaq: DARTA) today announced the closing of its previously announced
settlement with Robert, Gloria and Linda Haft.
The transactions that closed as part of the settlement between Dart
and Robert, Gloria and Linda Haft include the purchase by Dart from Robert,
Gloria and Linda Haft (or related parties) of 104,976 shares of Dart Class B
Common Stock and 81,556 shares of Dart Class A Common Stock; the termination of
options held or claimed by Robert, Gloria and Linda Haft to purchase a total of
283,750 shares of Dart Class A Common Stock; the termination of putative
options to purchase 15 shares of Dart/SFW Corp.; and the termination of a small
number of options to purchase shares of common stock of Trak Auto Corporation
and Crown Books Corporation. Dart paid Robert, Gloria and Linda Haft a total
of approximately $41 million in connection with these transactions.
Although the Settlement Agreement between Dart and Robert, Gloria and
Linda Haft contemplated that the closing of the settlement would occur in
conjunction with the completion of bankruptcy plans of reorganization for the
partnerships owning Dart's headquarters building in Landover, Md., and a
warehouse leased by Dart's subsidiary, Trak Auto Corporation, in Bridgeview,
Ill., those bankruptcy plans have not become effective. Instead, Dart paid an
additional $4.4 million to Robert and Linda Haft for their interests in these
two partnerships under a separate agreement.
Dart has not yet reached agreement with Ronald S. Haft regarding
possible supplemental settlement arrangements that had been contemplated in
connection with its settlement with Robert, Gloria and Linda Haft and these
bankruptcy plans of reorganization. Dart anticipates that the supplemental
settlement arrangements with Ronald S. Haft will include the release of funds
to Dart to offset $2.2 million of the payments to Robert and Linda Haft for
their partnership interests, though such agreement cannot be assured.
Dart is funding these settlement transactions with Robert, Gloria and
Linda Haft, and related expenses, with $50 million of proceeds from a private
placement of senior notes by its subsidiary, Shoppers Food Warehouse Corp.,
which was completed in June. A portion of the cost of those transactions may
ultimately be allocated to Trak Auto Corporation and, possibly, Crown Books
Corporation, which are subsidiaries of Dart. No such allocations have yet been
determined.
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The previously announced settlement discussions between Dart and
Herbert Haft have not produced a settlement agreement at this time, though
discussions are continuing. There can be no assurance that a settlement
agreement between Dart and Herbert Haft will be entered into or that, even if a
settlement agreement with Herbert Haft is entered into, that the settlement
transactions will close.
Dart is the majority owner of Trak Auto Corporation (Nasdaq: TRKA) and
Crown Books Corporation (Nasdaq: CRWN), and the sole owner of Shoppers Food
Warehouse Corp. and Total Beverage Corp.
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE
DART GROUP ANNOUNCES SHAREHOLDER ACTION
REGARDING BOARD COMPOSITION
Landover, MD... September 24, 1997 ... Dart Group Corporation (NASDAQ:
DARTA) today announced that it has received a copy of a "Instrument of Consent"
signed by Richard B. Stone (in his capacity as Voting Trustee with respect to
222,294 shares of Dart's Class B common stock which has been challenged in
litigation as not vesting Mr. Stone with the voting rights he purports to hold)
and by Herbert H. Haft (in his capacity as the holder of a purported proxy from
Ronald S. Haft to vote 172,730 shares of Dart's Class B common stock, which
shares are not outstanding if the Voting Trustee has the voting power he
claims) to remove Larry G. Schafran from Dart's Board of Directors and to
appoint Richard B. Stone to Dart's Board of Directors. The "Instrument of
Consent" also is signed by Sidney B. Silverman, nominally as "Plaintiff's
Counsel and Representative of holders of a majority in interest of Dart Class A
Shares."
The legal effect of this document is uncertain. Litigation that has
been pending in the Delaware Court of Chancery since October 1995 challenges
Mr. Stone's authority to act as the majority voting stockholder of Dart. Other
litigation pending in the Delaware Court of Chancery challenges Herbert H.
Haft's purported proxy. A Standstill Order issued by the Court states, "Until
further order of the Delaware Court of Chancery, Dart will not recognize any
stockholder action seeking to change the composition of the incumbent Board of
Directors of Dart, consisting of Herbert H. Haft, Ronald S. Haft, Larry G.
Schafran, Bonita A. Wilson and Douglas Bregman, or any of its subsidiaries."
The Court has not issued an order approving the removal of Mr. Schafran or the
appointment of Mr. Stone as directors of Dart.
Herbert Haft has told the Dart Board of Directors orally that he
believes the "removal act" was effective when taken and will ask the court to
order Dart to recognize the act as having been effective when taken.
Dart is the majority owner of Trak Auto Corporation (NASDAQ: TRKA) and
Crown Books Corporation (NASDAQ: CRWN), and the sole owner of Shoppers Food
Warehouse Corp. and Total Beverage Corp.
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EXHIBIT 99.3
FOR IMMEDIATE RELEASE
DART GROUP ANNOUNCES COURT RULING ON SHAREHOLDER ACTION
REGARDING BOARD COMPOSITION
Landover, MD . . . October 2, 1997 . . . Dart Group Corporation
(NASDAQ: DARTA) announced that the Delaware Court of Chancery has ruled that
the Court's December 1995 Standstill Order applicable to Dart does not prohibit
the replacement of Larry G. Schafran by Richard B. Stone on Dart's Board of
Directors.
This change in the composition of Dart's Board of Directors was
approved last week by Mr. Stone (in his capacity as Voting Trustee with respect
to 222,294 shares of Dart's Class B common stock which has been challenged in
litigation as not vesting Mr. Stone with the voting rights he purports to
hold) and by Herbert H. Haft (in his capacity as the holder of a purported
proxy from Ronald S. Haft to vote 172,730 shares of Dart's Class B common
stock, which shares are not outstanding if the Voting Trustee has the voting
power he claims).
After this change, Dart's Board of Directors consists of: Herbert H.
Haft, Chairman; Douglas M. Bregman; Ronald S. Haft; Richard B. Stone; and
Bonita A. Wilson.
Dart is the majority owner of Trak Auto Corporation (NASDAQ: TRKA)
and Crown Books Corporation (NASDAQ: CRWN), and the sole owner of Shoppers
Food Warehouse Corp. and Total Beverage Corp.
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