SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 1)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
DONNKENNY, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
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(Title of Class of Securities)
258006204
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(CUSIP Number)
DANIEL H. LEVY HARRY A. KATZ
C/O DONNKENNY, INC. OLD STONE HIGHWAY
1411 BROADWAY AMAGANSETT, NY 11930
NEW YORK, NY 10018
WITH A COPY TO
DENNIS J. BLOCK
CADWALADER, WICKERSHAM & TAFT
100 MAIDEN LANE
NEW YORK, NY 10038
(212) 504-5555
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
JANUARY 8, 2001
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(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 Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box / /.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) 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
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).
CUSIP NO. 258006204
<PAGE>
SCHEDULE 13D
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CUSIP NO. 258006204
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Daniel H. Levy
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(A)/ / (B) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
1,424,888
NUMBER OF
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 751,859
PERSON
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WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,424,888
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions) / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.3%
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14 TYPE OF REPORTING PERSON (See Instructions)
IN
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<PAGE>
SCHEDULE 13D
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CUSIP NO. 258006204
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Harry A. Katz
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(A) / / (B) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
0
NUMBER OF
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 673,069
PERSON
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WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
673,069
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See
Instructions) / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.4%
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14 TYPE OF REPORTING PERSON (See Instructions)
IN
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<PAGE>
ITEM 1. SECURITY AND ISSUER
This Amendment No. 1 to the Schedule 13D filed on behalf of Daniel
H. Levy ("Levy") and Harry A. Katz ("Katz") (each, a "Reporting Person" and
collectively the "Reporting Persons") on November 6, 2000, is being filed in
connection with changes in the Reporting Persons' beneficial ownership of the
shares of Common Stock, par value $0.01 per share (the "Common Stock"), of
Donnkenny, Inc., a Delaware corporation (the "Corporation").
This Amendment No. 1 amends Items 1, 2, 3, 5, 6 and 7 of Schedule
13D.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2 is amended and restated in its entirety as follows:
(a) This statement is being filed by Daniel H. Levy ("Levy") and
Harry A. Katz ("Katz") (each, a "Reporting Person" and collectively the
"Reporting Persons").
(b) The business address of each Reporting Person is:
Daniel H. Levy
c/o Donnkenny, Inc.
1411 Broadway
New York, NY 10018
Harry A. Katz
Old Stone Highway
Amagansett, NY 11930
(c) The principal occupation of Levy is Chairman and CEO of the
Corporation. The principal occupation of Katz is managing partner of Retail
Resources, L.P., president of 7925 West 2nd Corp. and president of Bryhar
Corporation. Both Katz and Levy are directors of the Corporation.
(d) During the past five years, neither Reporting Person has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the past five years, neither Reporting Person has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which he 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.
(f) Each Reporting Person is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is amended and restated in its entirety as follows:
Each Reporting Person used $147.159.50 of his personal funds to
purchase 294,319 shares of Common Stock from Amber Arbitrage LDC.
Pursuant to a Stock Purchase Agreement dated December 21, 2000 among
Katz, Levy and Wolf Popper, LLP (the "Stock Purchase Agreement"), the
Corporation issued 750,000 shares of Common Stock to an escrow agent to fund a
portion of a settlement fund that has been established pursuant to a Stipulation
of Settlement, dated October 7, 1999, entered into between the Corporation and
the lead plaintiffs in an action entitled In re Donnkenny. Inc., Securities
Litigation, 96-CV-8452 (MGC), filed in the United States District Court for the
Southern District of New York. Under the Stock Purchase Agreement, Katz and Levy
each used $101,250.00 of his personal funds to purchase 375,000 shares of Common
Stock each from the escrow agent. The purchase of the Common Stock by Katz and
Levy closed on January 8, 2001.
ITEM 4. PURPOSE OF TRANSACTION.
No Change.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is amended and restated in its entirety as follows:
(a) According to the Corporation's Quarterly Report on Form 10-Q for
the quarter ended September 30, 2000, as of November 13, 2000, the Corporation
had issued and outstanding 3,617,417 shares of Common Stock. The Corporation
issued an additional 750,000 shares in connection with the transaction discussed
in the second paragraph of Item 3 above.
Levy is the beneficial owner of 1,424,888 shares of Common Stock or
32.3% of the outstanding Common Stock, consisting of 708,069 shares of Common
Stock owned directly, 43,750 shares of Common Stock which Levy has a right to
acquire pursuant to presently exercisable stock options, 669,319 shares of
Common Stock owned by Katz which Levy has the right to direct the vote of
pursuant to the Letter Agreement discussed in Item 6 below, and 3,750 shares of
Common Stock which Katz has a right to acquire pursuant to presently exercisable
stock options which, upon Katz's exercise, Levy would have the right to direct
the vote of pursuant to the Letter Agreement discussed in Item 6 below.
Katz is the beneficial owner of 673,069 shares of Common Stock or
15.4% of the outstanding Common Stock, consisting of 669,319 shares of Common
Stock owned directly and 3,750 shares of Common Stock which Katz has a right to
acquire pursuant to presently exercisable stock options.
(b) Levy has the sole power to vote, or to direct the vote of,
1,424,888 shares of Common Stock, and shared power to vote, or to direct the
vote of, 0 shares of Common Stock; and sole power to dispose of, or to direct
the disposition of, 751,819 shares of Common Stock and shared power to dispose
of, or to direct the disposition of, 0 shares of Common Stock. Katz has the sole
power to vote, or to direct the vote of, 0 shares of Common Stock, and shared
power to vote, or to direct the vote of, 0 shares of Common Stock; and sole
power to dispose of, or to direct the disposition of, 673,069 shares of Common
Stock and shared power to dispose of, or to direct the disposition of, 0 shares
of Common Stock.
(c) Except as described in Item 3 above, there have been no
transactions of shares of Common Stock effected within the past 60 days by Levy
or Katz.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 is amended and restated in its entirety as follows:
On January 8, 2001, Levy and Katz entered into a Letter Agreement
whereby Katz agreed that, for so long as Levy was the Chief Executive Officer of
the Corporation, Katz would vote all of his shares of Common Stock and preferred
stock of the Corporation as directed by Levy.
Other than as set forth above, to the best knowledge of each
Reporting Person, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) between such Reporting Person and any other
persons with respect to any securities of the Issuer, including but not limited
to transfer or voting of any such securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies, or a pledge or
contingency the occurrence of which would give another person voting power over
the securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Joint Filing Agreement (incorporated by reference to
Exhibit 99.(A) to the Schedule 13D jointly filed by Daniel H. Levy and Harry A.
Katz on November 6, 2000 relating to Donnkenny, Inc.)
Exhibit B - Letter Agreement dated January 8, 2001 between Daniel
H. Levy and Harry A. Katz (filed herewith)
Exhibit C - Stock Purchase Agreement dated December 21, 2000 among
Wolf Popper, LLP, Harry A. Katz and Daniel H. Levy (filed herewith)
<PAGE>
Signature.
After reasonable inquiry and to the best of each Reporting Person's
knowledge and belief, each Reporting Person certifies that the information set
forth in this statement is true, complete and correct.
Date: January 17, 2001
/s/ Daniel H. Levy
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Daniel H. Levy
/s/ Harry A. Katz
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Harry A. Katz
<PAGE>
HARRY A. KATZ
Old Stone Highway
Amagansett, NY 11930
January 8, 2001
Daniel H. Levy
1411 Broadway
New York, NY 10018
Dear Dan,
This will confirm our agreement regarding the voting of shares I may own
from time to time of Donnkenny, Inc. common or preferred stock. I hereby agree
that for such time as you are Chief Executive Officer of Donnkenny, Inc., I will
vote my shares of Donnkenny, Inc. stock in such manner as you may direct.
Sincerely yours
/s/ Harry A. Katz
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Harry A. Katz
Confirmed and Agreed:
/s/ Daniel H. Levy
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Daniel H. Levy
<PAGE>
STOCK PURCHASE AGREEMENT
Dated December 21, 2000
between
WOLF POPPER, LLP
(the "Escrow Agent")
and
Harry A. Katz and Daniel H. Levy
(the "Investors")
INTRODUCTION
WHEREAS , Donnkenny, Inc. (the "Company") will issue 750,000 shares
of the Company's Common Stock, $.01 par value per share (the "Shares") to the
Escrow Agent on behalf of the Donnkenny, Inc. Settlement Fund to fund a portion
of a Settlement Fund that has been established pursuant to a Stipulation of
Settlement, dated October 7, 1999, entered into between the Company and the Lead
Plaintiffs (the "Stipulation") in an action entitled In re Donnkenny. Inc.,
Securities Litigation, 96-CV-8452 (MGC), filed in the United States District
Court for the Southern District of New York (the "Action"); and
WHEREAS, the Investors wish to purchase the Shares for a purchase
price of Twenty-Seven ($0.27) cents a share or a total consideration of Two
Hundred Two Thousand Five Hundred ($202,500) dollars and the Escrow Agent is
willing to sell the Shares subject to the terms of this Agreement;
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, the parties agree as follows;
1. INVESTORS REPRESENTATIONS: Investors are either an officer and/or
director of the Company and are not relying on any information furnished by the
Escrow Agent or any other person in making their decision to purchase the
Shares. The Investors represent that they have knowledge of the rules relating
to the sale of the Shares and understand that the Shares may only be traded in
compliance with applicable federal and state securities laws. The Investors
represent that they possess the financial resources to bear the risk of economic
loss with respect to their purchase of the Shares; have such knowledge and
experience in financial and business matters that they are able to evaluate the
merits and make an informed investment decision with respect to the purchase of
the Shares; that they qualify as an "accredited investor" as such term is
defined in the Securities Act of 1933; and that they are experienced in
investing in securities of companies. The Investors release the Escrow Agent
front all claims arising from the purchase and sale of the Shares, except for
specific performance of this Agreement.
2. THE INVESTMENT: Subject to the terms and conditions hereof, and
in reliance on the Investor Representations contained in paragraph 1 above, the
Escrow Agent shall, subject to receipt of full payment for the Shares, sell to
the Investors on behalf of the Settlement Fund, the Shares at a purchase price
equal to Twenty-Seven ($0.27) cents a share or a total consideration of Two
Hundred Two Thousand Five Hundred ($202,500) dollars (the "Purchase Price"). The
Investors shall pay the Purchase Price to the Escrow Agent in full at the
Closing referred to in paragraph 3 below by certified or bank check payable to
the Escrow Agent or by wire accounts designated in writing by the Escrow Agent.
3. THE CLOSING: The purchase and sale of the Shares being purchased
by the Investors shall take place at the offices of Mintz & Gold LLP, 444 Park
Avenue South, New York, New York 10016, at 10:00am local time on January 9,
2001, or at such other time and date as the parties shall mutually agree upon in
writing. At the Closing, the Escrow Agent shall deliver to the Investors (a) the
Stock Certificate for the Shares issued to the Escrow Agent and (b) stock
transfer instructions and documentation, satisfactory to the Investors and their
counsel, transferring Three Hundred Seventy Five Thousand (375,000) shares of
the Shares to Harry A. Katz and Three Hundred Seventy Five Thousand (375,000)
shares of the Shares to Daniel H. Levy. The Stock Certificate for the Shares and
the transfer instructions and documentation shall be held in escrow by Mintz &
Gold pending confirmation of receipt of the Purchase Price (if by wire
transfer).
4. CONDITIONS OF THE CLOSING: The obligations of the Investors to
purchase the Shares pursuant to the terms of this Agreement shall be subject to
the condition that the Escrow Agent shall have delivered to the Investors the
Stock Certificate and instructions referred to in paragraph 3 above. The
obligations of the Escrow Agent to sell the Shares to the Investors shall be
subject to the condition that the Escrow Agent shall have received the Purchase
Price for the Shares.
5. TERMINATION: This Agreement shall terminate if the transactions
contemplated hereunder have not closed by January 16. 2001.
6. MISCELLANEOUS: (a) All notices to a party hereunder shall be in
writing and shall be deemed to have been adequately given if delivered in
person, upon facsimile transmission with receipt acknowledged by the recipient's
facsimile transmission machine or by delivery by a recognized courier for
overnight delivery, or three days after having been mailed, certified mail,
return receipt requested, to such party at its address set forth below (or such
other address as a party may from time to time designate in writing to the other
party hereto).
To the Escrow Agent: Robert C. Finkel, Esq.
Wolf Popper LLP
845 Third Avenue
New York, NY 10021
To the Investors: Harvey Horowitz, Esq.
Mintz & Gold, LLP
444 Park Avenue South
New York, NY 10016
(b) No failure to exercise and no delay in exercising, on the part
of either party, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise or the exercise of any other right, power or privilege. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
(c) Except as hereinafter provided, this Agreement may be modified
or amended or any term or provision may be waived but only by a writing signed
by the parties hereto. No waiver of any term or provision shall be effective
unless made in the same manner as an amendment of such term or provision.
(d) All agreements, representations and warranties contained herein
or made in writing by or on behalf of the parties in connection with the
transactions contemplated shall, except where otherwise provided by their terms,
survive the execution and delivery of this Agreement, the Closing pursuant to
this Agreement, and any investigation at any time made by or on behalf of the
Investors.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. Any headings of paragraphs herein are
for convenience only and shall not control or affect the meaning or construct of
any of the provisions hereof.
(f) This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, successors and assigns,
excluding assignees of the Shares, but not including any purchaser thereof in
whose hands the Shares are not a restricted security as defined in Rule 144
under the Securities Act of 1933.
(g) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and date first above written.
Wolf Popper LLP
By: /s/ Robert C. Finkel
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/s/ Harry A. Katz
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Harry A. Katz
/s/ Daniel H. Levy
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Daniel H. Levy
Mintz & Gold LLP
By: /s/ Harvey Horowitz
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