<PAGE>
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) May 31, 1995
------------
THE GRAND UNION COMPANY
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 33-59438 22-1518276
- --------------------------------------------------------------------------------
(State of Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.
201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 890-6000
----------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 3. BANKRUPTCY OR RECEIVERSHIP
On May 31, 1995, the United States Bankruptcy Court for the District
of Delaware, entered an order in the case styled IN RE: THE GRAND UNION COMPANY
ALSO D/B/A BIG STAR, Chapter 11 Case No. 95-84 (PJW) confirming the Second
Amended Chapter 11 Plan of Reorganization of The Grand Union Company ("Grand
Union" or the "Company"), dated April 19, 1995, as modified (the "Plan").
The effective date on which the Plan will be consummated (the
"Effective Date") is anticipated to occur on or about June 15, 1995. The
following summary of the material features of the Plan is qualified in its
entirety by reference to the Plan, a copy of which is filed as an Exhibit to
this report. Capitalized terms used and not defined herein have the respective
meanings ascribed to such terms in the Plan.
1. On or about the Effective Date, Senior Note Claims (equal to the
aggregate face amount of the 11 1/4% Senior Notes due 2000 and the 11 3/8%
Senior Notes due 1999, plus accrued but unpaid interest and interest on overdue
interest as of the Effective Date) will be exchanged for up to $595,475,922
aggregate principal amount of new 9-year senior notes (the "New Senior Notes").
The New Senior Notes will be unsecured and will bear interest at 12% per annum
from September 1, 1995.
2. On or about the Effective Date, the 12 1/4% Senior Subordinated
Notes due 2002, the 12 1/4% Senior Subordinated Notes due 2002, Series A and the
13% Senior Subordinated Notes due 1998 will be cancelled, and the holders
thereof will receive 100% of the 10,000,000 shares of new common stock (the "New
Common Stock") issued under the Plan. All of the old common stock of Grand
Union that is outstanding immediately prior to the Effective Date will be
cancelled.
3. On the Effective Date, Grand Union will enter into an amended
and restated bank facility (the "Amended and Restated Bank Facility") consisting
of a revolving credit facility of up to $100,000,000 and a term loan facility of
$104,144,371, of which amount $39,144,371 represents previously borrowed funds
and $65,000,000 represents funds to be borrowed on the Effective Date. The
Amended and Restated Bank Facility will be secured by a lien and security
interest in all of the tangible and intangible assets of the
Company and its subsidiaries.
-2-
<PAGE>
4. With respect to each Allowed Interest Rate Protection Agreement
Claim, at the sole option of Grand Union, to be exercised on the Effective Date:
(i) the legal, equitable and contractual rights to which the Allowed Interest
Rate Protection Agreement Claim entitles the holder of such claim will be
unaltered by the Plan and Grand Union shall, on the Effective Date, cure any
defaults with respect thereto; or (ii) on the Effective Date, the holder of an
Allowed Interest Rate Protection Agreement Claim will receive a cash payment
equal to 100% of such Allowed Interest Rate Protection Agreement Claim.
5. The rights of trade creditors for unpaid prepetition trade claims
will be unimpaired.
6. Holders of Allowed General Unsecured Claims will be entitled to
receive payment in full in an amount equal to 100% of such Allowed General
Unsecured Claim. General Unsecured Claims include, among other things, cerrtain
fees and expenses of the Indenture Trustees.
7. Grand Union will provide warrants to purchase a total of 900,000
shares of New Common Stock of Grand Union (the "Warrants") to holders of the
Grand Union Capital Corporation ("Capital") 15.00% Senior Zero Coupon Notes due
2004 and the Capital 16.50% Senior Subordinated Zero Coupon Notes due 2007, in
settlement of various actions brought by the Official Committee of Unsecured
Creditors of Capital. Two series of Warrants, each having a term of five years
from the Effective Date, will be issued. Series 1 Warrants will consist of
300,000 Warrants with an exercise price of $30 per share of New Common Stock and
Series 2 Warrants will consist of 600,000 Warrants with an exercise price of $42
per share of New Common Stock.
8. On the Effective Date, each of the existing members of the Board
of Directors will be deemed to have resigned. The initial post-reorganization
Board of Directors of Grand Union will consist of seven (7) members selected by
the members of the Official Committee which were members of the Informal
Committee of certain holders of Senior Subordinated Notes and will be subject to
approval of the Bankruptcy Court.
9. On the Effective Date, the Company will adopt a restated
certificate of incorporation (the "Restated Certificate of Incorporation"), the
principal effects of which are: (i) to authorize 30,000,000 shares of New Common
Stock and 10,000,000 shares of Preferred Stock; (ii) to provide for
cancellation of the old common stock; and (iii) to prohibit the issuance of
non-voting equity
-3-
<PAGE>
securities, as and to the extent required by section 1123(a)(6) of the
Bankruptcy Code.
Prior to the Effective Date, pursuant to its certificate of
incorporation, Grand Union's authorized capital stock consists of 900 shares of
common stock (of which 801.5 shares are issued and outstanding). As described
above, on the Effective Date, Grand Union's certificate of incorporation will be
restated, the old common stock of Grand Union that is outstanding immediately
prior to the Effective Date will be cancelled and New Common Stock will be
issued to certain creditors of Grand Union. Under the Restated Certificate of
Incorporation, Grand Union's authorized capital stock will consist of 30,000,000
shares of New Common Stock (of which 10,000,000 shares will be issued under the
Plan to holders of the Company's Senior Subordinated Notes) and (ii) 10,000,000
shares of preferred stock, none of which will be issued and outstanding upon
consummation of the Plan. The Company will reserve for issuance the 900,000
shares of New Common Stock issuable upon exercise of the Warrants issued to the
holders of the Capital Zero Notes.
An unaudited balance sheet of the Company as of May 27, 1995, is filed
as an Exhibit to this report.
-4-
<PAGE>
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
2.1 Second Amended Chapter 11 Plan of Reorganization of
The Grand Union Company, filed with the United States
Bankruptcy Court, District of Delaware on April 19,
1995, incorporated by reference to Exhibit T3E1 to
The Grand Union Company's Form T-3 dated May 8, 1995
(the "Grand Union T-3").
4.1 Form of Indenture, dated as of _______, 1995, between
The Grand Union Company, as Issuer and IBJ Schroder
Bank & Trust Company, as Trustee for the
12% Senior Notes due September 1, 2004, including form
of the 12% Senior Note due 2004, incorporated by
reference to Exhibit T3C to the Grand Union T-3.
99.1 Unaudited Consolidated Balance Sheet as of May 27,
1995.
-5-
<PAGE>
SIGNATURES
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 thereunto duly authorized.
THE GRAND UNION COMPANY
-----------------------
(Registrant)
Date: June 15, 1995 /s/ Kenneth R. Baum
------------------------
Kenneth R. Baum
Senior Vice President,
Chief Financial Officer
and Secretary (Principal
Financial Officer and
Principal Accounting Officer)
-6-
<PAGE>
THE GRAND UNION COMPANY
CONSOLIDATED BALANCE SHEET
(unaudited - subject to year-end adjustments)
May 27,
1995
-------
(in thousands)
ASSETS
Current assets:
Cash and temporary cash investments $ 81,977
Receivables 17,654
Inventories 185,583
Other current assets 13,685
----------
Total current assets 298,899
Property, net 421,055
Goodwill, net 543,010
Beneficial leases, net 26,317
Deferred financing fees, net 43,217
Other assets 36,612
----------
$1,369,110
----------
----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 104,603
Accrued interest 23,927
Accrued liabilities 50,846
----------
Total current liabilities 179,376
----------
Other noncurrent liabilities 55,134
----------
Liabilities Subject to Compromise 1,796,858
----------
Commitments and contingencies
Total redeemable stock subject to compromise 174,199
----------
Nonredeemable common stock and stockholders' deficit:
Common stock, $50,000 par value 40,077
Accumulated deficit (876,534)
----------
Total nonredeemable common stock and
stockholders' deficit $1,369,110
----------
----------
LIABILITIES SUBJECT TO COMPROMISE
Long-term debt $1,412,202
Revolver 54,000
Interest payable 68,060
Capital leases 147,147
Accounts payable 44,937
Noncurrent liabilities 50,637
Accrued liabilities 19,875
----------
TOTAL $1,796,858
----------
----------
