SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15 (d) of
Securities Exchange Act of 1934
Date of Report: (Date of Earliest Event Reported):
April 4, 1996
GROSSMAN'S INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State of Other Jurisdiction of Incorporation)
1-542 38-0524830
(Commission File No.) (I.R.S. Employer
Identification No.)
45 Dan Road
Canton, Massachusetts 02021
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 830-4000
Item 2. Acquisition or Disposition of Assets.
On April 4, 1996, the Board of Directors of Registrant
approved the closing of 60 retail stores in nine Northeastern
states, the liquidation of the inventories and equipment at such
store locations and the sale of owned real estate associated with
such store locations.
2.1 Liquidation of Inventory. Registrant entered into an
Agency Agreement with Gordon Brothers Partners, Inc. ("Gordon
Brothers"), dated March 29, 1996, for the liquidation of
inventory at approximately 60 closed "Grossman's Stores" located
in nine Northeastern states. Pursuant to the Agency Agreement,
Gordon Brothers will pay Registrant a guaranteed amount of
approximately $30 million based on a physical inventory by an
outside inventory tabulating firm. After recovery from the
liquidation of inventories of the guaranteed amount plus expenses
and a profit margin, proceeds will be divided 70% to Registrant
and 30% to Gordon Brothers. The funds received by Registrant
under the Agency Agreement are being used for the payment of
vendors and general corporate purposes. The terms of the
Agreement were approved after solicitation of competitive bids
and consultation with independent advisors.
2.2 On April 4, 1996, Registrant's wholly owned subsidiary,
GRS Realty Company, Inc., entered into a series of agreements,
including a loan agreement, whereby Combined Investors L.L.C.
agreed to lend up to $32.6 million to GRS Realty Company, Inc.
Prior to the agreement Registrant formed GRS Holding Company,
Inc. ("GRS Holding"), and GRS Realty Company, Inc. ("GRS
Realty"), as Special Purpose Vehicles and transferred real estate
sites to GRS Realty, including 55 closed store sites, in exchange
for stock in GRS Realty. All of the outstanding stock in GRS
Realty was then contributed to GRS Holding. Combined Investors
L.L.C. has advanced $27.6 million to GRS Realty against the
maximum loan of $32.6 million secured, inter alia, by the real
property held by, and the stock of, GRS Realty. The loan is
guaranteed by GRS Holding. Funding of the balance of the notes
is contingent upon elimination of certain clouds on title to
certain real properties, that were not cleared of record when the
relevant indebtedness was paid, determination of furniture,
fixtures and equipment available for sale and other ministerial
issues. The notes for $28.6 million are for a term of two years
and bear interest at a rate of 15% per annum, with proceeds from
the sale of properties applied to satisfaction of the notes. In
addition, a $4 million convertible note is interest free and
provides for conversion of the note into Common Stock of the
Registrant at $0.75 per share after maturity or at such time as
payments on the Note are tendered.
Closed store sites are being offered for sale and proceeds
from sales will be applied to satisfaction of the notes as
provided in the Loan Agreement.
Item 5. Other Events
On April 10, 1996, Registrant acquired all of its remaining
outstanding 14% Debentures, due 1996, and has surrendered such
Debentures to the trustee for cancellation, thereby satisfying in
full Registrant's obligations for principal, accrued interest and
otherwise under the Indenture for such Debentures. Debentures
held by one investor in the principal amount of $1.1 million were
acquired for such principal amount. The remaining debentures in
the principal amount of $15,101,000 were acquired for an $11
million payment, three year notes for $3 million with deferable
interest at 10% and convertible into Common Stock of the
Registrant at $1.30 per share and three year Notes for $2,780,156
with deferable interest at 15%.
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.
GROSSMAN'S INC.
By: /s/ Richard E. Kent
----------------------
Richard E. Kent
Vice President, Secretary
and General Counsel
Dated: April 16, 1996
