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
September 25, 1995
(Date of earliest event reported)
The Harvey Group Inc.
(Exact name of Registrant as specified in its charter)
New York 1-4626 13-1534671
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
600 Secaucus Road, Secaucus, New Jersey 07094
(Address of principal executive offices, including zip code)
201-865-3418
(Registrant's telephone number, including area code)
Item 5. Other Events.
On October 5, 1995, the Registrant issued a press
release announcing, among other things, that the Registrant has
signed a letter of intent providing for additional secured
debtor-in-possession credit support of $1,500,000. A copy of the
press release and letter of intent are attached as Exhibits 99.1
and 99.2, respectively, to this Form 8-K and are incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
(c.) Exhibits
Exhibit Number Description
99.1 Press Release dated October 5, 1995.
99.2 Letter of Intent, dated September 25,
1995, between The Harvey Group Inc. and
Harvey Acquisition Corp.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: October 5, 1995.
THE HARVEY GROUP INC.
By: /s/ Joseph J. Calabrese
Joseph J. Calabrese, Jr.
Vice President, Secretary,
Chief Financial Officer,
Chief Accounting Officer
EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release dated October 5, 1995.
99.2 Letter of Intent, dated September 25,
1995, between The Harvey Group Inc. and
Harvey Acquisition Corp.
___________________________________________________________________________
EXHIBIT 99.1
Contact:
Arthur Shulman
President & CEO
Joseph J. Calabrese
Vice President & CFO
The Harvey Group Inc.
Tel. (201) 865-3418
Fax (201) 865-0342
For Immediate Release
The Harvey Group Inc.
Announces Financing of $1,500,000
Secaucus, NJ--October 5, 1995--The Harvey Group
Inc. (the "Company") announced today that the Company has
signed a letter of intent with an investor group, which
sets forth the terms and conditions of an agreement to
provide additional secured debtor-in-possession credit
support of $1,500,000. It is anticipated that these funds
will be used to fund a reorganization plan and the
Company's emergence from Chapter 11.
The Company has already received an initial
installment, and expects the balance of the funds on or
before November 1, 1995. The $1,500,000 may be converted
to equity upon the confirmation of a plan of reorganization
by the Bankruptcy Court, or at a later date.
Art Shulman, president stated, "I am pleased that
the Company is now on the road towards a resolution of its
financial problems and that we will now be able to refocus
our efforts and resources on our business and the upcoming
holiday season."
Based in Secaucus, New Jersey, Harvey Electronics
is a specialty retailer of high-quality audio/video consum-
er electronics and home theater products with six stores in
the Metropolitan New York area.
____________________________________________________________________________
EXHIBIT 99.2
September 25, 1995
Mr. Michael E. Recca
Recca and Company, Inc.
c/o Harvey Acquisition Corp.
20 Exchange Place, Suite 2200
New York, NY 10005
Re: Harvey Electronics
Dear Mr. Recca:
The purpose of this letter to set forth terms
and conditions of an agreement in principal pursuant to
which Harvey Acquisition Corp, or its designee ("HAC")
will provide debtor-in-possession credit support, provide
the funding for a plan of reorganization, and make an
investment in The Harvey Group Inc., and Harvey Sound
Inc., (hereinafter collectively "Harvey").
Subject to the terms and conditions set forth
below, HAC agrees to invest $1.5 million in Harvey as
provided herein. HAC's investment will be made pursuant,
and is subject, among other things, to the following:
1. Harvey filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code in the
U.S. Bankruptcy Court for the Southern District of New
York (96 B 43360-61) on August 3, 1995 (the "Harvey
Bankruptcy"). By orders of the court dated August 8, and
August 28, 1995, Harvey obtained debtor-in-possession
financing from Congress Financial Corporation ("Con-
gress").
2. Harvey shall file a plan or reorganization
("POR"), in form and content acceptable to HAC.
3. The POR will provide, among other things,
for the following treatment of pre-petition claims:
a. The existing secured working capital
line with Congress Financial Corp., ($3 million) shall be
either replaced or continued;
b. The National Westminster Bank term
loan of $275,000 and the InterEquity Credit Corp. loans
of $600,000 may be converted to shares of registered
reorganized Harvey common stock, subject to the approval
of the lender and in amounts acceptable to HAC and debt-
or.
c. Unsecured creditors shall receive
registered shares of reorganized Harvey common stock in
amounts acceptable to HAC & Debtor.
d. Existing Harvey Shareholders, as of a
record date to be determined, shall receive shares of
reorganized Harvey common stock or warrants for such
shares in amounts acceptable to HAC and Debtor.
e. Real property lease cure amounts shall
be settled on terms acceptable to HAC.
f. Administrative and priority claims
will not exceed $125,000, exclusive of lease cures and
post petition accounts payable.
4. HAC may, at is option, convert the debt
owed to it by Harvey to reorganized Harvey common stock
in an appropriate ratio to the distributions described in
paragraphs 3(b),(c), and (d) above, and in amounts of
shares and warrants acceptable to HAC.
5. Management and key employees shall partici-
pate in a stock option plan of reorganized Harvey stock,
acceptable to HAC.
6. Harvey will confirm its POR no later than
February 29, 1996 with an effective date no later than
March 31, 1996. The final confirmation order will be
satisfactory in form and substance to HAC.
7. The board of directors of reorganized
Harvey will be determined by HAC, with participation by
senior management of Harvey. In addition, HAC may, at
its sole discretion, receive representation on the board
concomitant with funding of the loans described below.
8. Art Shulman, Joe Calabrese and Franklin
Karp will be members of the senior management of Harvey,
and shall enter into management (employment) contracts
with reorganized Harvey on terms acceptable to them and
HAC.
9. HAC shall, before the later of September
29, 1995 or four (4) days after execution of agreement,
make available $250,000 to Harvey in form of loans (made
either directly by HAC or as a junior, participant in the
Congress financing) pursuant to an order to be entered in
the Harvey bankruptcy, such loans to be on a secured
basis subject and subordinate only to the Congress fi-
nancing. The form of order approving such financing
shall be acceptable to HAC in its sole discretion. These
funds shall be utilized by Harvey to purchase inventory
and for other operational expenses acceptable to HAC.
These loans may at the option of HAC be converted to
equity upon confirmation of the POR, or at any time
thereafter.
10. On or before November 1, 1995, HAC shall
make available to Harvey an additional $1,250,000 in the
form of loans to be made pursuant to an order to be
entered in the Harvey Bankruptcy, such loans to be on a
secured basis subject and subordinate only to the Con-
gress financing. The form of order approving such fi-
nancing shall be acceptable to HAC in its sole discre-
tion. These funds shall be utilized by Harvey to pur-
chase inventory and for other operational expenses ac-
ceptable to HAC. These loans may at option of HAC be
converted to equity upon confirmation of POR, or any time
thereafter.
11. This agreement is subject in all respects
to the execution and delivery of final, definitive docu-
mentation, and approval thereof by order of the Bankrupt-
cy Court ("Approval Order").
12. All amounts loaned by HAC pursuant to
paragraphs 9 and 10 herein shall be repaid in event the
POR is not confirmed as set forth herein.
Sincerely yours,
Art Shulman
President
ACCEPTED AND AGREED TO
HARVEY ACQUISITION CORP.
By: /s/ Peter M. Burns
Peter M. Burns
President
