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United States
Securities and Exchange Commission
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Avatex Corporation
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(Name of Issuer)
Cumulative Exchangeable Preferred Stock, Series A, Par Value $4.20 Per Share
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(Title of Class of Securities)
05349F-30-3
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(CUSIP Number)
James E. Spiotto
Chapman and Cutler
111 West Monroe Street Telephone: 312-845-3000
Chicago, Illinois 60603 Facsimile: 312-701-2361
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
December 31, 1996
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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 which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (See
Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) 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 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).
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SCHEDULE 13D
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CUSIP NO. 05349F-30-3 PAGE 2 OF 7 PAGES
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NAME OF REPORTING PERSONS
1 United Equities Commodities Company, Momar Corporation, Moses Marx
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
UECC: TIN #13-2904027 MOMAR: TIN # 52-1273339 MARX: SS # ###-##-####
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
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SOURCE OF FUNDS
4
UECC: WC MOMAR: WC MARX: NA
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
UECC: New York MOMAR: Maryland MARX: USA
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SOLE VOTING POWER
7
NUMBER OF
UECC: 140,974 MOMAR: 222,026
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
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EACH SOLE DISPOSITIVE POWER
9
REPORTING
UECC: 140,974 MOMAR: 222,026
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
UECC: 140,974 MOMAR: 222,026
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
UECC: 3% MOMAR: 5% COMBINED: 8%
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TYPE OF REPORTING PERSON
14
UECC: PN MOMAR: CO MARX: IN
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Item 1. Security and Issuer. The class of equity securities to which this
Statement relates is the Cumulative Exchangeable Preferred Stock, Series A,
$4.20 par value (the "Shares"), of Avatex Corporation, a Delaware corporation
(the "Issuer"). The Shares are listed and traded on the New York Stock Exchange
under the symbol "AAV PRA". The principal executive offices of the Issuer are
located at 1220 Senlac Drive, Carrollton, Texas 75006.
Item 2. Identity and Background.
((a) through (f)). This Statement is being filed by (1) United Equities
Commodities Company, a New York general partnership ("UECC"); (2) Momar
Corporation, a Maryland corporation ("Momar"); and (3) Moses Marx, an
individual, who owns a 99% partnership interest in UECC, and who owns the
majority of the voting securities of Momar. Mr. Marx has sole voting and
disposition power with respect to all Avatex securities owned by UECC and Momar.
Mr. Marx is principally employed as a securities broker. Mr. Marx conducts his
security brokerage business through United Equities Company ("United Equities"),
a New York general partnership of which he is a partner. The principal business
offices of UECC, Momar, United Equities and Mr. Marx are located at 160
Broadway, New York, NY 10038. UECC is engaged in the commodities business. Momar
holds real estate and other investments.
Mr. Marx is joining in this Schedule 13D because, as a result of his
position with and ownership of voting interests of UECC and Momar, Mr. Marx
could be deemed to have voting and/or investment power with respect to the
Shares beneficially owned by UECC and/or Momar. Neither the filing of this joint
Schedule 13D nor any information contained herein shall be construed as an
admission by Mr. Marx of his control or power to influence the control of UECC
or Momar.
As a precautionary measure, UECC, Momar and Mr. Marx have elected to file
this Statement on a joint basis inasmuch as they may be deemed by a third party
to constitute a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) due to their existing management and ownership
structures. However, each Reporting Person expressly disclaims the existence of
a group (within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934) with the other Reporting Persons, and each Reporting Person further
disclaims beneficial ownership of the other Reporting Persons' Shares. Neither
the filing of this Statement nor any of its contents shall be deemed to
constitute an admission that any Reporting Person is the beneficial owner of any
other Reporting Person's Shares or a member of a group either for the purpose of
Section 13(d) of the Securities Exchange Act of 1934 or for any other purpose.
The following table furnishes the name, business address, present principal
occupation and citizenship of each partner of UECC (there are no executive
officers of UECC) and each executive officer and director of Momar.
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General Partners of UECC:
Name/Position Business Principal Citizenship
Address Occupation
Moses Marx United Equities Securities Broker USA
General Partner Company
160 Broadway
New York, NY 10038
Joseph M. Fink 45 West 54th Street Periodontist USA
General Partner New York, NY 10019
Philippe D. Katz United Equities Securities Broker USA
General Partner Company
160 Broadway
New York, NY 10038
Officers and Directors of Momar:
Name/Position Business Principal Citizenship
Address Occupation
Moses Marx United Equities Securities Broker USA
President and Director Company
160 Broadway
New York, NY 10038
Joseph M. Fink 45 West 54th Street Periodontist USA
Vice President and Director New York, NY 10019
Philippe D. Katz United Equities Securities Broker USA
Secretary and Director Company
160 Broadway
New York, NY 10038
During the past five years none of UECC or any of its general partners,
Momar or any of its officers, directors or shareholders, or Mr. Marx has been
convicted in any criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
is or was 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 was found to have violated any such laws.
Item 3. Source and Amount of Funds or Other Consideration. Funds for
UECC's and Momar's purchases of the Shares reported on this Schedule 13D were
provided from the working capital of UECC and Momar, respectively.
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Item 4. Purpose of Transaction. All of the Shares purchased by UECC and
Momar were initially acquired and held solely for investment purposes.
Currently, after reviewing and evaluating the Issuer's business prospects and
financial condition, UECC and Momar no longer intend to hold the shares solely
for investment purposes.
UECC and Momar also own certain shares of the Issuer's $5 Cumulative
Convertible Preferred Stock (the "Cumulative Preferred Stock", and together with
the Shares, the "Preferred Stock"). UECC and Momar also own shares of the
Issuer's common stock. The Shares have a liquidation preference, ahead of the
Issuer's common stock, of $40.00 per share. The Cumulative Preferred Stock has a
liquidation preference, ahead of the Issuer's common stock, of $50.00 per share.
The Shares and the Cumulative Preferred Stock are pari passu. The Issuer failed
to make certain dividend payments to Preferred Stockholders due on January 15,
1997.
UECC and Momar, individually, believe that the Issuer's management and
Board of Directors are engaged in a course of conduct designed to transfer the
value of the Issuer's assets to common stockholders instead of to the Preferred
Stockholders, to whom such value ought to be allocated in accordance with the
liquidation priorities of the Preferred Stock. UECC and Momar have substantial
opposition to the way in which the business of the Issuer is being conducted by
its management and Board of Directors. The Issuer repurchased substantial shares
of its common stock in the Summer and Fall of 1996, including significant
amounts from insiders, shortly before the Issuer was unable to pay dividends on
the Preferred Stock. In addition, the Issuer's management has received
substantial salaries notwithstanding the very poor financial performance of the
Issuer. Likewise, the Issuer has proposed to purchase additional membership
interests in Hamilton Morgan, L.L.C. Hamilton Morgan owns approximately
3,750,000 shares of the common stock of the discount drugstore chain Phar-Mor.
The Issuer currently owns approximately 69.8% of Hamilton Morgan, and proposes
to purchase the remaining approximately 30.2% of Hamilton Morgan from Robert
Haft for $7.2 million. Given the current market value of Phar-Mor common stock,
UECC and Momar believe that this transaction represents corporate waste.
The Reporting Persons met with representatives of the Issuer on March 13,
1997 to discuss their position. Thereafter, in a March 14, 1997 letter from the
Reporting Persons' counsel to counsel for the Issuer, the Reporting Persons
requested that the Issuer allow representatives of the Preferred Stockholders to
be represented on the Issuer's Board of Directors. To date, the Reporting
Persons have not received a reply to their March 14, 1997 letter. The Reporting
Persons have also recently spoken with representatives of the Issuer concerning
the possibility of an informational meeting with Preferred Stockholders.
At this time, UECC and Momar have determined that it is desirable to change
the management and Board of Directors of the Issuer so that the Issuer's
management can appropriately manage the Issuer's assets. UECC and Momar are
hopeful that other similarly situated Preferred Stockholders share this
conclusion. Accordingly, UECC and Momar, individually, may continue to purchase
the Issuer's common stock in order to cause a change in the Issuer's management
and Board of Directors. Alternatively, UECC and Momar, individually, may seek to
achieve their goals through other transactions involving or affecting the Issuer
or its securities, either directly or indirectly, including an exchange offer or
tender offer. In addition, UECC and/or Momar, individually, may pursue
litigation
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against the Issuer and/or its management and Board of Directors. Although
neither UECC nor Momar presently have any plans or proposals relating to or that
would result in any transactions of the type described in paragraphs (b) through
(j) of Item 4 to Schedule 13D, UECC and Momar, individually, are exploring
options that could relate to or result in plans or proposals in the future with
respect to one or more of such transactions.
UECC and Momar intend to continuously review their investment in the
Issuer, and to explore all options that may be available to them relating to
their investment in the Issuer. UECC and Momar, individually, may purchase
additional shares of common stock or the Preferred Stock, or may in the future
decide to sell a portion of all or any shares of common stock or Preferred Stock
that they may now or hereafter own. UECC's or Momar's decisions as to additional
purchases or any sales of any shares of common stock or Preferred Stock will be
made in light of market conditions, applicable legal considerations and any
other factors that they individually may from time-to-time deem appropriate.
Item 5. Interest in Securities of the Issuer. (a) As of the date of
this Schedule 13D, UECC directly owned 140,974 Shares, representing
approximately 3% of the class outstanding. Momar directly owned 222,026 Shares,
representing approximately 5% of the class outstanding. Mr. Marx owns no shares
directly.
(b) Mr. Marx has the sole power to vote or to direct the vote and the
sole power to dispose of, or to direct the disposition of, the Shares owned by
UECC and Momar.
(c) UECC's transactions in the Shares during the past sixty (60) days are
reflected on Exhibit 1 attached hereto. Neither Momar nor Mr. Marx has engaged
in any transactions in the Shares during the past sixty (60) days.
(d) No person, other than UECC, Momar and Mr. Marx, has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Shares owned by UECC and Momar.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer. Subject to the foregoing, UECC, Momar and
Mr. Marx agree and understand that this Statement is being filed on a joint
basis and thus it is being filed on behalf of each such Reporting Person. This
joint filing agreement is evidenced by the signatures of the Reporting Person's
respective authorized representatives as set forth below.
Except as described in this Schedule 13D, none of UECC or any of its
general partners, Momar or any of its officers, directors or shareholders, or
Mr. Marx, has any contracts, arrangements, understandings or relationships
(legal or otherwise) with any person with respect to any securities of the
Issuer, 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.
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Item 7. Material to be Filed as Exhibits. The correspondence proposing
representation on the Issuer's Board of Directors is attached hereto as Exhibit
2.
Signatures
After reasonable inquiry and to the best of the knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
United Equities Commodities Company
Dated as of May 30, 1997 By: /s/ Moses Marx
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Moses Marx, General Partner
Momar Corporation
By: /s/ Moses Marx
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Moses Marx, President
/s/ Moses Marx
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Moses Marx
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United Equities Commodities Company
Transactions Since March 25, 1997/1/
<TABLE>
<CAPTION>
Avatex Preferred Series A
Shares
Trade Date SEC ID Purchased Price
(Sold)
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<S> <C> <C> <C>
03/26/97 AAVPRA 15,300 8.000
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03/26/97 AAVPRA (2,000) 7.875
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03/31/97 AAVPRA 100 7.750
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04/04/97 AAVPRA 900 7.750
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04/07/97 AAVPRA 1,600 7.750
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04/10/97 AAVPRA 2,300 7.750
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04/11/97 AAVPRA 5,000 7.625
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04/14/97 AAVPRA 200 7.750
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04/14/97 AAVPRA 4,600 7.875
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04/22/97 AAVPRA 5,000 7.500
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</TABLE>
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/1/ All of these trades were effected in open market transactions.
Exhibit 1
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[LETTERHEAD OF CHAPMAN AND CUTLER]
March 14, 1997
Via Facsimile
Stephen E. Jacobs
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Re: Foxmeyer Health Corp. (Now Known as Avatex Corporation)
$5.00 Cumulative Convertible Preferred Stock and
$4.20 Senior A Cumulative Exchangeable Preferred Stock
Dear Mr. Jacobs:
We are writing this letter on behalf of United Equities Company, a holder
of both of the above-referenced Preferred Stock issues. As Mr. Marx stated to
representatives of Avatex Corporation, that given the missed dividend payment
and the pending litigation, it would be in the best interest of the Company and
its equity interests to have representatives of the Preferred Shareholders on
the Board in order to express the views of that constituency. While
representatives of Avatex Corporation were not inclined at this time and cited a
provision that only in the event of six missed dividend payments could two (2)
directors be elected, there was some recognition of the reasonableness of that
request.
Accordingly, United Equities has requested that we write to you so that you
may request the members of the Board of Directors to specifically consider at
this time whether they would be willing to take appropriate action to have a
representative of the Preferred Shareholders elected to the Board of Directors.
Given the financial condition of the Company, the legal issues, including the
litigation presently pending against the Company, it is the view of United
Equities that such action is reasonable and appropriate and would be the proper
exercise of the fiduciary duty which the Board owes to the Preferred
Shareholders.
We would appreciate hearing from you as to the determination made by the
Board of Directors. Thank you for your consideration of this matter.
Very truly yours,
/s/ James E. Spiotto
James E. Spiotto
JES:ieb
cc: Moses Marx
Exhibit 2
