SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 2)*
Avatex Corporation
(Name of Issuer)
$5.00 Cumulative Convertible Preferred Stock
(Title of Class of Securities)
05349F204
(CUSIP Number)
Martin D. Sklar, Esq., Kleinberg, Kaplan, Wolff & Cohen, P.C., 551 Fifth Avenue,
New York, New York 10176 Tel: (212) 986-6000
(Name, Address and Telephone Numberof Person Authorized to Receive Notices
and Communications)
June 18, 1999
(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(e), 13d-1(f) or 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).
(Continued on the following pages)
(Page 1 of 5)
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SCHEDULE 13D
Page 5 of 5
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Elliott Associates, L.P., a Delaware Limited Partnership
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)[x]
(b)[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
111,637
8 SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
111,637
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
111,637
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.11%
14. TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This statement is filed pursuant to Rule 13d-2(a) with respect to the
shares of $5.00 Cumulative Convertible Preferred Stock (the "$5.00 First Series
Preferred Stock") of Avatex Corporation (the "Issuer") beneficially owned by the
Reporting Person specified herein as of June 28, 1999 and amends and supplements
the Schedule 13D dated as of April 23, 1998 filed by the Reporting Person, as
amended (the "Schedule 13D"). Except as set forth herein, the Schedule 13D, as
previously amended, is unmodified.
ITEM 4. PURPOSE OF TRANSACTION
Elliott acquired the $5.00 Cumulative Convertible Preferred Stock
beneficially owned by it in the ordinary course of its trade or business of
purchasing, selling, trading and investing in securities.
As previously disclosed in the Schedule 13D, on April 23, 1998 Elliott
brought an action in the Delaware Court of Chancery against the Issuer, Xetava
Corporation, and each member of the Issuer's Board of Directors to enjoin the
Issuer's merger with Xetava (Elliott Associates, L.P. v. Avatex Corporation et
al., CA 16336) (the "Action"). On June 18, 1999 Elliott and the Issuer agreed to
settle the Action and entered into a Stipulation of Settlement. In connection
with such settlement, Elliott, along with its affiliates Westgate International,
L.P. ("Westgate") and Martley International, Inc. ("Martley"), entered into a
Stockholders' Agreement with the Issuer wherein they agreed to the following,
subject to the occurrence of the proposed merger and various other
contingencies:
1. To vote their shares of $5.00 Cumulative Convertible Preferred Stock
and $4.20 Cumulative Exchangeable Preferred Stock, Series A ("$4.20 Series A
Preferred Stock") in favor of the proposed merger between the Issuer and Xetava,
and granted the Issuer their proxies to effect same;
2. To waive their appraisal rights in connection with such proposed
merger;
3. To exchange their shares of the Issuer's preferred stock for the
"alternate consideration", as follows:
(a) Each share of Elliott's $5.00 First Series Preferred Stock
will be exchanged for (i) $3.7408 in cash, (ii) $8.34 principal amount of 6.75%
notes to be issued by Avatex Funding, Inc. ("Avatex Funding"), a new
wholly-owned subsidiary of the Issuer, (iii) warrants to purchase 0.67456 shares
of the common stock of the post-merger entity, and (iv) a deferred contingent
cash right to receive (x) 16% of an amount equal to 20% of any net recovery that
the Issuer may receive in certain litigation brought by it against McKesson
Corporation and a number of large pharmaceutical manufacturers (the "McKesson
Litigation"), divided by (y) the number of outstanding shares of $5.00 First
Series Preferred Stock; and
(b) Each share of the Elliott's and Westgate's $4.20 Series A
Preferred Stock will be exchanged for (i) $2.9705 in cash, (ii) $6.623 principal
amount of 6.75% notes to be issued by Avatex Funding, (3) warrants to purchase
0.53567 shares of the common stock of the post-merger entity, and (iv) a
deferred contingent cash right to receive (x) 84% of an amount equal to 20% of
any net recovery that the Issuer may receive in the McKesson Litigation, divided
by (y) the number of outstanding shares of $4.20 Series A Preferred Stock.
4. For a period of ten years, not to acquire any additional equity
securities of the Issuer or seek to influence or control the management or
policies of the Issuer; and
5. To release the Issuer and its directors from liability for matters
in connection with the Issuer's proposed merger with Xetava.
The Issuer will pay $150,000 to Elliott and $150,000 to Westgate in
consideration for their execution of the Stockholders' Agreement.
Furthermore, Elliott and Westgate entered into a Stock Purchase
Agreement with Phar-Mor, Inc. ("Phar-Mor") on June 18, 1999 whereby Phar-Mor
will purchase all of Elliott's and Westgate's shares of the Issuer's common
stock now held for a purchase price of $2.00 per share, to be effected
simultaneously with the closing of the Issuer's proposed merger with Xetava.
Elliott and Westgate have each granted Phar-Mor a proxy to vote their shares of
the Issuer's common stock, but Phar-Mor is contractually bound to vote in favor
of the revised Xetava merger proposal.
Subject to the court's approval of the above-referenced Stipulation of
Settlement, Elliott will dismiss the Action against the Issuer, and Dan Gropper,
Ralph DellaCamera, Vincent Intrieri and Brian Miller, the designees of the
preferred stockholders on the Issuer's Board of Directors, will resign as
directors of the Issuer.
Except as set forth herein, Elliott has any plans or proposals which
relate to or would result in any of the actions set forth in subparagraphs (a)
through (j) of Item 4.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated:
June 28, 1999 ELLIOTT ASSOCIATES, L.P.
By: /s/ Paul E. Singer
Paul E. Singer
General Partner
