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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 30, 1995
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CROWN BOOKS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-11457 52-1227415
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3300 75th Avenue, Landover, Maryland 20785
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 731-1200
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(Former name or former address, if changed since last report).
The total number of sequentially numbered pages is 7.
The exhibit index appears on page 3.
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Item 1. Changes in Control of Registrant
The discussion under Item 5 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 5. Other Events
On June 30, 1995, Ronald S. Haft delivered to Dart Group Corporation
("Dart"), the majority shareholder of Crown Books Corporation, a copy of a
letter, dated June 30, 1995, from him to Herbert H. Haft. Such letter is
incorporated herein by reference and attached hereto as Exhibit 99.1.
On July 7, 1995, Herbert H. Haft delivered to Dart a copy of a letter,
dated July 7, 1995, from him to Ronald S. Haft. Such letter is incorporated
herein by reference and attached hereto as Exhibit 99.2.
On July 12, 1995, Stuart M. Grant, attorney for Ronald S. Haft,
delivered to Dart a copy of a letter, dated July 12, 1995, from Stuart M.
Grant, on behalf of Ronald S. Haft, to Stephen H. Case, attorney for Herbert H.
Haft. Such letter is incorporated herein by reference and attached hereto as
Exhibit 99.3.
Dart has not taken a position with respect to the matters addressed in
the three above-referenced letters.
Item 7. Financial Statements and Exhibits
Exhibit 99.1: Letter, dated June 30, 1995, from Ronald S.
Haft to Herbert H. Haft.
Exhibit 99.2: Letter, dated July 7, 1995, from Herbert H.
Haft to Ronald S. Haft.
Exhibit 99.3: Letter, dated July 12, 1995, from Stuart M.
Grant to Stephen H. Case.
SIGNATURE
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 hereunto duly authorized.
CROWN BOOKS CORPORATION
By: ROBERT A. MARMON
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Robert A. Marmon
Chief Financial Officer
Date: July 13, 1995
Page 2 of 7
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CROWN BOOKS CORPORATION
Form 8-K
Exhibit Index
Exhibit 99.1: Letter, dated June 30, 1995, from Ronald S.
Haft to Herbert H. Haft.
Exhibit 99.2: Letter, dated July 7, 1995, from Herbert H.
Haft to Ronald S. Haft.
Exhibit 99.3: Letter, dated July 12, 1995, from Stuart M.
Grant to Stephen H. Case.
Page 3 of 7
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EXHIBIT 99.1
[letterhead of Ronald S. Haft, President, Dart Group Corporation]
June 30, 1995
Mr. Herbert H. Haft
Chief Executive Officer and Chairman
of the Board of Directors
Dart Group Corporation
3300 75th Avenue
Landover, MD 20785
RE: Revocation of Proxy for 172,730 Shares
of Dart Class B Common
Dear Herbert:
This letter hereby revokes the Proxy, dated July 28, 1993, covering 172,730
shares of Dart Class B Common Stock, which I granted to you. That Proxy is no
longer in effect and I shall retain the vote of my Dart Class B Common Stock.
Very truly yours,
/s/ RONALD S. HAFT
Ronald S. Haft
cc: Elliot Arditti
Larry G. Schafran
Douglas Bregman
Bonita Wilson
Page 4 of 7
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EXHIBIT 99.2
HERBERT H. HAFT
2501 30th Street, N.W.
Washington, D.C. 20008
July 7, 1995
Via Facsimile and Hand Delivery
Ronald S. Haft
2435 California Street, N.W.
Washington, D.C. 20008
Dear Ronald:
I write in response to your letter of June 30, in which you attempt to
revoke the irrevocable proxy you gave me under the contract between us dated
July 28, 1993. Your attempted revocation of my proxy is a material breach of
the contract between us. As remedy for your breach, I hereby exercise my right
to rescind the contract.
By this letter I hereby tender to you the immediate return of your
$11,054,720 note and the payments by you that have not previously been taken
back by you. In exchange, I hereby demand that you immediately tender to me
all certificates for the 172,730 shares of B Stock that are now pledged as
collateral for your $11,054,720 note, together with all necessary endorsements
and signature guarantees. This will restore each of us to our respective
positions before the July 28, 1993 contract.
Please confirm immediately your acceptance of my tender of the
consideration received under the contract now rescinded so that we may arrange
for the appropriate physical exchange of checks and documents. If I do not
hear from you by Wednesday, July 12, 1995 at 5:00 p.m., then I will assume that
you have refused my tender and I will be forced to seek all appropriate relief
in court.
By this rescission notice, I am also advising Dart that the contract
has been rescinded and that you have no ownership rights in any of the 172,730
shares of B Stock, including any rights to vote any shares or receive any
dividends on any shares. The consequence of your breach of our contract is
that all ownership rights in the 172,730 shares of B Stock have now reverted to
me.
Very truly yours,
/s/ HERBERT H. HAFT
Herbert H. Haft
cc: Larry G. Schafran
Stephen J. Brogan
Arne M. Sorenson
Page 5 of 7
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EXHIBIT 99.3
[letterhead of Blank, Rome, Comisky & McCauley]
July 12, 1995
BY FACSIMILE
Stephen H. Case, Esquire
Davis, Polk & Wardwell
1400 I Street, N.W.
Washington, DC 20005
Dear Steve:
The facsimile cover sheet which accompanied Herbert H.
Haft's July 7, 1995 letter to Ronald S. Haft came from Davis,
Polk & Wardwell so I will respond, on behalf of Ronald S. Haft,
directly to you.
Herbert H. Haft's demand to rescind the July 28, 1993
sale of 172,730 shares of Dart Group Corporation Class B Common
Stock to Ronald S. Haft is rejected. In revoking the proxy,
Ronald Haft did not in any way repudiate the sale of stock from
Herbert Haft to Ronald Haft on that date. Without limiting the
foregoing, Ronald Haft did not repudiate the promissory note
still outstanding (and as to which Herbert Haft already has
received two interest payments) or any other aspects of the July
1993 transaction.
The sole issue raised by Ronald Haft's letter to
Herbert Haft of June 30, 1995 is whether Ronald Haft or
Herbert Haft should be allowed to vote the stock in question. It
is our view that the proxy, which is subject to Delaware law, is,
notwithstanding its title, revokable by Ronald Haft in the
circumstances which exist today. Even if one were to accept your
client's position that the proxy was irrevocable when it was
signed (which we do not concede), your client's misuse of that
proxy, breach of contract and breach of fiduciary duty, as well
as other misdeeds, now give Ronald Haft the right to revoke the
proxy.
Herbert Haft's effort to use Ronald Haft's revocation
of the proxy as the basis to demand rescission of the stock
purchase is pretextual. Herbert Haft's letter reflects that you
have decided to create an urgent issue where none exists. Either
you are right and Herbert will be able to vote the stock, or,
Ronald is right and Ronald will be able to vote the stock. In
any event, there is a Standstill Order of the Delaware Chancery
Court currently in effect which prevents Dart from recognizing
stockholder action. Furthermore, we know of no stockholder vote
that has been scheduled by Dart
Page 6 of 7
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Stephen H. Case, Esquire
July 12, 1995
Page 2
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and Ronald Haft has no present intention of voting the stock.
Therefore, we fail to see any urgency relating to the narrow
question of whether Ronald Haft or Herbert Haft will have the
right to vote the stock in the future.
Very truly yours,
/s/ STUART M. GRANT
Stuart M. Grant
cc: Stephen H. Brogan, Esquire
Elliot Arditti, Esquire (Corporate Secretary - Dart Group
Corporation)
Page 7 of 7
