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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
USG CORPORATION
(Name of Issuer)
Common Stock, par value $.10 per share
(Title of Class of Securities)
0009032931
(CUSIP Number)
David J. Greenwald, Esq.
The Goldman Sachs Group, L.P.
85 Broad Street
New York, NY 10004
(212) 902-1000
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 24, 1995
(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. [ ]
(A fee is not required, only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (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 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).
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<PAGE>
CUSIP No. 0009032931
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Water Street Corporate Recovery Fund I, L.P.
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(b) [ ]
3 SEC Use Only
4 Source of Funds
00-WC
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 7 Sole Voting Power
Shares 116,070 shares of Common Stock
Beneficially
Owned By 8 Shared Voting Power
Each -0-
Reporting Person
With 9 Sole Dispositive Power
116,070 shares of Common Stock
10 Shared Dispositive Power
- 0 -
11 Aggregate Amount Beneficially Owned by Each Reporting Person
116,070 Warrants
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares [ ]
13 Percent of Class Represented by Amount in Row (11)
Less than 1%
14 Type of Reporting Person*
PN
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<PAGE>
CUSIP No. 0009032931
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Goldman, Sachs & Co.
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(b) [ ]
3 SEC Use Only
4 Source of Funds
00-WC
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) [ ]
6 Citizenship or Place of Organization
New York
Number of 7 Sole Voting Power
Shares 2,558,132 shares of Common Stock
Beneficially 8 Shared Voting Power
Ownned by 128,428
Each
Reporting 9 Sole Dispositive Power
Person 2,558,132 shares of Common Stock
With
10 Shared Dispositive Power
128,428
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,686,560 shares of Common Stock
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* [ ]
13 Percent of Class Represented by Amount in Row (11)
5.9%
14 Type of Reporting Person*
HC-BD-PN
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<PAGE>
CUSIP No. 0009032931
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
The Goldman Sachs Group, L.P.
2 Check the Appropriate Box if a Member of a Group*
(a) [ ]
(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
7 Sole Voting Power
2,558,132 shares of Common Stock
Number of
Shares
Beneficially
Owned By 8 Shared Voting Power
Each 128,428
Reporting
Person 9 Sole Dispositive Power
With 2,558,132 shares of Common Stock
10 Shared Dispositive Power
128,428
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,686,560 shares of Common Stock
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* [ ]
13 Percent of Class Represented by Amount in Row (11)
5.9%
14 Type of Reporting Person*
HC-PN
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<PAGE>
This statement constitutes Amendment No. 6 ("Amendment
No. 6") to the Statement on Schedule 13D, dated May 17, 1993, as
amended (the "Schedule 13D"), filed by Water Street Corporate
Recovery Fund I, L.P. ("Water Street"), Goldman, Sachs & Co.
("Goldman Sachs") and The Goldman Sachs Group, L.P. ("GS Group"
and together with Water Street and Goldman Sachs, the "Reporting
Persons") in respect of the beneficial ownership by the Reporting
Persons of shares of the common stock, par value $.10 per share
(the "Common Stock"), of USG Corporation, a Delaware corporation
(the "Company"). Capitalized terms used but not defined herein
shall have the meaning ascribed to them in the Schedule 13D.
Item 4 is hereby amended as follows:
Item 4. Purpose of the Transaction.
On May 23, 1995, Wade Fetzer III and Barry L.
Zubrow, who are, respectively, a limited partner of GS Group and a
general partner of GS Group and Water Street's former designees to
the Company's Board of Directors, resigned from the Board of
Directors of the Company. A copy of Mr. Fetzer's and Mr. Zubrow's
resignation letter is attached as Exhibit I and incorporated by
reference.
On May 24, 1995, Water Street distributed (the
"Distribution") the shares of Common Stock owned by Water Street
to its partners on a pro rata basis in accordance with Water
Street's partnership agreement. The shares distributed to the
partners (other than the partners, if any, who are "affiliates" of
the Company (as such term is defined under the Securities Act))
are salable without registration under the Securities Act and
without regard to the requirements of Rule 144 under the
Securities Act, and the shares distributed to any partner which is
an affiliate of the Company are salable pursuant to Rule 144.
Goldman Sachs has advised the Company that it
does not intend to sell any shares of Common Stock received by it
in the Distribution for the three months following the
Distribution, although it reserves the right to do so. Goldman
Sachs may acquire additional shares for investment purposes and,
after the expiration of the three months, Goldman Sachs may sell
or hold any such shares of Common Stock that it still retains,
depending upon the Company's financial condition, business,
operations and prospects, the market price of the Common Stock,
conditions in the securities markets generally, general economic
and industry conditions and other factors.
Goldman Sachs has further advised the Company
that its present plans with respect to the Common Stock (other
than the shares of Common Stock received in the Distribution and
other than as described above) are as follows: On or prior to
May 26, 1995, Goldman Sachs will not engage in any transactions in
the Common Stock except unsolicited brokerage transactions to
effect purchase or sell orders, in which case Goldman Sachs will
not solicit the contraside of the transaction.
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<PAGE>
Thereafter, in the ordinary course of its securities business,
Goldman Sachs may, from time to time, act as a broker and dealer
for the limited partners in Water Street (the "Limited Partners"),
for other customers or for its own account in the purchase or sale
of Common Stock or other securities issued by the Company,
including effecting brokerage transactions or block transactions
for Limited Partners and trading the Common Stock on a principal
basis. In connection with any such purchases or sales, Goldman
Sachs may pool the orders of those customers and prorate or
otherwise equitably apportion the purchase or sale executions.
Each customer's authorization for Goldman Sachs to act as the
customer's agent in any unexecuted purchase or sale of the
customer's shares is revocable, and Goldman Sachs will not have
any voting or investment power with respect to any customer's
shares, except for shares held in managed accounts (the "Managed
Accounts") for which Goldman Sachs exercises voting and/or
investment authority.
Item 5 is hereby amended as follows:
Item 5. Interest in Securities of the Issuer.
As described in Item 4 above, on May 24, 1995,
Water Street distributed the shares of Common Stock owned by Water
Street to its partners in accordance with Water Street's
partnership agreement. As of the date hereof, Water Street
beneficially owns Warrants to purchase 116,070 shares of Common
Stock and no other shares of Common Stock. Accordingly, Water
Street beneficially owns less than 1% of the outstanding shares of
Common Stock. As of the date hereof, Goldman Sachs beneficially
owns 2,442,062 shares of Common Stock and may be deemed to be the
beneficial owner of 128,428 shares of Common Stock currently held
in Managed Accounts. In addition, as the general partner of Water
Street, Goldman Sachs may be deemed to be the beneficial owner of
Warrants to purchase 116,070 shares of Common Stock held by Water
Street. In addition, GS Group may be deemed to be the beneficial
owner of (i) the Warrants to purchase 116,070 shares of Common
Stock held by Water Street, (ii) the 2,442,062 shares of Common
Stock held by Goldman Sachs, and (iii) the 128,428 shares of
Common Stock held in Managed Accounts with respect to which
Goldman Sachs may be deemed to be the beneficial owner.
Accordingly, Goldman Sachs and GS Group may be deemed to
beneficially own (without giving effect to the Warrants owned by
Water Street) 5.7% of the outstanding shares of Common Stock.
Assuming that Water Street exercises all of its Warrants, but that
no other Warrants are exercised, Goldman Sachs and GS Group may be
deemed to beneficially own 5.9% of the outstanding shares of
Common Stock. Goldman Sachs and GS Group each disclaims
beneficial ownership of the shares of Common Stock held in Managed
Accounts.
Each of Goldman Sachs and GS Group has the sole power
to vote or to direct the vote or shares the power to vote or to
direct the vote, and has the sole power to dispose or to direct
the disposition of or shares the power to dispose or to direct the
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<PAGE>
disposition of, the number of shares of Common Stock
beneficially owned by it as indicated on pages 3 and 4.
On May 24, 1994, Water Street ceased to be the
beneficial owner of more than 5% of the Common Stock.
Item 6 is hereby amended as follows:
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities
of the Issuer.
In connection with the resignations by Messrs. Fetzer and
Zubrow from the Company's Board of Directors, the Reporting
Persons delivered a letter to the Company in which (i) Water
Street waived its rights under the Water Street Agreement to
designate directors to the Company's Board of Directors and any
committees of the Board on which they served, including the
Finance Committee, and (ii) the Reporting Persons waived their
rights to receive any of the data or information that the Company
would otherwise be required to deliver to the Reporting Persons
pursuant to the Water Street Agreement or otherwise. A copy of
that letter is attached as Exhibit J and incorporated by
reference.
The Reporting Persons and the Company entered into a letter
agreement, dated May 23, 1995, pursuant to which the Water Street
Agreement and the Letter Agreement terminated upon the
Distribution. Accordingly, the Reporting Persons are no longer
subject to restrictions relating to purchases of voting securities
of the Company and transfers of shares of Common Stock. A copy of
that letter is attached as Exhibit K and incorporated by
reference.
In connection with the Distribution, Goldman Sachs and the GS
Group advised the Company, in a letter dated May 24, 1995, that
Goldman Sachs has no current intention to sell any shares of
Common Stock received by it in the Distribution for the three
months following the Distribution, although it reserves the right
to do so. Goldman Sachs also advised the Company that its present
plans with respect to the Common Stock (other than the shares of
Common Stock received in the Distribution) are as follows: On or
prior to May 26, 1995, Goldman Sachs will not engage in any
transactions in the Common Stock except unsolicited brokerage
transactions to effect purchase or sell orders, in which case
Goldman Sachs will not solicit the contraside of the transaction.
Thereafter, in the ordinary course of its securities business,
Goldman Sachs may, from time to time, act as a broker and dealer
for Limited Partners, for other customers or for its own account
in the purchase or sale of Common Stock or other securities issued
by the Company, including effecting brokerage transactions or
block transactions for any Limited Partner and trading the Common
Stock on a principal basis. Goldman Sachs stated that (i) in
connection with any such purchases or sales, Goldman Sachs may
pool the orders of those customers and prorate or otherwise
equitably
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<PAGE>
apportion the purchase or sale executions, and (ii) each
customer's authorization for Goldman Sachs to act as the
customer's agent in any unexecuted purchase or sale of the
customer's shares is revocable, and Goldman Sachs will not have
any voting or investment power with respect to any customer's
shares, except for shares held in Managed Accounts. A copy of
that letter is attached as Exhibit L and incorporated by
reference.
Item 7. Material to be Filed as Exhibits.
(I) Resignation Letter, dated May 23, 1995, from Wade Fetzer III
and Barry L. Zubrow to the Company.
(J) Letter, dated May 23, 1995, by the Reporting Persons to the
Company.
(K) Letter Agreement, dated May 23, 1995, between the Reporting
Persons and the Company.
(L) Letter, dated May 24, 1995, from Goldman Sachs and GS Group
to the Company.
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<PAGE>
SIGNATURE
Each of the undersigned certifies, after reasonable
inquiry and to the best of its knowledge and belief, that the
information set forth in this statement is true, complete and
correct.
WATER STREET CORPORATE RECOVERY FUND I, L.P.
By: Goldman, Sachs & Co.
General Partner
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
GOLDMAN, SACHS & CO.
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
THE GOLDMAN SACHS GROUP, L.P.
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
Dated: May 24, 1995
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<PAGE>
Index to Exhibits
Exhibit Description Page
(I) Resignation Letter,
dated May 23, 1995,
from Wade Fetzer III
and Barry L. Zubrow to
the Company. 12
(J) Letter, dated May 23,
1995, by the Reporting
Persons to the Company. 13
(K) Letter Agreement, dated
May 23, 1995, between the
Reporting Persons and
the Company. 15
(L) Letter, dated May 24, 1995,
from Goldman Sachs and
GS Group to the Company. 16
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<PAGE>
Exhibit I
[Letterhead of Goldman, Sachs & Co.]
May 23, 1995
The Board of Directors
USG Corporation
125 South Franklin Street
Chicago, IL 60606
Attention: Eugene B. Connolly
Chairman of the Board
Gentlemen and Madame:
We are pleased to have served as directors of USG
Corporation since it emerged from its prepackaged bankruptcy two
years ago. Since then, the Company's businesses have continued to
perform extremely well, under the leadership of an excellent
management team, and the Company's financial profile has improved
dramatically. A number of important financial transactions have
been successfully executed, including equity and debt financings
and bank agreement amendments. The Company's strong cash flow,
along with last year's equity offering, have allowed debt to be
significantly reduced, and USG's financial flexibility has
dramatically improved.
Now that the Company has completed its restructuring
and demonstrated outstanding performance, it is an appropriate
time for us to resign from the Board of Directors of USG and any
committees of the Board on which we serve. In addition, Water
Street is considering distributing the USG common shares owned by
it to its partners. If Water Street distributes the USG shares,
based on the current market price, Goldman Sachs would receive
approximately 2.3 million shares. Goldman Sachs does not
currently intend to sell any USG shares received by it in the
distribution during the three months following the distribution.
We are pleased to have had the opportunity to serve
with such a distinguished board. The Company has undergone a most
successful turnaround. Finally, we anticipate that the business
relationship between our two firms will continue to develop and
look forward to working with you in the future.
Very truly yours,
/s/ Wade Fetzer /s/ Barry Zubrow
Wade Fetzer Barry Zubrow
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<PAGE>
Exhibit J
May 23, 1995
The Board of Directors
USG Corporation
125 South Franklin Street
Chicago, IL 60606
Attention: Eugene B. Connolly
Chairman of the Board
Gentlemen:
By a separate letter, Wade Fetzer and Barry Zubrow are
resigning, effective today, from the Board of Directors (the
"Board") of USG Corporation ("USG") and any committees of the
Board on which they serve, including the Finance Committee of the
Board. In addition, Water Street Corporate Recovery Fund I, L.P.
("Water Street") is considering distributing shares of Common
Stock, par value $.10 per share ("USG Common Stock"), of USG owned
by Water Street to its partners on a pro rata basis in accordance
with Water Street's Partnership Agreement.
Water Street, Goldman, Sachs & Co. ("Goldman Sachs")
and The Goldman Sachs Group, L.P. ("GS Group") hereby waive their
rights to be provided with any of the data or information that USG
is required to deliver to them pursuant to Section 6.2(b) of that
certain letter agreement, dated February 25, 1993, by and between
USG, Water Street, Goldman Sachs and GS Group.
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<PAGE>
In addition, Water Street hereby waives all rights
through June 22, 1997 to designate directors to the Board and to
designate a member of the Finance Committee.
Very truly yours,
WATER STREET CORPORATE
RECOVERY FUND I, L.P.
By: GOLDMAN, SACHS & CO.
General Partner
By:/s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
GOLDMAN, SACHS & CO.
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
THE GOLDMAN SACHS GROUP, L.P.
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
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<PAGE>
Exhibit K
May 23, 1995
USG Corporation
125 South Franklin Street
Chicago, Illinois 60606
Reference is made to that certain Letter
Agreement, dated February 25, 1993 (the "1993 Letter
Agreement"), among USG Corporation (the "Company"), Water
Street Corporate Recovery Fund I, L.P. ("Water Street"),
Goldman, Sachs & Co. ("Goldman Sachs") and The Goldman Sachs
Group, L.P. ("GS Group" and together with Water Street and
Goldman Sachs, the "Goldman/Water Entities"). Sections 1.1
and 1.3 of the 1993 Letter Agreement restrict purchases and
sales of shares of common stock, par value $.10 per share,
of the Company (the "Common Stock") by the Goldman/Water
Entities for so long as the Goldman/Water Entities own 5% or
more of the then outstanding shares of Common Stock. The
Company and the Goldman/Water Entities are also parties to
the Letter Agreement, dated February 22, 1994, among the
Goldman/Water Entities and the Company (which, together with
the 1993 Letter Agreement, are herein collectively referred
to as the "Letter Agreements").
The Goldman/Water Entities have advised you that
Water Street is considering distributing the shares of
Common Stock owned by Water Street to its partners on a pro
rata basis in accordance with Water Street's partnership
agreement (the "Distribution"). Based on the current market
price for the Common Stock and assuming USG has issued and
outstanding 45,088,634 shares of Common Stock, immediately
following the Distribution, Goldman Sachs and GS Group would
beneficially own (other than in managed accounts with
respect to which Goldman Sachs has investment discretion and
which would hold less than 1% of the outstanding shares of
Common Stock) approximately 5.7% of the outstanding shares
of Common Stock.
The Goldman/Water Entities hereby request your
consent to the termination of the Letter Agreements
effective upon the Distribution. Following the
Distribution, Water Street will deliver to you a certificate
stating that the Distribution has been effected.
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<PAGE>
Please indicate your consent to the termination
of the Letter Agreements as provided in this Letter by
executing a copy of this Letter.
WATER STREET CORPORATE
RECOVERY FUND I, L.P.
By:Goldman, Sachs & Co.
General Partner
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
GOLDMAN, SACHS & CO.
By:/s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
THE GOLDMAN SACHS GROUP, L.P.
By:/s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
Accepted and agreed
this 23rd day of May, 1995:
USG CORPORATION
By: /s/Eugene B. Connolly
Name: Eugene B. Connolly
Title: Chairman & CEO
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Exhibit L
May 24, 1995
The Board of Directors
USG Corporation
125 South Franklin Street
Chicago, IL 60606
Attention: Eugene B. Connolly
Chairman of the Board
Gentlemen:
In connection with the distribution (the
"Distribution") by Water Street Corporate Recovery Fund I, L.P.
("Water Street") of the shares of common stock, par value $.10 per
share (the "Common Stock"), of USG Corporation (the "Company")
owned by Water Street to its partners on a pro rata basis in
accordance with Water Street's partnership agreement, Goldman,
Sachs & Co. ("Goldman Sachs") and The Goldman Sachs Group, L.P.
("GS Group") hereby advise you of the following:
1. Goldman Sachs has no current intention to sell
any shares of Common Stock received by it in the Distribution for
the three months following the Distribution, although it reserves
the right to do so.
2. Goldman Sachs' present plans with respect to the
Common Stock (other than the Common Stock received in the
Distribution) are as follows: On or prior to May 26, 1995,
Goldman Sachs will not engage in any transactions in the Common
Stock except unsolicited brokerage transactions to effect purchase
or sell orders, in which case Goldman Sachs will not solicit the
contraside of the transaction. Thereafter, in the ordinary course
of its securities business, Goldman Sachs may, from time to time,
act as a broker and dealer for the limited partners in Water
Street (the "Limited Partners"), for other customers or for its
own account in the purchase or sale of Common Stock or other
securities issued by the Company, including effecting brokerage
transactions or block transactions for any Limited Partner and
otherwise trading the Common Stock on a principal basis. In
connection with any such purchases or sales, Goldman Sachs may
pool the orders of those customers and prorate or otherwise
equitably apportion the purchase or sale executions. Each
customer's authorization for Goldman Sachs to act as the
customer's agent in any unexecuted purchase or sale of the
customer's shares is revocable, and Goldman Sachs will not
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<PAGE>
have any voting or investment power with respect to
any customer's shares, except for shares held in managed accounts.
We are separately providing you with a copy of
Amendment No. 6 to the Schedule 13D filed today with the
Securities and Exchange Commission by Water Street, Goldman Sachs
and GS Group.
Very truly yours,
GOLDMAN, SACHS & CO.
By:/s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
THE GOLDMAN SACHS GROUP, L.P.
By:/s/ Richard A. Friedman
Name: Richard A. Friedman
Title: General Partner
