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As filed with the Securities and Exchange Commission on October 20, 1997
Registration No. 333-34051
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
06-1104930
(I.R.S. Employer Identification No.)
888 Seventh Avenue
New York, New York 10106
(212) 547-6700
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Philip Galanes, Esq.
General Counsel and Vice President, Legal Affairs
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
888 Seventh Avenue
New York, New York 10106
(212) 547-6700
Copy to:
Andre Weiss, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
(212) 756-2431
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Approximate date of commencement of proposed sale to public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 20, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF
ANY SUCH STATE.
PROSPECTUS
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
Common Stock, par value $.01 per share
901,408 Shares
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This Prospectus relates to 901,408 shares of common stock, par
value $0.01 per share (the "Common Stock", and such shares constituting the
"Seller Common Stock"), of Golden Books Family Entertainment, Inc., a Delaware
corporation ("Golden Books" or the "Company"), which may be offered from time
to time by certain stockholders of the Company (such stockholders being
hereinafter described as the "Selling Stockholders"). The Selling Stockholders
acquired the Seller Common Stock on August 20, 1996, in a transaction exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"). The Selling Stockholders received the Seller Common
Stock as a result of the sale to the Company of substantially all of the family
entertainment related assets of Broadway Video Entertainment, L.P. ("BVELP"),
in exchange for which BVELP (and subsequently its interest-holders) received
$81.0 million in cash and the Seller Common Stock. See "The Company."
The Company will not receive any proceeds from the sale of the Seller Common
Stock offered hereby.
The Common Stock of the Company is quoted on The Nasdaq National
Market under the symbol "GBFE." The last reported sales price of the Company's
Common Stock on The Nasdaq National Market on October 17, 1997 was $11.375 per
share.
The Selling Stockholders, directly or through agents,
broker-dealers or underwriters, may sell the Seller Common Stock offered hereby
from time to time on terms to be determined at the time of sale, in
transactions on The Nasdaq National Market, in privately negotiated transactions
or otherwise. The Selling Stockholders and any agents, broker-dealers or
underwriters that participate in the distribution of the Seller Common Stock
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any commission received by them and any profit on the resale of the Seller
Common Stock purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act. See "Plan of Distribution."
Golden Press Holding, L.L.C. ("GPH"), an investment vehicle formed
by Warburg, Pincus Ventures, L.P., Richard E. Snyder and Barry Diller which
invested $65 million in the Company on May 8, 1996, owns shares of Common
Stock and Series B Convertible Preferred Stock of the Company representing
in the aggregate 19.7% of the voting power of the Company (after giving
effect to the conversion of the Series B Convertible Preferred Stock). GPH
also holds proxies entitling it to vote shares of Common Stock representing
an additional 12.1% of the voting power of the Company. See "Risk Factors
- --Control of the Company" for additional information concerning the relationship
of GPH with the Company.
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SEE "RISK FACTORS" COMMENCING ON PAGE 6 OF THIS PROSPECTUS FOR CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PURCHASERS OF THE SELLER COMMON STOCK
OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The Company will not receive any of the proceeds from the sale of
the shares of Seller Common Stock covered by this Prospectus. All such proceeds
will be received by the Selling Stockholders. All expenses of the offering of
the shares of Seller Common Stock covered by this Prospectus will be paid by
the Company, except for commissions and discounts of any underwriters, brokers,
dealers or agents retained by any Selling Stockholder. Expenses payable by the
Company in connection with the offering of the shares of Seller Common Stock
covered by this Prospectus are estimated to be approximately $85,000.
The date of this Prospectus is , 1997.
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE
HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR
REPRESENTATION NOT CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY OTHER
PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL
FOR SUCH PERSON TO MAKE SUCH AN OFFERING OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
Page
Available Information................................................... 2
Incorporation of Certain Documents by Reference......................... 3
Special Note Regarding Forward-Looking Statements....................... 4
The Company............................................................. 5
Risk Factors............................................................ 6
Use of Proceeds.........................................................12
Selling Stockholders....................................................12
Plan of Distribution....................................................14
Experts.................................................................15
Legal Matters...........................................................15
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"), which may be
inspected and copied, at prescribed rates, at the public reference facilities
maintained by the Commission located at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C., 20549, and at the regional offices of the
Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048, and at the Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Such
materials can also be inspected at the offices of the National Association of
Securities Dealers, Inc., at 33 Whitehall Street, 10th Floor, New York, New
York 10004. Additionally, the Company files such reports, proxy statements
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and other information with the Commission pursuant to the Commission's EDGAR
system. The Commission maintains a Web site that contains reports, proxy
statements and other information regarding registrants that file
electronically with the Commission pursuant to the EDGAR system. The address
of the Commission's web site is http://www.sec.gov. A copy of any document
incorporated by reference in the Registration Statement (not including
exhibits to the information that is incorporated by reference, unless such
exhibits are specifically incorporated by reference into the information that
the Registration Statement incorporates) of which this Prospectus forms a part
but which is not delivered with this Prospectus will be provided by the
Company without charge to any person to whom this Prospectus has been
delivered, upon the oral or written request of such person. Such requests
should be mailed to Corporate Secretary, Golden Books Family Entertainment,
Inc., 888 Seventh Avenue, New York, New York 10106. Telephone requests may be
directed to the Corporate Secretary at 212-547-6700.
The Company has filed with the Commission a Registration Statement
under the Securities Act with respect to the securities offered hereby. This
Prospectus omits certain information contained in the Registration Statement.
The information omitted may be obtained from the Commission upon payment of
the regular charge therefor.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are filed under File No. 0-14399 by
the Company with the Commission under the Exchange Act, are hereby
incorporated herein by reference:
(i) the Annual Report on Form 10-K, as amended by the Form 10-K/A,
for the year ended December 28, 1996;
(ii) the Quarterly Report on Form 10-Q for the quarter ended
March 29, 1997;
(iii) the Quarterly Report on Form 10-Q for the quarter ended
June 28, 1997;
(iv) the Company's Registration Statement on Form 8-A filed with
the Commission on April 9, 1986; and
(v) the Company's Current Report on Form 8-K dated October 1, 1997.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the filing of a post-effective amendment that indicates the
termination of the offering of the securities offered hereby shall be deemed
to be incorporated in this Prospectus by reference and to be a part hereof
from the date of filing of such documents.
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Any statements contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of the offering of the securities offered hereby to
the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
A copy of any document incorporated by reference in the
Registration Statement (not including exhibits to the information that is
incorporated by reference, unless such exhibits are specifically incorporated
by reference into the information that the Registration Statement
incorporates) of which this Prospectus forms a part but which is not delivered
with this Prospectus will be provided by the Company without charge to any
person to whom this Prospectus has been delivered, upon the oral or written
request of such person. Such requests should be mailed to Corporate Secretary,
Golden Books Family Entertainment, Inc., 888 Seventh Avenue, New York, New York
10106. Telephone requests may be directed to the Corporate Secretary at
212-547-6700.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
THE STATEMENTS CONTAINED IN THIS PROSPECTUS OR IN DOCUMENTS
INCORPORATED HEREIN BY REFERENCE THAT ARE NOT HISTORICAL FACTS, INCLUDING,
WITHOUT LIMITATION, IN PARTICULAR, STATEMENTS MADE (1) UNDER THE CAPTION
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" IN THE COMPANY'S ANNUAL REPORTS ON FORM 10-K, IN THE COMPANY'S
QUARTERLY REPORTS ON FORM 10-Q AND IN ANY AMENDMENTS TO SUCH REPORTS AND (2)
IN THE COMPANY'S CURRENT REPORTS ON FORM 8-K AND IN ANY AMENDMENTS TO SUCH
REPORTS MAY, IN SOME CASES, INCLUDE STATEMENTS OF FUTURE EXPECTATIONS,
PROJECTIONS OF REVENUE AND INCOME, STATEMENTS OF FUTURE ECONOMIC PERFORMANCE
AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO IMPORTANT FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN ANY SUCH
FORWARD-LOOKING STATEMENTS, INCLUDING, WITHOUT LIMITATION, THE RISKS OF
IMPLEMENTING THE COMPANY'S NEW STRATEGY, THE ABILITY OF MANAGEMENT OF THE
COMPANY TO MAINTAIN AND IMPROVE ITS RELATIONSHIPS WITH KEY CUSTOMERS AND
LICENSORS, PRODUCT DEMAND AND MARKET ACCEPTANCE RISKS, THE EFFECT OF ECONOMIC
CONDITIONS, THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING, PRODUCT
DEVELOPMENT AND OTHER RISKS DETAILED HEREIN IN THE SECTION ENTITLED "RISK
FACTORS," ELSEWHERE HEREIN AND IN THE COMPANY'S OTHER SECURITIES AND EXCHANGE
COMMISSION FILINGS.
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THE COMPANY
The Company is the largest publisher of children's books in the
North America retail market. The Company, through its Children's and Adult
Publishing Divisions, creates, publishes and markets an extensive range of
entertainment products, including "Little Golden Books" and other storybooks,
coloring/activity books, electronic storybooks, puzzles, educational
workbooks, reference books and novelty book formats. The Company has published
its flagship product line, "Little Golden Books," for over 50 years.
The Company believes that Golden Books is one of the strongest
consumer brand franchises of children's products in the United States.
Management believes that the Golden Books brand name not only has strong
consumer recognition, but also a reputation among consumers for wholesomeness,
entertainment and spending quality time with a child.
The Company's products utilize both owned and licensed characters.
The Company's owned characters include The Pokey Little Puppy and Little Lulu.
Many of the Company's products, particularly its coloring/activity books, use
characters licensed from Children's Television Workshop (the creator of Sesame
Street), DC Comics Inc., Mattel, Inc., Mercer Mayer (the creator of Little
Critters) and The Walt Disney Company ("Disney"). Characters licensed from
these and other companies include Sesame Street, Barbie, the Muppets, Superman
and Barney. The Disney character license allows the Company to use, in
selected product categories, all of Disney's animated characters, including
Mickey Mouse, Winnie the Pooh and Pinnochio and characters from The Little
Mermaid, The Lion King, Aladdin and Pocahontas, as well as characters from
more recent releases such as The Hunchback of Notre Dame, Toy Story, 101
Dalmatians and Hercules. In addition, the Company has licensing arrangements
in connection with the theatrical re-release of the Star Wars trilogy and the
recent Batman movie. The Company believes that the variety and popularity of
its owned and licensed characters are among its most important competitive
strengths. For additional information concerning the Company's agreements
with its licensors, see "--Recent Events--New Disney License" and "Risk
Factors--Dependence on and Relationships with Key Customer and Licensors."
On August 20, 1996, the Company acquired an extensive library of
character-based properties which constituted substantially all of the family
entertainment related assets of BVELP (the "Broadway Video Acquisition"). The
library is comprised of copyrights, distribution rights, trademarks and
licenses relating to characters, television programs and motion pictures, both
animation and live action, and includes individual specials and multiple
episode series. Among the library titles are Rudolph the Red-Nosed Reindeer,
Frosty the Snowman, Santa Claus Is Coming to Town, Lassie, 26 half-hour
episodes of Felix the Cat, Underdog, 52 half-hour episodes of Abbott and
Costello, The Lone Ranger and Tennessee Tuxedo. The Company operates the
business acquired in the Broadway Video Acquisition
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through its Golden Books Entertainment Group ("GBEG") division. The Company
licenses properties from its GBEG division library to third parties, both
domestically and internationally, for use on television, on home video and in
ancillary media, and intends to utilize selected properties and characters in
the GBEG division library in its children's publishing products, particularly
in the storybook, coloring/activity book and home video categories.
The Company's commercial printing division provides creative
printing and publishing services to third parties. The commercial printing
division's activities are grouped into three business categories: graphic art
services and commercial printing; educational kit manufacturing; and custom
publishing services.
The Company is a Delaware corporation. Its executive offices are
located at 888 Seventh Avenue, New York, NY 10106; telephone (212) 547-6700.
RECENT EVENTS
New Disney License
On September 26, 1997, the Company signed a new license agreement
with Disney (the "New Disney License Agreement") (the Company's previous main
license agreement with Disney was to have expired on December 31, 1997). The
New Disney License Agreement commenced on October 1, 1997 and runs through
December 31, 2001, and can be extended under certain conditions for an
additional year through December 31, 2002. The book formats covered under
the New Disney License Agreement include: coloring books, activity books, Little
Golden Books, First Little Golden Books, Look-Look Books, Super Shape Books and
Sturdy Shape Books. New formats approved by Disney also may be covered under
the New Disney License Agreement. Properties covered under the New Disney
License Agreement include Disney classic characters as well as characters from
major new Disney-branded films released during the term thereof.
Royalty rates under the New Disney License Agreement vary by
product covered. The New Disney License Agreement contains minimum royalty
guarantees of $7,370,000 for the nine-month period commencing January 1, 1998
and ending September 30, 1998, $11,670,000 for the second year of the term,
$13,340,000 for the third year of the term, $15,340,000 for the fourth
year of the term and $16,670,000 for the additional year (if applicable). In
addition, upon the execution and delivery thereof, Disney received warrants
to purchase 1,100,000 shares of Common Stock at a per share price of $11.375
(subject to certain adjustments), exercisable beginning on the earlier of
(i) 90 days after the expiration of the New Disney License Agreement or
(ii) 30 days after the announcement by either Disney or the Company that they
will (a) be entering into a new license agreement or (b) that they will not be
entering into a new license agreement, and expiring on March 31, 2008.
Hallmark Strategic Alliance
On September 6, 1996, the Company entered into a strategic
alliance with Hallmark Cards, Incorporated ("Hallmark") in connection with
which HC Crown Corp., a wholly owned subsidiary of Hallmark, purchased
2,356,198 shares of Common Stock for approximately $25.0 million. As indicated
in the Company's Form 10-K for the fiscal year ended December 28, 1996, the
Company and Hallmark delayed a decision with respect to a contemplated
potential second investment by Hallmark until July 1, 1997. In July, the
Company and Hallmark decided not to pursue such an investment at this time.
RISK FACTORS
Prospective purchasers of the Seller Common Stock offered hereby
should consider carefully the information set forth or incorporated by
reference in this Prospectus and, in particular, should evaluate the following
risks in connection with an investment in the Seller Common Stock.
LOSSES
During the fiscal year ended January 28, 1995, the fiscal year
ended February 3, 1996 and the eleven months ended December 28, 1996, the
Company experienced net losses of $17.6 million, $67.0 million and $197.5
million, respectively. For the six months ended June 28, 1997, the Company
experienced a net loss of $20.2 million. As part of the plan of new management
(which has joined the Company on or after May 8, 1996) to return the Company's
core publishing business to profitability and to redeploy its assets, new
management has taken a number of strategic actions and, accordingly, made
decisions with respect to certain of the Company's assets and recorded
write-downs and other charges in the consolidated financial statements of the
Company for the eleven months ended December 28, 1996 of $132.3 million. For
the six months ended June 28, 1997, the Company also incurred transition costs
in connection with the strategic redirection of the Company of $5.1 million.
The Company expects to record additional charges of approximately $16.0
million and $5.0 million attributable to transition costs to be incurred in
connection with the strategic redirection of the Company during the remainder
of fiscal 1997 and during fiscal 1998, respectively.
The Company's new management has adopted a new strategy to build a
leading family entertainment company that creates, publishes and licenses
children's entertainment products. The Company intends to build on the
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Company's position as a leader in the children's publishing market, utilizing
the strength of the Golden Books brand to provide family-oriented content
through multiple media. If the Company's strategy is successful, the Company
still does not expect to generate positive net income until fiscal 1998 at the
earliest. The Company's return to profitability is dependent in part on the
successful implementation of management's new strategy. There can be no
assurance that this strategy will be successful, that the Company will not
continue to experience net losses or that the Company's net losses will not
increase. See "--Risks of Implementation of New Strategy."
LEVERAGE
The Company has substantial indebtedness in relation to its
stockholders' deficit and there can be no assurance that the Company's
operating results will be sufficient for payment of all of its indebtedness.
The degree to which the Company is leveraged could have important consequences
to holders of the Common Stock, including the following: (i) the Company's
ability to obtain other financing in the future may be impaired; (ii) a
substantial portion of the Company's cash flow from operations must be
dedicated to the payment of principal and interest on its indebtedness; and
(iii) a high degree of leverage may make the Company more vulnerable to
economic downturns and may limit its ability to withstand competitive
pressures. The Company's ability to make scheduled payments on or, to the
extent not restricted pursuant to the terms thereof, refinance its
indebtedness depends on its financial and operating performance, which may
fluctuate significantly from quarter to quarter and is subject to prevailing
economic conditions and to financial, business and other factors beyond its
control. The Indenture pertaining to the 7.65% Senior Notes due 2002 of
Golden Books Publishing Company, Inc. ("GBP"), the principal operating
subsidiary of the Company, limits the amount of additional indebtedness that
GBP or any of its subsidiaries can create, incur, assume or guarantee.
RISKS OF IMPLEMENTATION OF NEW STRATEGY
The Company's management team has been in the process of
implementing a new strategy for the Company. As part of its new strategy, the
Company has made and continues to make changes to its existing product lines;
for example, the Company has revised its book design approaches with all of
its major licensees. Additionally, as part of its new strategy, the Company
has introduced new product lines in its Children's Publishing Group, including
a new sound line utilizing the Company's Smart Pages technology, a new Little
Golden Storybook format and a line of chapter books in R.L. Stine's "Fear
Street Series," which the Company will begin publishing in March 1998. Also
as part of its new strategy, the Company continues to look for opportunities
to enlarge its character library and exploit new distribution channels for its
products; for example, the Company's newly established Golden Value Books and
Special Markets division intends to develop value lines and pursue other
specialty publishing opportunities outside of traditional retail channels. The
Company has also developed, and is in the process of implementing, a new sales
strategy, which will include a sales structure reorganization, sales policy
improvement, category management and customer relationship enhancement. There
can be no assurance that the Company will be able to successfully implement all
or any part of its strategy, or
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that the implementation of this strategy will increase the profitability of the
Company or improve its cash flow. In addition, the Company's restructuring
measures have been and will continue to be offset in part by the incurrence of
additional expenses in retaining new management and editorial staff as well
as other upgrading measures relating to the Company's new strategy.
DEPENDENCE ON AND RELATIONSHIPS WITH KEY CUSTOMERS AND LICENSORS
During the six months ended June 28, 1997, approximately 30% of
the Company's publishing revenues and 20% of the Company's revenues generally
were attributable to sales to the Company's four largest customers. The loss
of any such customer or a substantial decrease in business from any such
customer would have a material adverse effect on the Company.
The Company believes that the variety and popularity of its
characters (whether licensed or owned) is among the most important factors
that differentiate the Company's products from those of its competitors.
Approximately 77% of the Company's publishing revenues for the six months
ended June 28, 1997 were attributable to products utilizing characters and
other properties licensed by the Company from third parties. Approximately 58%
of publishing revenues for the six months ended June 28, 1997 were attributable
to products incorporating characters and properties licensed from the
Company's five largest sources of licensed property. The character licenses
covering characters licensed by the Company generally have two to five year
terms. With respect to publishing, royalty rates paid by the Company
generally range from 8% to 13% of the net price received for the product
featuring the licensed characters and properties. Most license agreements
feature advance royalty payments and minimum royalty guarantees and contain
editorial standards that govern the Company's use of the licensed characters
and properties. Licenses usually can be canceled for failure to meet these
standards or certain other contractual obligations, although to date, none of
the Company's licenses has been canceled by the licensor for failure to meet
these standards or obligations. However, in connection with their renewal
some licenses have been reduced in scope. The licenses granted to the Company
generally are not exclusive. However, the current practice in the industry is
for licensors not to grant the same rights to more than one licensee. The
Company's licenses generally grant the Company usage rights only with respect
to certain product categories, as specified in the applicable license. While
the Company believes that its relationships with its licensors are good,
competition for licenses is strong and there can be no assurance that any of
the Company's licenses will be renewed on favorable terms if at all. See
"--Competition." The loss of the Company's license from Disney would have a
material adverse effect on the Company and the loss of other licenses,
individually or in the aggregate, could have a material adverse effect on the
Company.
The Company's relationships with a number of its significant
customers and licensors have been contentious from time to time because of
disputes, in the case of its customers, relating to prior pricing, return and
merchandising policies and, in the case of its licensors, alleged
non-compliance by the Company with certain license terms. New management
(which has joined the Company on or after May 8, 1996) has taken steps to
repair these relationships and believes that it has been successful in this
regard; currently, no disputes exist between the Company and its major
customers or licensors which the Company believes might have a material adverse
effect on the Company's business. However, there can be no assurance that
any of the Company's relationships with customers and/or licensors will not
become contentious in the future to the extent that a material adverse effect
on the Company would result.
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DEPENDENCE ON KEY PERSONNEL
The implementation of the Company's strategy requires the active
participation of its new management team and, in particular, Richard E.
Snyder, the Company's Chairman and Chief Executive Officer. The loss of the
services of Mr. Snyder could have a material adverse effect on the ability of
the Company to implement its strategy. The loss of any of the other members of
the Company's management team could adversely affect the implementation of
selected aspects of the Company's strategy or delay the implementation of such
aspects until a qualified replacement can be obtained. In addition to
adversely affecting the ability of the Company to implement its strategy, the
loss of any of the foregoing key employees of the Company could otherwise have
a material adverse effect on the Company. The Company does not maintain
"key-man" insurance in respect of Mr. Snyder or any of its other key
employees.
COMPETITION
The children's publishing market is highly competitive.
Competition is based primarily on price, quality, distribution, marketing and
licenses. In mass market sales, the Company faces competition primarily from
smaller competitors. In the trade and specialty trade categories, the
Company's principal competitors are large publishing companies. The Company
also competes for a share of consumer spending on children's entertainment and
educational products against companies that market a broad range of products
utilizing a broad range of technologies that are unrelated to those marketed
by the Company.
The market for licenses also is highly competitive and the Company
competes against many other licensees for significant licenses. In recent
years, licensors have fragmented licenses, which has reduced the cost of
purchasing a license. As a result, smaller bidders have been able to enter the
market for licenses, which has resulted in increased competition in this
market.
The Company also experiences strong competition for its other
products and services, based on a number of factors, including, but not
limited to, price, quality, formats, delivery and licenses. Many of the
Company's current competitors have greater financial resources than the
Company and, in selected markets, greater experience than the Company. The
markets which the Company intends to enter as part of its growth strategy each
contain a number of competing entities, many of which have greater resources
and experience with respect to these markets than the Company.
The Company's operations also may be adversely affected by a
number of factors beyond its control, including economic downturns, cyclical
variations in the markets for its products and related products of other
companies and changes in consumer preferences.
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RISKS RELATING TO INTELLECTUAL PROPERTIES
The value of the materials in the Company's library, both to the
Company as a licensor and as an end user, is subject to consumer taste. There
can be no assurance that these properties will be attractive to third-party
licensees or that they will be suitable for inclusion in the Company's
products. If properties that are being exploited cease to be attractive to
third-party licensees, licensing revenue from such licenses will decrease.
In view of the complex nature of the Company's intellectual
property rights, there is a risk of third parties asserting claims of
ownership or infringement or asserting a right to payment with respect to the
past, present or future exploitation of such properties. There can be no
assurance that the Company would prevail in any such claim. In addition, the
Company's ability to demonstrate, maintain or enforce these rights may be
difficult. Impairments or difficulties in demonstrating the Company's
ownership or license rights in such properties could adversely affect the
ability of the Company to generate revenue from or use such properties. In
many cases, the rights owned or being acquired by the Company are limited in
scope, do not extend to exploitation in all present or future media or in
perpetuity and may not include the right to create derivative works, such as
merchandising and character rights, remakes or sequels.
COST OF PAPER SUPPLIES AND OTHER MATERIAL COSTS
For the six months ended June 28, 1997, paper supply purchases
totaled approximately $16 million. Paper supplies and other material costs
constitute a significant portion of the Company's product costs and are
susceptible to numerous factors beyond the control of the Company. Significant
increases in these costs could have a material adverse effect on the Company's
operating results.
CONTROL OF THE COMPANY
GPH, which is controlled by Warburg, Pincus Ventures, L.P., owns
975,000 shares of Common Stock and 13,000 shares of Series B Convertible
Preferred Stock, no par value, of the Company (the "Series B Preferred Stock"),
convertible into an aggregate of 6,500,000 shares of Common Stock (an aggregate
of 19.7% of the voting power of the Company after giving effect to such
conversion) at the conversion rate of 500 shares of Common Stock, representing
a conversion price of $10.00 per share of Series B Preferred Stock. The number
of shares of Common Stock for which the Series B Preferred Stock may be
converted is subject to anti-dilution adjustments as set forth in the
Certificate of Designation for the Series B Preferred Stock. The Series B
Preferred Stock votes on an as-converted basis with the Common Stock on all
matters submitted to a vote of the stockholders of the Company, including the
election of directors. GPH also has irrevocable proxies with respect to
3,986,771 shares of Common Stock (12.1% of the issued and outstanding shares
of Common Stock after giving effect to the conversion of the Series B Preferred
Stock) owned by Richard A. Bernstein and certain trusts affiliated with
Mr. Bernstein. Pursuant to such proxy, GPH generally has the power to
- 10 -
<PAGE>
vote such shares in such manner as it deems proper. As a consequence of such
Common Stock and Series B Preferred Stock ownership and proxy, GPH controls
approximately 29.8% of the total voting power of the Company. The Series B
Preferred Stock entitles GPH, during the first four years following issuance,
to receive dividends of approximately 195,000 shares of Common Stock per
fiscal quarter of the Company (subject to certain anti-dilution adjustments).
GPH also holds a Warrant (the "Warrant") to purchase 3,250,000 shares of
Common Stock at a purchase price of $10 per share (subject to anti-dilution
adjustments) that will be exercisable beginning on May 8, 1998, subject to
acceleration upon the public announcement of certain business combinations or
the initiation of a proxy solicitation for control of the Company's Board of
Directors by any person or entity (other than GPH or certain of its affiliated
entities). The Warrant will be exercisable until May 8, 2003.
For so long as at least one-half of the shares of Series B
Preferred Stock initially issued are owned by GPH and certain of its
affiliates, the Company may not engage, subject to certain limited exceptions,
in the following transactions or take the following actions without the
consent of the holders of a majority of the shares of Series B Preferred
Stock: (i) amend or repeal the Company's Restated Certificate of Incorporation
or By-laws; (ii) authorize or effect the incurrence of any indebtedness or the
issuance of any capital stock; (iii) authorize or effect any sale or other
disposition of assets of the Company, any merger, consolidation or
reorganization of the Company or any liquidation, winding up or dissolution of
the Company; (iv) authorize or effect any acquisition of assets or license of
intellectual property, in each case involving a per annum payment in excess
of $5 million; or (v) terminate the employment of the current chief executive
officer of the Company. Furthermore, the holders of the Series B Preferred
Stock will have the right to elect up to one-third of the members of the
Board of Directors (the "Series B Directors"), each of the current members of
which was nominated by GPH in connection with its investment in the Company.
At present, GPH has the right to designate two additional directors; however,
GPH has advised the Company that it does not presently intend to exercise such
right, although it reserves the right to do so in the future.
The foregoing factors provide GPH with significant influence over
the management and policies of the Company. The foregoing factors also may
render it more difficult for a third party to effect a change of control of
the Company without the consent of GPH and may thereby discourage third
parties from any attempt to acquire control of the Company.
ENVIRONMENTAL REGULATION
The Company's operations are subject to extensive and evolving
environmental laws and regulations regarding the clean-up and protection of
the environment and worker health and safety. The Company believes that it is
in material compliance with applicable environmental requirements. However,
there can be no assurance that in the future the Company will not receive
notices that certain of its operations are not in compliance with its permits
or other environmental requirements, that current environmental requirements
will not become more onerous or that new laws and regulations will not be
adopted or become applicable to the Company. Any of the foregoing could result
in the imposition of fines or penalties, operating constraints, the issuance
of judicial or administrative orders requiring the Company to cease operating
a facility, increased operating and capital expenditures or other liabilities,
any of which could have a material adverse effect on the Company's business,
financial condition or results of operations.
- 11 -
<PAGE>
SHARES OF COMMON STOCK ELIGIBLE FOR SALE
GPH and Richard A. Bernstein have the right (subject to certain
conditions) to require the Company to register for offer and sale issued and
outstanding shares of Common Stock and/or shares of Common Stock issuable upon
the exercise or conversion, as applicable, of options, warrants and
convertible securities. See "--Control of the Company." H C Crown Corp., a
subsidiary of Hallmark, also has registration rights with respect to shares of
Common Stock acquired by it from the Company. Sales of substantial amounts of
such shares could adversely affect the market value of the Common Stock and, in
the case of convertible securities, may effect a dilution of the book value per
share of Common Stock.
In connection with the original offering to GPH, GPH agreed that it
would not permit transfer of the Warrant, other than to an affiliate of GPH,
until the earlier to occur of (i) May 8, 1998 or (ii) the public announcement
of certain business combinations or the initiation of a proxy solicitation for
control of the Company's Board of Directors. The 2,356,198 shares acquired by
Hallmark in connection with the September 6, 1996 purchase by Hallmark of $25
million of Common Stock are subject to restrictions under the Securities Act.
Additionally, Hallmark agreed that as long as GPH holds a majority of the
shares of Series B Preferred Stock originally issued, Hallmark will not sell any
of its Common Stock to any purchaser such that after the consummation of such
purchase, such purchaser would hold greater than 5% of the shares of the
Company's outstanding Common Stock on a fully diluted basis. The shares held
by Mr. Bernstein are subject to contractual restrictions on transfer identical
to the volume limitations set forth in Rule 144(c) under the Securities Act.
Pursuant to such volume limitations, Mr. Bernstein is entitled to sell, within
any three-month period, a number of shares of Common Stock that does not exceed
the greater of (i) one percent (1%) of the total number of outstanding shares
of Common Stock or (ii) the average weekly reported trading volume of the
Common Stock during the four calendar weeks preceding such sale.
USE OF PROCEEDS
The proceeds from the sale of the shares of Seller Common Stock
offered hereby are solely for the account of the Selling Stockholders.
Accordingly, the Company will receive none of the proceeds from the sale
thereof.
SELLING STOCKHOLDERS
The Selling Stockholders acquired the shares of Seller Common Stock
offered pursuant to this Prospectus in connection with the Broadway Video
Acquisition.
The following table sets forth the name of each Selling
Stockholder, the number of shares of Seller Common Stock owned by each Selling
Stockholder as of October 20, 1997, and the number of shares which may be
offered for resale pursuant to this Prospectus.
The information included below is based upon information provided
by the Selling Stockholders. Because each Selling Stockholder may offer all,
some or none of its shares of Seller Common Stock, no definitive estimate as
to the number of shares thereof that will be held by each such Selling
Stockholder after such offering can be provided and the following table has
been prepared on the assumption that all shares of Seller Common Stock offered
under this Prospectus will be sold to parties unaffiliated with the Selling
Stockholders.
- 12 -
<PAGE>
<TABLE>
<CAPTION>
Shares Of Shares Of
Common Stock Shares of Common Stock
Owned Prior Common Stock Owned After
Name To Offering (1) Being Offered Offering (1)(2)
<S> <C> <C> <C>
Eric Ellenbogen (3) 199,055 99,055 100,000
Engelman Family Limited
Partnership 39,675 39,675 0
Lorne Michaels (4) 249,550 241,550 8,000
Michaels Family Limited
Partnership 200,000 200,000 0
Stephen W. Shippee 14,000 14,000 0
TCW Capital (Fund II Separate Account) 2,500 2,500 0
TCW Capital (Fund III Separate Account) 15,186 15,186 0
TCW Special Placements Fund II 83,839 83,839 0
TCW Special Placements Fund III 205,603 205,603 0
</TABLE>
(1) For purposes of computing the number of shares held by each person
named above on a given date, any security that such person has the
right to acquire within sixty days is deemed to be owned by such
person.
(2) Assumes the sale of all shares offered hereby to persons who are not
affiliates of the Selling Stockholders.
(3) Includes non-qualified stock options to purchase 100,000 shares of
Common Stock granted pursuant to the 1995 Stock Option Plan of the
Company. Such options are presently exercisable.
(4) Includes non-qualified stock options to purchase 8,000 shares of
Common Stock granted pursuant to the 1995 Stock Option Plan of the
Company. Such options are presently exercisable.
Eric Ellenbogen has served as the President of the Golden Books
Entertainment Group division of GBP, the principal operating subsidiary of the
Company, and as an Executive Vice President of the Company since August 20,
1996. Mr. Ellenbogen has served as a director of the Company since September
17, 1996.
Lorne Michaels has been a director of the Company since September
17, 1996 and is a member of the Compensation Committee of the Board of
Directors of the Company.
- 13 -
<PAGE>
PLAN OF DISTRIBUTION
The Company is registering the shares of Seller Common Stock
offered by the Selling Stockholders hereunder pursuant to registration rights
contained in the Registration Rights Agreement, dated August 20, 1996, between
the Company and Broadway Video Entertainment, L.P. (the "Registration Rights
Agreement"), under which the Selling Stockholders have certain rights. The
Registration Rights Agreement requires the Company to file a registration
statement on an appropriate form with the Commission with respect to the
offering and sale or other disposition of the Seller Common Stock owned
by the Selling Stockholders.
The shares of Seller Common Stock offered hereunder may be sold
from time to time by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on The
Nasdaq National Market or otherwise at prices and on terms then prevailing or
related to the then current market price, or in negotiated transactions. The
Seller Common Stock may be sold to or through one or more broker-dealers
acting as agent or principal in underwritten offerings, block trades, agency
placements, exchange distributions, brokerage transactions, privately
negotiated transactions, short sales or otherwise, or in any combination of
transactions.
In connection with any transaction involving the shares of Seller
Common Stock offered hereunder, broker-dealers or others may receive from the
Selling Stockholders, and may in turn pay to other broker-dealers or others,
compensation in the form of commissions, discounts or concessions in amounts
to be negotiated at the time. Broker-dealers and any other persons
participating in a distribution of the Seller Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with
such distribution, and any such commissions, discounts or concessions may be
deemed to be underwriting discounts or commissions under the Securities Act.
Any or all of the sales or other transactions involving the Seller
Common Stock described above, whether effected by a Selling Stockholder, any
broker-dealer or others, may be made pursuant to this Prospectus. In addition,
any shares of Seller Common Stock that qualify for sale pursuant to Rule 144
under the Securities Act may be sold under Rule 144 rather than pursuant to
this Prospectus.
To comply with the securities laws of certain states, if
applicable, the Seller Common Stock may be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, shares of
Seller Common Stock may not be sold unless they have been registered or
qualified for sale or an exemption from registration or qualification
requirements is available and is complied with under applicable state
securities laws.
The Company and the Selling Stockholders (certain of which are
directors and/or officers of the Company) have agreed to indemnify each other
and their respective officers and directors and certain other persons against
liabilities in connection with any offering of the Seller Common Stock,
including liabilities arising under the Securities Act.
- 14 -
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable.
EXPERTS
The consolidated financial statements of Golden Books Family
Entertainment, Inc. and Subsidiaries (formerly Western Publishing Group, Inc.
and Subsidiaries) (the "Company") appearing in the Company's Annual Report, as
amended (Form 10-K), at December 28, 1996, and for the eleven months then
ended, have been audited by Ernst & Young LLP, independent auditors, and at
February 3, 1996, and for each of the two years in the period ended February
3, 1996, by Deloitte & Touche LLP, independent auditors, as set forth in their
respective reports thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such reports given upon the authority of such firms
as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock being
offered hereby are being passed upon by Schulte Roth & Zabel LLP, 900 Third
Avenue, New York, New York 10022, counsel for the Company.
- 15 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Filing Fee . . . . . . . . . . . . . $ 2,698
Legal Fees . . . . . . . . . . . . . . . 50,000
Accounting Fees . . . . . . . . . . . . 30,000
Miscellaneous. . . . . . . . . . . . . . 2,302
-------
Total $85,000
Item 15. Indemnification of Directors and Officers.
Limitation on Directors' Liability.
The Company's Certificate of Incorporation provides that no
director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for the breach of any fiduciary duty as a
director, except (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, as amended from time to
time, or (iv) for any transaction from which the director derived an improper
personal benefit. The effect of these provisions will be to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of fiduciary duty as a director (including breaches resulting from
grossly negligent behavior), except in the situations described above.
Limitation on Liability under Registration Rights Agreement
Under the Registration Rights Agreement, the Company and the
Selling Stockholders (certain of which are directors and/or officers of the
Company) have agreed to indemnify each other and their respective officers and
directors and certain other persons against liabilities in connection with any
offering of the Seller Common Stock, including liabilities arising under the
Securities Act.
Item 16. Exhibits.
The following is a complete list of exhibits filed as a part of
this Registration Statement:
- 16 -
<PAGE>
Exhibit No. Document
4.1* Registration Rights Agreement between the Company
and Broadway Video Entertainment, L.P., dated
August 20, 1996, under which the Selling Stockholders
have certain rights.
4.2** Warrant Agreement between the Company and Disney
Enterprises, Inc., dated September 26, 1997.
5.1 Opinion of Schulte Roth & Zabel LLP
10.1** Licensed Book Publishing Agreement between Golden
Books Publishing Company, Inc. and Disney Licensed
Publishing, dated September 26, 1997.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Schulte Roth & Zabel LLP
(included in Exhibit 5)
24.1* Powers of Attorney
- --------
* Previously filed.
** To be filed.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
- 17 -
<PAGE>
Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (1)(ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. Incorporation of Subsequent Exchange Act Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C. Indemnification of Officers and Directors.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
- 18 -
<PAGE>
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
- 19 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of
New York, on this 20th day of October, 1997.
GOLDEN BOOKS FAMILY ENTERTAINMENT, INC.
By: /S/ Philip E. Rowley
----------------------
Philip E. Rowley
Executive Vice President
and Chief Financial
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities indicated, on this 20th day of October, 1997.
Name and Signature Title
- ----------------------------- -----------------------------
/s/ Richard E. Snyder Chairman of the Board and
- ----------------------------- Chief Executive Officer
Richard E. Snyder (Principal Executive Officer)
/s/ Philip E. Rowley Executive Vice President and
- ----------------------------- Chief Financial Officer (Principal
Philip E. Rowley Financial and Accounting Officer)
- 20 -
<PAGE>
* Executive Vice President and
- ----------------------------- Director
Eric Ellenbogen
* Director
- -----------------------------
Shahara Ahmad-Llewellyn
* Director
- -----------------------------
Linda L. Janklow
* Director
- -----------------------------
Lorne Michaels
* Director
- -----------------------------
Marshall Rose
* Director
- -----------------------------
H. Brian Thompson
* Director
- -----------------------------
John L. Vogelstein
*By /s/ Philip Galanes
--------------------
Philip Galanes
- 24 -
<PAGE>
EXHIBIT 5.1
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
October 20, 1997
Golden Books Family Entertainment, Inc.
888 Seventh Avenue
New York, New York 10106
Dear Sirs:
We have acted as counsel to Golden Books Family Entertainment, Inc.,
a Delaware corporation (the "Company"), in connection with the preparation and
filing by the Company with the Securities and Exchange Commission (the
"Commission") of a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the offer and sale of a maximum of 901,408 shares of Common
Stock, par value $.01 per share, of the Company (the "Shares").
In our capacity as counsel to the Company in connection with the
preparation and filing by the Company of the Registration Statement, we have
examined originals, telecopies or copies, certified or otherwise identified to
our satisfaction, of such records of the Company and all such agreements,
certificates of public officials, certificates of officers or representatives
of the Company and others, and such other documents, certificates and
corporate or other records as we have deemed necessary or appropriate as a
basis for this opinion.
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons signing or delivering any
instrument, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
latter documents. As to any facts material to this opinion that were not
independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Company and
others.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized and validly issued, and are fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus which forms a part thereof. In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Schulte Roth & Zabel LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus
of Golden Books Family Entertainment, Inc. and Subsidiaries (formerly Western
Publishing Group, Inc. and Subsidiaries) (the "Company") for the registration
of 901,408 shares of its common stock and to the incorporation by reference
therein of our report dated March 21, 1997, with respect to the consolidated
financial statements and schedules of the Company included in its Annual Report,
as amended (Form 10-K), for the eleven months ended December 28, 1996, filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
----------------------
Ernst & Young LLP
New York, New York
October 16, 1997
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-34051 of Golden Books Family Entertainment,
Inc. and Subsidiaries (formerly Western Publishing Group, Inc. and
Subsidiaries) of our report dated April 2, 1996 appearing in the Annual
Report on Form 10-K of Golden Books Family Entertainment, Inc. and
Subsidiaries for the period ended December 28, 1996, and to the reference to
us under the heading "Experts" in the prospectus, which is part of this
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
-------------------------
Deloitte & Touche LLP
Milwaukee, Wisconsin
October 16, 1997
