UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2 )*
HEALTH MANAGEMENT, INC.
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(Name of Issuer)
Common Stock, par value $.03 per share
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(Title of Class of Securities)
42219B10
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(CUSIP Number)
Rober W. Fine
Transworld Home HealthCare, Inc.
75 Terminal Avenue
Clark, New Jersey 07066
(908) 340-1144
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 26, 1997
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
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.
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* 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).
<PAGE>
SCHEDULE 13D
CUSIP No. 42219B10
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Transworld Home HealthCare, Inc.
(Intentionally Omitted)
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2 Check the Appropriate Box If a Member of a Group* a. |_|
b. |X|
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3 SEC Use Only
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4 Source of Funds*
BK
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
New York
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7 Sole Voting Power
Number of
Shares -0-
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 9,711,005
Person --------------------------------------------------------
With 9 Sole Dispositive Power
-0-
--------------------------------------------------------
10 Shared Dispositive Power
9,711,005
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,711,005 shares
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12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
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13 Percent of Class Represented By Amount in Row (11)
51.0%
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14 Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 42219B10
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
IMH Acquisition Corp.
(Intentionally Omitted)
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2 Check the Appropriate Box If a Member of a Group* a. |_|
b. |X|
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3 SEC Use Only
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4 Source of Funds*
BK
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
Number of
Shares -0-
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 9,711,005
Person --------------------------------------------------------
With 9 Sole Dispositive Power
-0-
--------------------------------------------------------
10 Shared Dispositive Power
9,711,005
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,711,005 shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
51.0%
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14 Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 42219B10
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Hyperion Partners II L.P.
(Intentionally Omitted)
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2 Check the Appropriate Box If a Member of a Group* a. |_|
b. |X|
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3 SEC Use Only
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4 Source of Funds*
BK, OO
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
Number of
Shares -0-
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 9,973,098
Person --------------------------------------------------------
With 9 Sole Dispositive Power
-0-
--------------------------------------------------------
10 Shared Dispositive Power
9,973,098
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,973,098 shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
51.6%
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14 Type of Reporting Person*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
-4-
<PAGE>
SCHEDULE 13D
CUSIP No. 42219B10
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Hyperion Ventures II L.P.
(Intentionally Omitted)
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2 Check the Appropriate Box If a Member of a Group* a. |_|
b. |X|
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3 SEC Use Only
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4 Source of Funds*
OO
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
Number of
Shares -0-
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 9,973,098
Person --------------------------------------------------------
With 9 Sole Dispositive Power
-0-
--------------------------------------------------------
10 Shared Dispositive Power
9,973,098
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,973,098 shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
51.6%
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14 Type of Reporting Person*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
-5-
<PAGE>
SCHEDULE 13D
CUSIP No. 42219B10
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Hyperion Funding II Corp.
(Intentionally Omitted)
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2 Check the Appropriate Box If a Member of a Group* a. |_|
b. |X|
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3 SEC Use Only
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4 Source of Funds*
OO
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares -0-
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 9,973,098
Person --------------------------------------------------------
With 9 Sole Dispositive Power
-0-
--------------------------------------------------------
10 Shared Dispositive Power
9,973,098
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,973,098 shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
51.6%
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14 Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
-6-
<PAGE>
SCHEDULE 13D
CUSIP No. 42219B10
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Lewis S. Ranieri
(Intentionally Omitted)
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2 Check the Appropriate Box If a Member of a Group* a. |_|
b. |X|
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3 SEC Use Only
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4 Source of Funds*
OO
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
United States of America
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares -0-
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 9,973,098
Person --------------------------------------------------------
With 9 Sole Dispositive Power
-0-
--------------------------------------------------------
10 Shared Dispositive Power
9,973,098
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,973,098 shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
51.6%
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14 Type of Reporting Person*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
-7-
<PAGE>
SCHEDULE 13D
CUSIP No. 42219B10
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Scott A. Shay
(Intentionally Omitted)
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2 Check the Appropriate Box If a Member of a Group* a. |_|
b. |X|
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3 SEC Use Only
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4 Source of Funds*
OO
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
United States of America
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares -0-
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 9,973,098
Person --------------------------------------------------------
With 9 Sole Dispositive Power
-0-
--------------------------------------------------------
10 Shared Dispositive Power
9,973,098
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,973,098 shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
51.6%
- --------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-8-
<PAGE>
Items 4, 5, and 7 of the Schedule 13D, dated November 13, 1996, as amended
by Amendment No. 1 thereto (the "Schedule 13D") relating to the Common Stock,
par value $.03 per share, of Health Management, Inc., are hereby amended by
adding thereto the information and exhibit described herein. Terms which are
defined in such Schedule 13D shall have their defined meanings herein, unless
otherwise defined herein.
Item 4. Purpose of Transaction
On March 26, 1997, Transworld, the Issuer, and Newco entered into a letter
agreement (the "March 26 Amendment"), which amended certain provisions of the
Merger Agreement. The March 26 Amendment decreases from $1.50 to $.30 the amount
per share that each holder of Common Stock (other than Transworld and its
subsidiaries) will receive if the Merger is consummated. In addition, pursuant
to the March 26 Amendment, it is a condition to the obligations of Transworld
and Newco to effect the Merger that, at or prior to April 11, 1997, the Amended
Stipulation of Partial Settlement of the consolidated class actions under the
caption, In re Health Management, Inc. Securities Litigation, dated December 19,
1996, shall have been further amended to provide for the settlement of such
actions for a reduced settlement amount not to exceed $4.55 million and that
such Amended Stipulation of Partial Settlement, as so amended, shall have been
finally approved by the United States District Court and such court shall have
entered a judgment substantially in the form of the exhibit to such Amended
Stipulation and all appeals therefrom shall have been exhausted or applicable
waiting periods
-9-
<PAGE>
for any such appeals shall have expired without an appeal having been filed. The
March 26 Amendment further provides that its effectiveness is subject, at the
option of Transworld and Newco, to the receipt by Transworld of the written
consent to the March 26 Amendment by Transworld's lenders and that if such
consent has not been obtained on or prior to April 11, 1997, then at any time
thereafter Transworld may, in its sole discretion, terminate the March 26
Amendment and terminate the Merger Agreement. For further information with
respect to the March 26 Amendment, reference is made to the March 26 Amendment
(which is filed as Exhibit 1 hereto), which is incorporated herein by reference.
Item 5. Interest in Securities of the Issuer
Based solely on the advice of the Issuer as to the applicable conversion
rate of the Convertible Note owned by the Fund, the Convertible Note was
convertible into 262,093 shares of Common Stock as of March 15, 1997. Therefore,
each of the Fund, the General Partner, Lewis S. Ranieri, and Scott A. Shay may
be deemed to be the beneficial owner of such 262,093 shares of Common Stock and
the 9,711,005 shares of Common Stock beneficially owned by Transworld and Newco,
or an aggregate of 9,973,098 shares of Common Stock, representing 51.6% of the
outstanding shares of Common Stock.
Item 7. Materials to be filed as Exhibits
Exhibit 1 - Letter agreement, dated March 26, 1997, amending
Merger Agreement
-10-
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the knowledge and belief
of each of the undersigned, each of the undersigned certifies that the
information set forth in this statement is true, complete, and correct.
TRANSWORLD HOME HEALTHCARE, INC.
April 4, 1997 By /s/ Robert W. Fine
-------------------------------
Robert W. Fine
President
HYPERION PARTNERS II L.P.
By: Hyperion Ventures II L.P.,
its general partner
By: Hyperion Funding II Corp.,
its general partner
By /s/Scott A. Shay
------------------------
Scott A. Shay
Executive Vice
President
HYPERION VENTURES II L.P.
By: Hyperion Funding II Corp.,
its general partner
By /s/Scott A. Shay
----------------------------
Scott A. Shay
Executive Vice President
HYPERION FUNDING II CORP.
By /s/Scott A. Shay
--------------------------------
Scott A. Shay
Executive Vice President
/s/Lewis A. Ranieri
-----------------------------------
Lewis A. Ranieri
/s/Scott A. Shay
-----------------------------------
Scott A. Shay
IMH ACQUISITION CORP.
By /s/ Robert W. Fine
--------------------------------
Robert W. Fine
President
-11-
EXHIBIT 1
Transworld Home HealthCare, Inc.
75 Terminal Avenue
Clark, New Jersey 07066
March 26, 1997
Health Management, Inc.
1371-A Abbott Court
Buffalo Grove, Illinois 60089
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Merger, dated as of
November 13, 1996, as amended by letter agreements, dated November 27, 1996,
December 12, 1996, December 23, 1996, January 10, 1997 and January 13, 1997,
among Transworld Home HealthCare, Inc. ("Transworld"), IMH Acquisition Corp.
("Newco"), and Health Management, Inc. (the "Company") (as amended, the "Merger
Agreement"). Terms defined in the Merger Agreement shall have their defined
meanings herein, unless otherwise defined herein.
The parties have agreed that in view of the Company's publicly
announced restatement of its financial statements for the quarterly periods
ended July 31, 1996 and October 31, 1996, and the Company's publicly announced
charge for the quarterly period ended January 31, 1997, it is appropriate to
further amend the Merger Agreement, among other things, to further reduce the
Merger Consideration.
Accordingly, the parties hereto agree as follows:
1. Section 1.6(b) of the Merger Agreement is hereby amended by
changing the amount "$1.50" to "$0.30".
2. Section 7.1(e) of the Merger Agreement is hereby deleted (it
being acknowledged by Transworld for purposes hereof and Section 7.3(b) of the
Merger Agreement that the Company will not obtain a fairness opinion with
respect to the Merger Consideration, as reduced by this amendment).
3. Section 7.3(b) of the Merger Agreement is hereby amended in its
entirety and, as so amended, shall read as follows:
"The representations and warranties of the Company set forth in this
Agreement shall be true and correct in all material respects at and as of the
Effective Time as if made at and as of such time, except for changes
contemplated by this Agreement and by the Disclosure Schedule, the Deferred
Schedules, the Supplemental Disclosure Schedule dated January 13, 1997 and the
Supplemental Disclosure Schedule dated March 26, 1997 and changes reflecting
historical facts and current trends disclosed in the Company's Quarterly Reports
on Form 10-Q for the quarterly period
<PAGE>
Health Management, Inc.
March 26, 1997
Page 2
ended January 31, 1997, on Form 10-Q/A-2 for the quarterly period ended October
31, 1996 and on Form 10-Q/A for the quarterly period ended July 31, 1996 (it
being agreed, however, that (i) all descriptions therein as to the effect of
Olanzapine or other antipsychotic drugs shall be deemed superseded and replaced
by the description set forth in item A. of Section 3.19 of the Supplemental
Disclosure Schedule dated January 13, 1997 and (ii) notwithstanding the
disclosure of a current trend, a Material Adverse Effect may nevertheless be
deemed to have occurred by reason of a material change in such current trend),
and except to the extent that any such representation or warranty is made as of
a specified date, in which case such representation or warranty shall have been
true and correct in all material respects as of such date."
4. Section 7.3(h) of the Merger Agreement is hereby amended in its
entirety and, as so amended, shall read as follows:
"At or prior to April 11, 1997, the Amended Stipulation of Partial
Settlement of the consolidated class actions under the caption In re Health
Management, Inc. Securities Litigation, Master File No. 96-CV-889 (ADS), dated
December 19, 1996, shall have been further amended, in form and substance
satisfactory to Transworld and Newco, to provide for the settlement of such
actions for a reduced settlement amount not to exceed $4.55 million, and at or
prior to the Effective Time, such Amended Stipulation of Partial Settlement, as
so amended, shall have been finally approved by the United States District Court
and such Court shall have entered a judgment (including a bar order)
substantially in the form of Exhibit B to such Amended Stipulation and all
applicable proceedings for review, appeals, and rights of appeal of such
judgment (other than a proceeding or order, or any appeal or petition for a writ
of certiorari, pertaining solely to any plan of allocation and/or application
for attorneys' fees, costs, or expenses) shall have been exhausted or all
applicable waiting periods during which any appeal or other request for review
of such judgment (other than a proceeding or order, or any appeal or petition
for a writ of certiorari, pertaining solely to any plan of allocation and/or
application for attorneys' fees, costs, or expenses) may be made shall have
expired without any appeal having been filed."
5. Section 7.3(k) of the Merger Agreement is hereby deleted (it
being acknowledged by the Company that Transworld will not obtain an updated
opinion of UBS Securities LLC as to the fairness of the consideration being paid
by Transworld).
* * *
<PAGE>
Health Management, Inc.
March 26, 1997
Page 3
Except to the extent amended hereby, the Merger Agreement shall
remain in full force and effect and nothing herein shall affect, or be deemed to
be a waiver of, the other terms and provisions of the Merger Agreement.
The effectiveness of this amendment shall be subject, at the option
of Transworld and Newco, to the receipt by Transworld of the written consent to
this amendment by the lenders (the "Banks") party to the Credit Agreement, dated
as of July 31, 1996, as amended, among Transworld, the Banks and Bankers Trust
Company, as agent. If the written consent of the Banks has not been obtained on
or prior to April 11, 1997, then at any time thereafter Transworld may, in its
sole discretion, terminate this amendment (in which case this amendment shall be
null and void ab initio) and terminate the Merger Agreement.
If this letter correctly sets forth our understanding with respect
to the foregoing matters, kindly execute and return the enclosed copy of this
letter to evidence our binding agreement.
Very truly yours,
TRANSWORLD HOME HEALTHCARE,
INC.
By /s/ Robert W. Fine
--------------------------------
Name: Robert W. Fine
Title: President
IMH ACQUISITION CORP.
By /s/ Robert W. Fine
--------------------------------
Name: Robert W. Fine
Title: President
AGREED TO:
HEALTH MANAGEMENT, INC.
By /s/ Wm. James Nicol
----------------------------
Name: Wm. James Nicol
Title: President and Chief
Executive Officer
