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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) January 3, 1997
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VSI Enterprises, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-10927 84-1104448
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5801 Goshen Springs Road, Norcross, Georgia 30071
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 242-7566
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Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On January 3, 1997, Barry Rosales and Davin Gebauer, shareholders of the
Company, filed a putative class action against the Company and its Chief
Executive Officer. The lawsuit is styled Barry Rosales and Gavin Gebauer v.
VSI Enterprises, Inc. and Richard K. Snelling, Civil Action No.
1:97-CV-0009-WBH, U.S. District Court for the Northern District of Georgia,
Atlanta Division. The plaintiffs purport to represent a class of all persons
(i) who purchased the common stock of the Company on the open market between
October 6, 1995 and January 8, 1996 or (ii) who purchased the common stock of
the Company through the exercise of the Company's Class B Warrants between
October 6, 1995 and December 18, 1995. The Complaint alleges that during this
interval the defendants made material misrepresentations and omissions in
connection with the financial condition of the Company which had the effect of
artificially inflating the market price of the Company's common stock. The
Complaint alleges that by virtue of this conduct defendants violated Section
10(b) of the Securities Exchange Act of 1934 (the "1934 Act") and SEC Rule
10b-5 thereunder. The Complaint also alleges that defendant Richard K.
Snelling was a controlling person within the meaning of Section 20 of the 1934
Act and is therefore liable to the plaintiffs on that basis as well. The
Complaint seeks compensatory damages along with pre- and post-judgment interest,
reasonable attorneys fees, expert witness fees and other costs.
Under the provisions of the Company's Certificate of Incorporation, the
Company will advance on behalf of Mr. Snelling his cost of defense of the
claims against him in this action. The Company has notified its officers and
directors liability insurer of the pending litigation.
The Company and Mr. Snelling deny any liability with respect to these
claims and intend vigorously to defend them. This action is at an early
procedural stage, however, and it is not possible at this time to determine the
outcome of the lawsuit or the effect of its resolution on the Company's
financial position or operating results. Management believes that the
Company's defenses will have merit; however, there can be no assurance that the
Company will be successful in its defense or that this litigation will not have
a material adverse effect on the Company's results of operations for some
period or on the Company's financial position.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
VSI ENTERPRISES, INC.
By: /s/ B. R. Brewer
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B. R. Brewer
President
Dated: January 9, 1997
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