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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 5, 2000
MATTHEWS STUDIO EQUIPMENT GROUP
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation)
0-18102 95-1447751
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(Commission file number) (I.R.S. Employer Identification Number)
3111 North Kenwood Street, Burbank, CA 91505
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(Address of principal executive office) (Zip Code)
(818) 525-5200
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year, if changed since last
report)
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Item 2. Acquisition or Disposition of Assets
On December 5, 2000, Matthews Studio Equipment Group (the "Company") and
certain of its subsidiaries (Hollywood Rental Company, LLC, HDI Holdings, Inc.
and Matthews Studio Sales, Inc.) signed an Asset Purchase Agreement with
Hollywood Rentals Production Services, LLC (the "Buyer") to sell the Company's
Hollywood Rentals, HDI, ESS, Olesen and Four Star West operations for $17
million. The transaction is a sale of assets, with the Buyer assuming only
specified liabilities. The purchase price is payable $13 million in cash on
closing and $4 million in the form of a five-year note. The transaction was
reached through arms' length negotiation.
The transaction is subject to customary closing conditions such as the
absence of a material adverse change to the assets. The transaction is also
subject to closing conditions that apply to a sale in a bankruptcy context, such
as approval by the bankruptcy court. Closing of the transaction is to occur no
later than January 29, 2001.
The Buyer is an affiliate of Raleigh Enterprises (a company whose Chief
Financial Officer, Anil Sharma, is also a member of the board of directors of
the Company), Jules & Associates, Inc., and CDM Interactive, Inc. (a company
owned by Carlos D. DeMattos, the Chairman and Chief Executive Officer of the
Company).
The Company is working with Imperial Capital, LLC to sell the remaining
assets of the Company, which principally consist of the Four Star New York
operation that rents theatrical lighting equipment to Broadway shows, and/or to
obtain an equity investment in the Company that would allow the Company to
continue part of its business operations under a plan of reorganization.
Regardless of whether the Company is successful in selling all of its assets or
is able to reorganize its business by obtaining an additional equity investment,
the Company expects that the equity interest of the existing shareholders of the
Company will be extinguished. In no event does the Company believe that it will
able to realize enough cash from the sale of its assets to satisfy the claims of
the Company's secured and unsecured creditors and still make a distribution to
its existing shareholders. Accordingly, the Company expects that existing
shareholders will not receive any proceeds from the sale of the Company's assets
and will not retain any ownership interest in the Company if the Company
attempts to reorganize.
There can be no assurance that the Company will be able to sell its
remaining assets as ongoing businesses rather than as sales in liquidation or
induce a third party to invest in the Company under a plan of reorganization.
Further, pending consummation of any transaction, the Company's business
continues to be negatively affected by a number of factors and risks, including
but not limited to, the factors described in the Company's filings with the
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Securities and Exchange Commission; and the ability of the Company to operate
successfully under a Chapter 11 proceeding; obtain shipments and negotiate terms
with vendors and service providers for current orders; attract and retain
customers; generate cash flow; attract and retain key executives and associates;
meet competitive pressures which may affect the nature and viability of the
Company's business strategy; and manage its business notwithstanding potential
adverse publicity.
Copies of the Company's Press Release and the Asset Purchase Agreement are
attached as exhibits.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 8-K to be signed on its behalf by
the undersigned hereunto duly authorized.
MATTHEWS STUDIO EQUIPMENT GROUP
(Registrant)
Date: December 12, 2000 By: /s/ Miles R. Stover
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Miles R. Stover
Chief Operating Officer
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(2)(c) Exhibits
EXHIBIT INDEX
Exhibit Document Description
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99.6 Press Release
10.28 Asset Purchase Agreement dated December 5,
2000, among Matthews Studio Equipment Group,
Hollywood Rental Company, LLC, HDI Holdings,
Inc., and Matthews Studio Sales, Inc., as
sellers, and Hollywood Rentals Production
Services, LLC, as buyer, but without
schedules.
