SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )(1)
THE HE-RO GROUP, LTD.
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(Name of issuer)
COMMON STOCK, $.01 PAR VALUE
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(Title of class of securities)
422047100
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(CUSIP number)
STEVEN WOLOSKY, ESQUIRE
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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(Name, address and telephone number of person
authorized to receive notices and communications)
MARCH 11, 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.
(Continued on following pages)
(Page 1 of 12 Pages)
Exhibit Index Appears on Page 9.
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(1) 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 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 422047100 13D Page 2 of 12 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
RONALD LABOW
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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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 OR ORGANIZATION
U.S.A.
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NUMBER OF 7 SOLE VOTING POWER
SHARES
ENEFICIALLY -0-
OWNED BY ------------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
ERSON WITH 4,430,748
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9 SOLE DISPOSITIVE POWER
-0-
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,430,748
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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)
66.0%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 422047100 13D Page 3 of 12 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
STEWART E. TABIN
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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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 OR ORGANIZATION
U.S.A.
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY
EACH -------------------------------------------------------------
REPORTING 8 SHARED VOTING POWER
PERSON WITH
4,430,748
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9 SOLE DISPOSITIVE POWER
-0-
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,430,748
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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)
66.0%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
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CUSIP No. 422047100 13D Page 4 of 12 Pages
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Item 1. Security and Issuer.
This statement relates to shares (the "Shares") of the common
stock, par value $.01 per share ("Common Stock"), of The He-Ro Group, Ltd. (the
"Issuer"). The principal executive offices of the Issuer are located at 550
Seventh Avenue, New York, NY 10018.
Item 2. Identity and Background.
(a) This Statement is filed by Ronald LaBow and Stewart E.
Tabin. Each of the foregoing is referred to herein as a "Reporting Person" and
collectively as the "Reporting Persons". Pursuant to an irrevocable proxy
described in Item 4 hereof, each of Messrs. LaBow and Tabin has the power to
vote certain Shares as described in Item 4 hereof. Accordingly, the Reporting
Persons are hereby filing a joint Schedule 13D.
(b) The principal business address of each Reporting
Person is 110 East 59th Street - 30th Floor, New York, New York 10022.
(c) The principal occupation of Mr. LaBow is President of
Stonehill Investment Corp. ("Stonehill"). Mr. LaBow is also Chairman of the
Board of WHX Corporation. The principal occupation of Mr. Tabin is Vice
President of Stonehill. Stonehill is principally engaged in the management of
certain investment partnerships and related investment activities and has its
principal address at 110 East 59th Street, New York, New York 10022.
(d) No Reporting Person has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) No Reporting Person has, during the last five years,
been party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Not applicable.
Item 4. Purpose of Transaction.
On March 11, 1997, Della Rounick ("Mrs. Rounick"), the
Co-Chairman of the Board of Directors of The He-Ro Group, Ltd. (the
"Registrant") and sole executrix of the Estate of Herbert Rounick
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CUSIP No. 422047100 13D Page 5 of 12 Pages
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(the "Estate") executed an irrevocable proxy in favor of Ronald LaBow and
Stewart E. Tabin, the President and Vice President of Stonehill, respectively,
which granted to such individuals the right to vote the 4,430,748 shares of
common stock of the Registrant, par value $.01 per share (the "Common Stock"),
currently owned by Mrs. Rounick and the Estate (which shares represent 66% of
the Common Stock currently outstanding) in favor of the transactions
contemplated by that certain Stock Purchase Agreement dated as of March 11, 1997
(the "Agreement") by and among the Registrant, Mrs. Rounick, Oleg Cassini ("Mr.
Cassini") Stonehill and Oleg Cassini, Inc. ("OCI"). Under the terms of the
Agreement, among other things, the Registrant has agreed to issue and sell to
(i) Stonehill 6,869,332 shares of Common Stock (which shares when issued will
represent approximately 20% of the then issued and outstanding shares of Common
Stock) for a purchase price of $4,000,000 payable in cash at the Closing (as
defined in the Agreement) and (ii) to Cassini 20,000,000 shares of its Common
Stock (which shares when issued will represent approximately 60% of the then
issued and outstanding shares of Common Stock) for (a) $3,000,000, of which
$1,000,000 is payable in cash at the Closing and the balance is payable by the
delivery on the Closing of two non-interest bearing promissory note of Mr.
Cassini payable to the Registrant each in the principal amount of $1,000,000,
one of which will be due on the first anniversary of the Closing and the second
of which will be due on the second anniversary of the Closing and both of which
will be secured by the shares of Common Stock to be issued to Mr. Cassini, and
(b) the execution and delivery by OCI of a certain Management License Agreement
pursuant to which on and after the Closing, the Registrant will manage the day
to day operations and supervise five of OCI's existing agreements and any future
license agreements relating to women's apparel in exchange for half of the
royalties collected under such license agreements. Under the terms of the
Agreement, Stonehill and Mr. Cassini will have the right to require the Company
to register their shares of Common Stock under certain circumstances. In
addition, pursuant to the Agreement, the Estate has agreed to sell to Stonehill
all but $1,000,000 of the approximately $6,000,000 of subordinated debt owing
from the Registrant to the Estate. Upon the Closing of the transactions
described in the Agreement, the 4,430,748 shares of Common Stock owned by Mrs.
Rounick and the Estate will represent 13% of the Common Stock to be outstanding
on the Closing Date after the issuance of shares to Stonehill and Mr. Cassini.
The Agreement also provides that, on the Closing Date: (i)
members of the Registrant's existing Board of Directors will have resigned; (ii)
the Registrant's Board of Directors will be expanded from three to seven members
consisting of Mr. Cassini, Mr. LaBow, the President and principal stockholder of
Stonehill, the Registrant's Chief Executive Officer, a designee of Mrs. Rounick
and the balance to be designated by Mr. Cassini and/or Mr. LaBow; (iii) Mr.
Cassini will be named Chairman of the Board; and (iv) the
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CUSIP No. 422047100 13D Page 6 of 12 Pages
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Registrant will be renamed Oleg Cassini Group International, Ltd. Mr. Cassini
will also provide a three-year voting trust to Mr. LaBow at the Closing.
The Closing is subject to, among other things, approval by the
Registrant's stockholders of (i) an amendment to the Registrant's Certificate of
Incorporation to change the name of the Registrant and to increase the number of
shares of Common Stock which the Registrant is authorized to issue and (ii) the
issuance of the above referenced shares of Common Stock to Stonehill and Mr.
Cassini. The transactions contemplated by the Agreement are also subject to
other third party and regulatory approvals and certain other closing conditions.
Except as described above, no Reporting Person has any present
plan or proposal which would relate to or result in any of the matters set forth
in subparagraphs (a) - (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) The aggregate percentage of Shares of Common Stock
reported owned by each person named herein is based upon 6,717,333 Shares
outstanding, which is the total number of Shares of Common Stock outstanding as
reported in the Company's Quarterly Report on Form 10-Q for the quarterly period
ended November 30, 1996.
As of the close of business on March 20, 1997, Messrs. LaBow
and Tabin may each be deemed to beneficially own 4,430,748 Shares, representing
approximately 66.0% of the Issuer's Common Stock, by virtue of the irrevocable
proxy granted to them as described in Item 4. Messrs. LaBow and Tabin each
disclaims beneficial ownership of such Shares.
(b) By virtue of the irrevocable proxy described in Item
4, each of Messrs. LaBow and Tabin has the power to vote the Shares reported in
this Schedule 13D.
(c) No transactions in the Issuer's Common Stock were
effected in the last sixty days by the Reporting Persons.
(d) No person is known to have the right to receive, or
the power to direct the receipt of, dividends from or the proceeds from the sale
of such Shares of the Common Stock, other than Mrs. Rounick and the Estate.
(e) Not applicable.
Item 6. Contracts, Agreements, Understandings or Relationships
with Respect to Securities of the Issuer.
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CUSIP No. 422047100 13D Page 7 of 12 Pages
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Other than as described herein, there are no contracts,
arrangements or understandings among the Reporting Persons, or between the
Reporting Persons and any other Person, with respect to the securities of the
Issuer.
Item 7. Material to be Filed as Exhibits.
1. Irrevocable Proxy
2. Joint Filing Agreement
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CUSIP No. 422047100 13D Page 8 of 12 Pages
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SIGNATURES
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After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: March 21, 1997
s/ Ronald LaBow
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Ronald LaBow
s/ Stewart E. Tabin
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Stewart E. Tabin
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CUSIP No. 422047100 13D Page 9 of 12 Pages
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EXHIBIT INDEX
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Exhibit Page
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1. Irrevocable Proxy 10
2. Joint Filing Agreement 12
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CUSIP No. 422047100 13D Page 10 of 12 Pages
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IRREVOCABLE PROXY
Della Rounick ("DR") individually and as sole executrix of the
Estate of Herbert Rounick (the "Estate") have entered into a certain agreement
dated as March 11, 1997 (the "Agreement") by and between Stonehill Investment
Corp., a New York corporation ("Stonehill") Oleg Cassini Inc. ("Cassini")
(Stonehill and Cassini are sometimes heretofore collectively referred to as the
"Purchasers"), Oleg Cassini, Inc. ("O.C.I.") and The He-Ro Group, Ltd. (the
"Company").
WHEREAS as an inducement for the Purchasers to enter into the
Agreement, DR individually and as sole executrix of the Estate of Herbert
Rounick, as the beneficial and record owners of 4,430,748 shares of common stock
of the Company (the "Shares") has agreed to vote all of the Shares in favor of
the transactions and other matters requiring stockholder vote of the Company as
contemplated by the Agreement and has agreed to execute this Proxy for the
benefit of the Purchasers and as an inducement for them to enter into the
Agreement. It is intended that this Proxy shall be binding upon DR, the Estate
and their respective heirs, successors and assigns.
Accordingly, KNOW ALL MEN BY THESE PRESENCE that DELLA ROUNICK
and THE ESTATE OF HERBERT ROUNICK jointly and severally, hereby appoint Ronald
LaBow and Stewart E. Tabin, individually as their proxies, with full power of
substitution and grants to each of Ronald LaBow and Stewart E. Tabin complete
control over all rights to vote or consent (including rights to be present or
absent for quorum purposes) with respect to any and all shares of common stock
of the Company which Della Rounick and the Estate of Herbert Rounick may own or
hold during the term of this Proxy, with respect to all matters which may come
before meetings of the stockholders of the Company (or actions by written
consent in lieu of meetings with respect to the transactions contemplated by the
Agreement which require stockholder vote including, but not limited to, an
increase in the capitalization of the Company, the amendment of the certificate
of incorporation of the Company changing the name of the Company and the
election of directors of the Company. This Proxy shall expire on the earlier of
(i) the closing of the transactions contemplated by the Agreement, (ii) May 31,
1997 or (iii) the earlier termination of the Agreement. Della Rounick and the
Estate of Herbert Rounick hereby affirm that this Proxy is given for the purpose
of and should be construed so as to effectuate the purposes set forth above, and
that this Proxy is coupled with an interest and is irrevocable during the term
hereof.
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CUSIP No. 422047100 13D Page 11 of 12 Pages
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IN WITNESS WHEREOF, Della Rounick and the Estate of Herbert
Rounick, individually and executor of the Estate of Herbert Rounick have
executed this Proxy this 11 day of March, 1997.
s/ Della Rounick
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Della Rounick
ESTATE OF HERBERT ROUNICK
By: s/ Della Rounick
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Della Rounick, Executrix
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CUSIP No. 422047100 13D Page 12 of 12 Pages
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JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f)(1)(iii) under the Securities
Exchange Act of 1934, as amended, the persons named below agree to the joint
filing on behalf of each of them of a Statement on Schedule 13D dated March 21,
1997 (including amendments thereto) with respect to the Common Stock of The
He-Ro Group, Ltd. This Joint Filing Agreement shall be filed as an Exhibit to
such Statement.
Dated: March 21, 1997
s/ Ronald LaBow
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Ronald LaBow
s/ Stewart E. Tabin
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Stewart E. Tabin
