UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Amendment No. 2
Under the Securities Exchange Act of 1934
THE HE-RO GROUP, LTD.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
422047 10 9
(CUSIP Number)
Check the following box if a fee is being paid with this statement [X]. (A fee
is not required only if the filing person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
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CUSIP No. 422047 10 0 Amendment No. 2 13-G Page 2 of 6
Item 1.
(a) Name of Issuer:
The He-Ro Group, Ltd. (the "Company")
(b) Name of Issuer's Principal Executive Offices:
550 Seventh Avenue
New York, New York 10018
Item 2.
(a) Name of Reporting Person:
The Estate of Herbert Rounick
(b) Address of Principal Business Office, or, if none,
Residence:
15 West 53rd Street
New York, New York 10019
(c) Citizenship:
United States of America
(d) Title of Class of Securities:
Common Stock, par value $.10 per share of The He-Ro
Group, Ltd. ("Common Stock")
(e) CUSIP Number:
422047 10 0
Item 3. If this statement is filed pursuant to Rule 13d-1(b), or 13d-2(b),
check whether the person is:
Not applicable
Item 4. Ownership:
(a) Amount Beneficially Owned:
4,409,066
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CUSIP No. 422047 10 0 Amendment No. 2 13-G Page 3 of 6
(b) Percent of Class:
66%
(c) Number of shares as to which such person has:
(i) sole voting power: 0
(ii) shared voting power: 4,409,066
(iii) sole dispositive power: 4,409,066
(iv) shared dispositive power: 0
Item 5. Ownership of Five Percent or Less of a Class:
If this statement is being filed to report the fact that as of the
date hereof, the reporting person has ceased to be the beneficial owner of more
than five percent of the class of securities, check the following. [ ]
Item 6. Ownership of More than Five Percent on Behalf of Another Person:
The Estate of Herbert Rounick (the "Estate") owns 4,409,066 shares of
Common Stock, representing approximately 66% of the outstanding Common Stock.
Vasiliki Della Pasvantidou Rounick ("Mrs. Rounick"), the widow of Mr. Rounick
and the Co-Chairman of the Company, is the sole executrix of the Estate and
under the terms of Herbert Rounick's Will, (and except as disclosed in the
succeeding paragraphs hereof) she has the sole power to vote and to dispose of
the shares of the Common Stock owned by the Estate. Mrs. Rounick also owns
directly 21,682 shares of Common Stock.
On March 11, 1997, Mrs. Rounick executed an irrevocable proxy
authorizing Messrs. Ronald LaBow ("Mr. LaBow") and Stewart E. Tabin, the
President and Vice President, respectively, of Stonehill Investment Corp.
("Stonehill") to vote the 4,430,748 shares of Common Stock currently owned by
the Estate and Mrs. Rounick (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 Company, Mrs. Rounick (individually and on behalf of the Estate), Oleg
Cassini ("Mr. Cassini"), Stonehill and Oleg Cassini, Inc. (" OCI"). Under the
terms of the Agreement, among other things, the Company 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%
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CUSIP No. 422047 10 0 Amendment No. 2 13-G Page 4 of 6
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 notes of
Mr. Cassini payable to the Company 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 Company will manage the day to
day operations and supervise five of OCI's existing license 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 Company to the Estate. Upon the Closing of the transactions described
in the Agreement, the 4,430,748 shares of Common Stock owned by the Estate and
Mrs. Rounick 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) the members
of the Company's existing Board of Directors will have resigned, (ii) the
Company'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 Company'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 Company will be renamed Oleg
Cassini Group International, Ltd. In addition, based upon the information
contained in the Schedule 13D dated March 21, 1997 filed by Messrs. LaBow and
Stewart E. Tabin, the undersigned understands that 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
Company's stockholders of (i) an amendment to the Company's Certificate of
Incorporation to change the name of the Company and to increase the number of
shares of Common Stock which the Company 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.
Accordingly, there can be no assurance that the Company will consummate the
transactions contemplated by the Agreement.
Item 7. Identification and Classification of the Subsidiary Which Acquired the
Security Being Reported on By the Parent Holding Company:
Not applicable.
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CUSIP No. 422047 10 0 Amendment No. 2 13-G Page 5 of 6
Item 8. Identification and Classification of Members of the Group:
Not applicable.
Item 9. Notice of Dissolution of Group:
Not applicable.
Item 10. Certification:
Not applicable.
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CUSIP No. 422047 10 0 Amendment No. 2 13-G Page 6 of 6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
March 24, 1997
THE ESTATE OF HERBERT ROUNICK
By: /s/ Della Vasiliki Pasvantidou Rounick,
---------------------------------------
Della Vasiliki Pasvantidou Rounick,
sole executrix
