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): June 5, 1997
SCOTT'S LIQUID GOLD-INC.
(Exact name of Registrant as specified in its charter)
Colorado 0-12343 84-0920811
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
4880 Havana Street, Denver, CO 80239
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 373-4860
Item 5. Other Events.
On June 5, 1997, Scott's Liquid Gold-Inc. (the "Company") was served in a
lawsuit brought in the United States District Court for the District of Colorado
by Norman Brooks, Leslee Brooks and Norman A. Brooks, M.D., Inc. Other
defendants include the Company's wholly-owned subsidiary Neoteric Cosmetics,
Inc., Jerome J. Goldstein and the Goldstein Family Limited Partnership. Jerome
J. Goldstein is Chairman of the Board of the Company and the father of Mark E.
Goldstein, President and Chief Executive Officer of the Company. The Goldstein
Family Limited Partnership was established by Mr. and Mrs. Jerome J. Goldstein
in November, 1996 and received common stock of the Company previously held by
Mr. and Mrs. Goldstein. Leslee Brooks is a daughter of Mr. and Mrs. Jerome J.
Goldstein and a sister of Mark E. Goldstein. Norman Brooks is the husband of
Leslee Brooks.
The plaintiffs claim that their disclosure to the Company in 1991 of the
concept of an alpha hydroxy acid based product, as well as their assistance in
developing the Company's Alpha Hydrox for the over-the-counter consumer market,
benefited the Company and entitles the plaintiffs under a doctrine of unjust
enrichment to compensation in an amount equal to at least one-third of the
income from the product since its inception. The plaintiffs also request
punitive damages. In related claims against Jerome J. Goldstein, the plaintiffs
allege that Jerome J. Goldstein breached a fiduciary duty owed to Dr. and Ms.
Brooks, that Jerome J. Goldstein fraudulently induced them to disclose the
product concept to the Company and assist the Company in the development of an
alpha hydroxy acid product line and that the resulting damages are at least
equal to one-third of the income from the product. The plaintiffs further claim
that there should be a "constructive trust" imposed on the stock transferred to
the Goldstein Family Limited Partnership.
The Company believes that there was no agreement, either written or oral,
to provide any compensation to the plaintiffs beyond consulting fees paid by the
Company to the Brooks that there was no expectation of such compensation, and
that the compensation already paid to the Brooks for consulting services was
fair and reasonable. The Company views the lawsuit as groundless and intends
to defend itself vigorously in the lawsuit.
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.
Scott's Liquid Gold-Inc.
(Registrant)
Date: June 6, 1997 By: /s/ Barry Shepard
Barry Shepard, Treasurer
