SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(a)
(AMENDMENT NO. ____)(1)
PARTY CITY CORPORATION
----------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title of Class of Securities)
702145103
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(CUSIP Number)
BARBARA D. SHERMAN
GOLDMAN, SACHS & CO.
CENTRAL COMPLIANCE
85 BROAD ST., 12TH FL.
NEW YORK, NY 10004
(212) 902-7196
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
AUGUST 16, 1999
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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 that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box |_|.
(Continued on the following pages)
Page 1 of 7 Pages
*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 the disclosures provided in a prior cover page.
The information required in 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, as amended (the "Exchange Act") or otherwise subject
to the liabilities of that section of the Exchange Act but shall be subject
to all other provisions of the Exchange Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 702145103 Page 2 of 7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Goldman, Sachs & Co.
IRS No.:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -----------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES ------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED 2,867,000(1)
BY EACH ------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH ------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,867,000 shares(1)
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,867,000 shares(1)
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.7%(2)
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
BD - PN - IA
- -----------------------------------------------------------------------------
(1) Shares are issuable upon exercise of the Warrant (described in Items 3
and 4 below).
(2) Based on 12,455,538 shares of Common Stock outstanding as of August 16,
1999, as represented by Party City Corporation in the Securities
Purchase Agreement (described in Items 3 and 4 below) and computed in
accordance with Rule 13d-3(d)(1).
<PAGE>
SCHEDULE 13D
CUSIP No. 702145103 Page 3 of 7
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
The Goldman, Sachs Group, Inc.
IRS. No.:
- -----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- -----------------------------------------------------------------------------
3 SEC USE ONLY
- -----------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- -----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
- -----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF
SHARES ------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED 2,867,000(1)
BY EACH ------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH ------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,867,000 shares(1)
- -----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,867,000 shares(1)
- -----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.7%(2)
- -----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC - CO
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(1) Shares are issuable upon exercise of the Warrant (described in Items 3
and 4 below).
(2) Based on 12,455,538 shares of Common Stock outstanding as of August 16,
1999, as represented by Party City Corporation in the Securities
Purchase Agreement (described in Items 3 and 4 below) and computed in
accordance with Rule 13d-3(d)(1).
<PAGE>
Page 4 of 7
Item 1. Security and Issuer.
This statement on Schedule 13D relates to the Common Stock, par
value $.01 per share ("Common Stock"), of Party City Corporation, a
Delaware corporation ("Party City"). The principal executive offices of
Party City are located at 400 Commons Way, Rockaway, New Jersey 07866.
Item 2. Identity and Background.
Goldman, Sachs & Co. ("Goldman Sachs"), a New York limited
partnership, is an investment banking firm and a member of the New York
Stock Exchange, Inc. and other national exchanges. Goldman Sachs is a
wholly owned direct and indirect subsidiary of The Goldman Sachs Group,
Inc. ("GS Group" and, together with Goldman Sachs, the "Reporting Persons")(1).
GS Group is a Delaware corporation and a holding company that (directly or
indirectly through subsidiaries or affiliated companies or both) is a
leading investment banking organization. The principal business address of
each Reporting Person is 85 Broad Street, New York, NY 10004.
- ----------------
(1) Neither the present filing nor anything contained herein shall be
construed as an admission that any Filing Person constitutes a "person"
for any purposes other than Section 13(d) of the Securities Exchange
Act of 1934.
The name, business address, present principal occupation or
employment and citizenship of each director of GS Group are set forth in
Schedule I hereto, to read in its entirety as attached hereto, and are
incorporated herein by reference.
During the last five years, none of the Reporting Persons, or, to
the knowledge of each of the Filing Persons, any of the persons listed on
Schedule I, (i) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) has been a 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.
The statement relates to the acquisition by Goldman Sachs of a
warrant dated as of August 16, 1999 (the "Warrant") to purchase 2,867,000
shares of Common Stock of Party City. Party City issued the Warrant
pursuant to the Securities Purchase Agreement between Party City and
Goldman Sachs dated as of August 16, 1999 (the "Securities Purchase
Agreement"). The Warrant was acquired by Goldman Sachs in connection with
the purchase by Goldman Sachs Credit Partners L.P. ("GSCP"), an affiliate
of Goldman Sachs, of certain secured notes of Party City in the aggregate
principal amount of $6,250,000. The aggregate purchase price for the
Warrant and such secured notes was $6,250,000. The source of funds for the
purchase of the secured notes was GSCP's general working capital. Upon
exercise of the Warrant in full, Goldman Sachs must pay an exercise price
of $3.00 per share for an aggregate exercise price of $8,601,000. It is
presently anticipated that the source of funds for the exercise price will
be Goldman Sachs' general working capital or the working capital of an
affiliate.
Item 4. Purpose of Transaction.
The Reporting Persons acquired the Warrant for investment
purposes. They intend to monitor and evaluate the investment on a
continuing basis; and based upon their evaluation from time to time, they
may, subject to the terms of the Investor Rights Agreement (defined below),
acquire additional shares of Common Stock of Party City, dispose of the
Warrant or the underlying shares of Common Stock beneficially owned by
them, submit one or more proposals for the consideration of management of
Party City, and/or communicate with other stockholders of Party City.
<PAGE>
Page 5 of 7
Party City, Party City's Chairman and Chief Executive Officer,
Goldman Sachs, GSCP and certain other purchasers of secured notes and/or
warrants of Party City have entered into an Investor Rights Agreement dated
as of August 16, 1999 (the "Investor Rights Agreement"), pursuant to which
a certain Party City board member has resigned as a director of Party City
and a nominee of one other purchaser, Howard Levkowitz, and a nominee of
Goldman Sachs, GSCP and the remaining other purchasers, Matthew R. Kahn,
have become directors of Party City.
Except as set forth above, the Reporting Persons have no plans
or proposals that relate to or would result in any of the matters referred
to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D. The
Reporting Persons, however, may at any time and from time to time, review
or reconsider their position with respect to any of such matters.
The foregoing description of the Warrant, the Securities
Purchase Agreement and the Investor Rights Agreement is qualified in its
entirety by reference to the form of Warrant, form of Securities Purchase
Agreement and Investor Rights Agreement, copies of which have been filed as
exhibits to Party City's Current Report on Form 8-K filed with the
Securities and Exchange Commission on August 25, 1999 (File No. 0-27826)
and are incorporated by reference herein.
Item 5. Interest in Securities of the Issuer.
(a) As of August 16, 1999, Goldman Sachs beneficially owned, and GS
Group may be deemed to have beneficially owned, an aggregate of 2,867,000
shares of Common Stock issuable upon exercise of the Warrant, representing
approximately 18.7% of the Common Stock outstanding in accordance with the
Company's representation in the Securities Purchase Agreement of the number
of shares of Common Stock outstanding as of August 16, 1999, and as
computed in accordance with Rule 13d-3(d)(1).
None of the Reporting Persons or, to the knowledge of each of the
Reporting Persons, the persons listed on Schedule I hereto, beneficially
owns any shares of Common Stock other than as set forth herein.
(b) Each Reporting Person shares the power to vote or direct the vote
and to dispose or to direct the disposition of the Common Stock
beneficially owned by such Reporting Person as indicated in pages 2 and 3
above.
(c) No transactions in the Common Stock were effected by the
Reporting Persons, or, to their knowledge, any of the persons listed on
Schedule I hereto, during the sixty days prior to the date of this
statement.
(d) No other person is known by any Reporting Person to have the
right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, any Common Stock beneficially owned by any
Reporting Person.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except for the Warrant, the Securities Purchase Agreement, the
Investor Rights Agreement and related documents executed in connection
therewith, to the knowledge of the Reporting Persons, there are no
contracts, arrangements, understandings or relationships (legal or
otherwise) between the Reporting Persons and any other person with respect
to any securities of Party City, including, but not limited to, transfer or
voting of any of the securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Copies of the form of Warrant, form of Securities Purchase
Agreement and Investor Rights Agreement have been filed as exhibits to
Party City's Current Report on Form 8-K filed with the Securities and
Exchange Commission on August 25, 1999 (File No. 0-27826) and are
incorporated by reference herein.
<PAGE>
Page 6 of 7
Item 7. Material to be Filed as Exhibits.
Exhibit 4.1 Form of Warrant , dated August 16, 1999, of Party City
Corporation, incorporated herein by reference to Exhibit
4.1 to Current Report on Form 8-K of Party City
Corporation filed with the Securities and Exchange
Commission on August 25, 1999 (File No. 0-27826).
Exhibit 10.1 Investor Rights Agreement, dated August 16, 1999 by and
between Party City Corporation, Tennenbaum & Co., LLC,
TCO/Party City, LLC, Enhanced Retail Funding, LLC,
Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P.,
and Richmond Associates, L.P., incorporated herein by
reference to Exhibit 10.1 to Current Report on Form 8-K
of Party City Corporation filed with the Securities and
Exchange Commission on August 25, 1999 (File No.
0-27826).
Exhibit 99.1 Form of Securities Purchase Agreement, dated August 16,
1999 by and between Party City Corporation and Tennenbaum
& Co., LLC., incorporated herein by reference to Exhibit
4.6 to Current Report on Form 8-K of Party City
Corporation filed with the Securities and Exchange
Commission on August 25, 1999 (File No. 0-27826).
Exhibit 99.2 Power of Attorney, dated December 21, 1998, relating to
Goldman, Sachs & Co.
Exhibit 99.3 Power of Attorney, dated May 7, 1999, relating to The
Goldman Sachs Group, Inc.
<PAGE>
Page 7 of 7
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: August 27, 1999 GOLDMAN, SACHS & CO.
By: /s/ Hans L. Reich
_______________________________
Name: Hans L. Reich
Title: Attorney-in-Fact
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: August 27, 1999 THE GOLDMAN SACHS GROUP, INC.
By: /s/ Hans L. Reich
_______________________________
Name: Hans L. Reich
Title: Attorney-in-Fact
<PAGE>
SCHEDULE I
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The name of each director of The Goldman Sachs Group, Inc. is
set forth below.
The business address of each person listed below except John
L. Thornton, Sir John Browne and James A. Johnson is 85 Broad Street, New
York, NY 10004. The business address of John L. Thornton is 133 Fleet
Street, London EC4A 2BB, England. The business address of Sir John Browne
is BP Amoco plc, Brittanic House, 1 Finsbury Circus, London EC2M, England.
The business address of James A. Johnson is Fannie Mae, 3900 Wisconsin
Avenue NW, Washington, D.C. 20016. Each person is a citizen of the United
States of America except for Sir John Browne, who is a citizen of the
United Kingdom. The present principal occupation or employment of each of
the listed persons is set forth below.
Name Present Principal Occupation
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Henry M. Paulson, Jr. Chairman and Chief Executive Officer of The Goldman
Sachs Group, Inc.
Robert J. Hurst Vice Chairman of The Goldman Sachs Group, Inc.
John A. Thain President and Co-Chief Operating Officer of The
Goldman Sachs Group, Inc.
John L. Thornton President and Co-Chief Operating Officer of The
Goldman Sachs Group, Inc.
Sir John Browne Group Chief Executive of BP Amoco plc
James A. Johnson Chairman of the Executive Committee of the Board of
Fannie Mae
John L. Weinberg Senior Chairman of The Goldman Sachs Group, Inc.
Exhibit (99.1)
POWER OF ATTORNEY
This power of attorney will expire on December 31, 2000.
KNOW ALL PERSONS BY THESE PRESENTS that GOLDMAN, SACHS & CO. (the
"Company") does hereby make, constitute and appoint each of Hans L. Reich
and Roger S. Begelman, acting individually, its true and lawful attorney,
to execute and deliver in its name and on its behalf whether the Company is
acting individually or as representative of others, any and all filings
required to be made by the Company under the Securities Exchange Act of
1934, as amended, giving and granting unto each said attorney-in-fact power
and authority to act in the premises as fully and to all intents and
purposes as the Company might or could do if personally present by one of
its authorized signatories, hereby ratifying and confirming all that said
attorney-in-fact shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly subscribed these
presents as of December 21, 1998.
GOLDMAN, SACHS & CO.
By: The Goldman, Sachs & Co. L.L.C.
By: /s/ Robert J. Katz
---------------------------------
Name: Robert J. Katz
Title: Executive Vice President
Exhibit (99.2)
POWER OF ATTORNEY
This power of attorney will expire on May 31, 2001.
KNOW ALL PERSONS BY THESE PRESENTS that THE GOLDMAN SACHS GROUP, INC.
(the "Company") does hereby make, constitute and appoint each of Hans L.
Reich and Roger S. Begelman, acting individually, its true and lawful
attorney, to execute and deliver in its name and on its behalf whether the
Company is acting individually or as representative of others, any and all
filings required to be made by the Company under the Securities Exchange
Act of 1934, as amended, giving and granting unto each said
attorney-in-fact power and authority to act in the premises as fully and to
all intents and purposes as the Company might or could do if personally
present by one of its authorized signatories, hereby ratifying and
confirming all that said attorney-in-fact shall lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly subscribed these
presents as of May 7, 1999.
THE GOLDMAN SACHS GROUP, INC.
By: /s/ Robert J. Katz
---------------------------------
Name: Robert J. Katz
Title: Executive Vice President and
General Counsel
