<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 2)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
TOPS APPLIANCE CITY, INC.
(NAME OF ISSUER)
COMMON STOCK, NO PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
890910AB
(CUSIP NUMBER)
STEVEN A. VAN DYKE
TOWER INVESTMENT GROUP, INC.
BAY HARBOUR MANAGEMENT, L.C.
777 SOUTH HARBOUR ISLAND BOULEVARD, SUITE 270
TAMPA, FLORIDA 33602
(813) 272-1992
DOUGLAS P. TEITELBAUM
885 Third Avenue
34th Floor
New York, New York 10022
(212) 371-2211
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 5, 1998
(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(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
Note. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on the following pages)
(Page 1 of 10 Pages)
<PAGE>
CUSIP No. 890910AB 13D Page 2 of 10 Pages
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON Steven A. Van Dyke
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
- ---------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
- ---------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO, PF
- ---------------------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ---------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION United States
- ---------------------------------------------------------------------------------------------------------
Number of 7 SOLE VOTING POWER -0-
Shares
-----------------------------------------------------------------------------------------
Beneficially
Owned by 8 SHARED VOTING POWER 6,305,000
------------------------------------------------------------------------------------------
Each Reporting 9 SOLE DISPOSITIVE POWER -0-
------------------------------------------------------------------------------------------
Person With 10 SHARED DISPOSITIVE POWER 6,305,000
- ---------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,305,000
- ---------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- ---------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.8%
- ---------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON IN, HC
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CUSIP No. 890910AB 13D Page 3 of 10 Pages
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON Douglas P. Teitelbaum
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
- ---------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
- ---------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
- ---------------------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ---------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION United States
- ---------------------------------------------------------------------------------------------------------
Number of 7 SOLE VOTING POWER -0-
Shares
-----------------------------------------------------------------------------------------
Beneficially
Owned by 8 SHARED VOTING POWER 6,300,000
------------------------------------------------------------------------------------------
Each Reporting 9 SOLE DISPOSITIVE POWER -0-
------------------------------------------------------------------------------------------
Person With 10 SHARED DISPOSITIVE POWER 6,300,000
- ---------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,300,000
- ---------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- ---------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.8%
- ---------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON IN, HC
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CUSIP No. 890910AB 13D Page 4 of 10 Pages
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON Tower Investment Group, Inc.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 59-2924229
- ---------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
- ---------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
- ---------------------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ---------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Florida
- ---------------------------------------------------------------------------------------------------------
Number of 7 SOLE VOTING POWER 6,300,000
Shares
-----------------------------------------------------------------------------------------
Beneficially
Owned by 8 SHARED VOTING POWER -0-
------------------------------------------------------------------------------------------
Each Reporting 9 SOLE DISPOSITIVE POWER 6,300,000
------------------------------------------------------------------------------------------
Person With 10 SHARED DISPOSITIVE POWER -0-
- ---------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,300,000
- ---------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- ---------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.8%
- ---------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON HC
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CUSIP No. 890910AB 13D Page 5 of 10 Pages
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON Bay Harbour Management, L.C.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 59-3418243
- ---------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [x]
- ---------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS OO
- ---------------------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
- ---------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Florida
- ---------------------------------------------------------------------------------------------------------
Number of 7 SOLE VOTING POWER 6,300,000
Shares
-----------------------------------------------------------------------------------------
Beneficially
Owned by 8 SHARED VOTING POWER -0-
------------------------------------------------------------------------------------------
Each Reporting 9 SOLE DISPOSITIVE POWER 6,300,000
------------------------------------------------------------------------------------------
Person With 10 SHARED DISPOSITIVE POWER -0-
- ---------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,300,000
- ---------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- ---------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.8%
- ---------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON IA
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
This Amendment No. 2 amends and supplements the Statement on Schedule
13D, originally filed with the U.S. Securities and Exchange Commission (the
"SEC") on July 6, 1998, as amended on August 12, 1998 (the "Schedule 13D"), by
Bay Harbour Management, L.C. ("Bay Harbour"), Tower Investment Group, Inc.
("Tower"), as the majority stockholder of Bay Harbour, Steven A. Van Dyke ("Van
Dyke"), in his capacity as a stockholder and President of Tower, and Douglas P.
Teitelbaum, in his capacity as a stockholder of Tower (collectively, the
"Reporting Persons"). Capitalized terms contained herein but not otherwise
defined have the meanings ascribed to them in the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Schedule 13D is hereby amended in its entirety as follows:
On June 25, 1998, Bay Harbour purchased for certain managed accounts,
in a secondary purchase, 6-1/2% Convertible Subordinated Debentures Due 2003 of
Tops in the aggregate principal amount of $6,090,000 (such Debentures held by
Bay Harbour, the "Debentures"), at a price of 93% of principal plus accrued
interest. As of September 25, 1998, the Debentures were converted into 3,480,000
shares of Tops Common Stock at a conversion price of $1.75 per share pursuant to
a Conversion Letter Agreement (the "Conversion Letter Agreement"), dated July
16, 1998, between Tops and Bay Harbour. The source of the funds used by Bay
Harbour to purchase the Debentures were the following investment accounts
managed on a discretionary basis by Bay Harbour:
<TABLE>
<CAPTION>
<S> <C>
Bay Harbour Partners, Ltd. $2,281,196.33
Lipstick, Ltd. $1,986,541.81
Bay Harbour 90-1, L.P. $1,520,797.56
</TABLE>
On July 20, 1998, Bay Harbour purchased from Tops for certain managed
accounts, 1,400,000 newly-issued shares of Tops Common Stock (the "New Shares"),
for an aggregate purchase price of $5,040,000 pursuant to the terms of the Share
Purchase Agreement (the "Tops Purchase Agreement"), dated July 16, 1998, between
Bay Harbour and Tops. The source of the funds used by Bay Harbour to purchase
the New Shares were the following investment accounts managed on a discretionary
basis by Bay Harbour:
<TABLE>
<CAPTION>
<S> <C>
Bay Harbour Partners, Ltd. $1,986,120
Bay Harbour 90-1, L.P. $1,324,080
Trophy Hunter Investments, L.P. $1,729,800
</TABLE>
On July 22, 1998, Van Dyke purchased for a personal account, jointly
held with his wife, Ann Van Dyke, 5,000 shares of Tops Common Stock (the "Van
Dyke Shares"), for an aggregate purchase price of $15,625. The source of the
funds used by Van Dyke and Ann Van Dyke to purchase the Van Dyke Shares were
their personal funds.
On July 24, 1998, Bay Harbour purchased for certain managed accounts,
in a secondary purchase, 200,000 shares of Tops Common Stock (the "Turchin
Shares"), at an aggregate purchase price of $600,000. The source of the funds
used by Bay Harbour to purchase the Turchin Shares were the following investment
accounts managed on a discretionary basis by Bay Harbour:
<TABLE>
<CAPTION>
<S> <C>
Bay Harbour Partners, Ltd. $236,400
Bay Harbour 90-1, L.P. $157,800
Trophy Hunter Investments, L.P. $205,800
</TABLE>
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<PAGE>
On August 11, 1998, Bay Harbour purchased for certain managed
accounts, in a secondary purchase, 300,000 shares of Tops Common Stock (the
"Westinghouse Shares"), for an aggregate purchase price of $900,000. The source
of the funds used by Bay Harbour to purchase the Westinghouse Shares were the
following investment accounts managed on a discretionary basis by Bay Harbour:
<TABLE>
<CAPTION>
<S> <C>
Bay Harbour Partners, Ltd. $354,666
Bay Harbour 90-1, L.P. $236,442
Trophy Hunter Investments, L.P. $308,892
</TABLE>
On October 5, 1998, Bay Harbour received 420,000 shares of newly-
issued Tops Common Stock (the "Initial Adjustment Stock") from Tops in
connection with the purchase price adjustment provisions of the Tops Purchase
Agreement.
On October 22, 1998, Bay Harbour requested from Tops an adjustment
payment (the "Additional Adjustment Payment") in either cash or Tops Common
Stock pursuant to the adjustment provisions of the Tops Purchase Agreement.
See Item 6 for a description of certain agreements under which Bay
Harbour has the right to purchase additional shares of Tops Common Stock from
certain shareholders.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Schedule 13D is hereby amended in its entirety as follows:
As of the filing date of this Statement, (i) Van Dyke beneficially
owns 6,305,000 shares of Tops Common Stock, which represent approximately 46.8%
of Tops Common Stock outstanding, (ii) Teitelbaum beneficially owns 6,300,000
shares of Tops Common Stock, which represent approximately 46.8% of Tops Common
Stock outstanding, (iii) Tower beneficially owns 6,300,000 shares of Tops Common
Stock, which represent approximately 46.8% of Tops Common Stock outstanding and
(iv) Bay Harbour beneficially owns 6,300,000 shares of Tops Common Stock, which
represent approximately 46.8% of Tops Common Stock outstanding, in each case,
based upon 13,471,931 shares of Tops Common Stock outstanding as of October 5,
1998 (determined based upon 9,571,931 shares outstanding as set forth in an
Information Statement filed on August 28, 1998 with the SEC by Tops plus (x)
3,480,000 shares due to the conversion of the Debentures and (y) 420,000 shares
comprising the Initial Adjustment Stock). For purposes of disclosing the number
of shares beneficially owned by each of the Reporting Persons, (A) Van Dyke and
Teitelbaum are deemed to beneficially own all shares of Tops Common Stock that
are beneficially owned by Tower and Bay Harbour and (B) Tower is deemed to
beneficially own all shares of Tops Common Stock that are beneficially owned by
Bay Harbour.
Each Reporting Person has (i) the sole power to vote or direct the
vote of the 6,300,000 shares of Tops Common Stock held by Bay Harbour; and (ii)
the sole power to dispose of or to direct the disposition of such 6,300,000
Shares of Tops Common Stock; except that Van Dyke and Teitelbaum share with each
other their voting and disposition power. In addition, Van Dyke, together with
his wife Ann Van Dyke, has the sole power to vote and direct the vote of 5,000
shares of Tops Common Stock held in a joint personal account.
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<PAGE>
Except for the conversion of the Debentures, the receipt of the
Initial Adjustment Stock and the request for the Additional Adjustment Payment,
to the best knowledge and belief of the undersigned, no transactions involving
Tops Common Stock (as defined below) have been effected during the past 60 days
by the Reporting Persons or by their directors, executive officers or
controlling persons.
The 6,300,000 shares of Tops Common Stock held by Bay Harbour reported
in this Statement are beneficially owned by Van Dyke, Teitelbaum, Tower and Bay
Harbour for the benefit of certain investment partnerships and managed accounts
over which Van Dyke, Teitelbaum, Tower and Bay Harbour control the power to (i)
convert the Debentures into shares of Tops Common Stock, (ii) direct the voting
of such shares of Tops Common Stock and (iii) dispose of such shares of Tops
Common Stock. The limited partners of the investment partnerships and the
investors in the managed accounts for which Bay Harbour acts as an investment
adviser have the right to participate in the receipt of dividends from, or
proceeds from the sale of, securities held by their funds or accounts, as the
case may be. Other than Lipstick, Ltd., Bay Harbour 90-1, L.P., Trophy Hunter
Investments, L.P., Bay Harbour Partners, Ltd., John M. Templeton, Gentleness,
Limited and Templeton Religion Trust, no such fund, single limited partner of
any of such funds nor any investor in a managed account has the right to receive
or the power to direct the receipt of dividends from, or proceeds from the sale
of, shares of Tops Common Stock reported in this Schedule 13D representing more
than five percent of the outstanding Tops Common Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Item 6 of the Schedule 13D is hereby amended in its entirety as follows:
On July 15, 1998, Bay Harbour agreed to convert the Debentures into
Common Stock pursuant to a Conversion Letter Agreement between Bay Harbour and
Tops dated July 15, 1998 (the "Conversion Letter Agreement"). Tops also granted
Bay Harbour a right of first refusal on issuances by Tops of certain equity or
debt securities by Tops. Pursuant to the Conversion Letter Agreement, Tops also
agreed to use its best efforts to cause a registration statement on Form S-3 to
be filed with the SEC to register the shares issuable upon conversion thereof.
The Debentures were converted into 3,480,000 shares of Tops Common Stock as of
September 25, 1998. Pursuant to the Conversion Letter, for as long as Bay
Harbour continues to hold at least 15% of the Tops Common Stock, Bay Harbour
shall have the right to designate two nominees to Tops' Board of Directors.
Pursuant to the Tops Purchase Agreement so long as Bay Harbour
continues to own, beneficially or otherwise, at least 15% of Tops Common Stock,
Bay Harbour shall have the right to designate one director to the Board of
Directors of Tops (in addition to the two directors pursuant to the Conversion
Letter Agreement). In addition, the Tops Purchase Agreement provides for an
adjustment mechanism if the price of Tops Common Stock declines. Based upon
such adjustment mechanism, Tops issued to Bay Harbour the Initial Adjustment
Payment due to the decline in the market price of the Tops Common Stock below
$3.60 per share for ten consecutive trading sessions. Upon the occurrence of
this event, Tops had the choice of paying Bay Harbour in cash or Tops Common
Stock (the "Initial Adjustment Amount") calculated as the difference per share
of the current price of the Tops Common Stock and $3.60 multiplied by the number
of the New Shares that Bay Harbour holds. Each time thereafter, if the average
price per share of the Tops Common Stock declines below the share price during
the 10-day period used to calculate the previous Adjustment Amount, Tops is
required to pay Bay Harbour in either cash or Tops Common Stock the difference
between the average price per share during such subsequent period and the
applicable average share price for the prior period used to
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<PAGE>
calculate the prior Adjustment Amount (each, an "Additional Adjustment Period"
and, if paid in newly-issued shares of Tops Common Stock, "Additional Adjustment
Stock"). The Tops Purchase Agreement also specifies that Tops will file a
registration statement on Form S-3 with the SEC within 60 days and will use its
best efforts to cause the registration statement to become effective.
Pursuant to an Option Agreement (the "Turchin Option Agreement"),
dated July 17, 1998, between the Turchin Family Limited Partnership ("Turchin")
and Bay Harbour, Bay Harbour has the right to acquire 200,000 shares of Tops
Common Stock at a price of $3.50 a share for a 90-day period beginning on July
17, 1998 (the "Initial Period") and at $4.00 per share from the Initial Period
to 270 days after the Initial Period.
Pursuant to an Option Agreement (the "Westinghouse Option Agreement"),
dated August 11, 1998, between Mellon Bank, N.A., as Trustee under the
Westinghouse Electric Corporation Master Trust Agreement for the Westinghouse
Pension Plan ("Westinghouse") and Bay Harbour, Bay Harbour has the right to
acquire 300,000 shares of Tops Common Stock at a price of $3.50 per share for a
90-day period beginning from August 11, 1998 (the "First Period") and at $4.00
per share from the Initial Period to 270 days after the First Period.
Bay Harbour has had discussions with Tops with respect to possible
additional investments by Bay Harbour in convertible debt securities or equity
securities of Tops, however, an agreement with respect to such investments has
not been reached.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 of the Schedule 13D is hereby amended in its entirety as follows:
EXHIBIT I Joint Filing Agreement, by and among Bay Harbour, Tower, Van
---------
Dyke and Teitelbaum.(1)
EXHIBIT II Form of Debenture.(1)
----------
EXHIBIT III Debenture Exchange Agreement dated August 20, 1997.(1)
-----------
EXHIBIT IV Conversion Agreement, dated July 16, 1998, between Tops and Bay
----------
Harbour.(2)
EXHIBIT V Share Purchase Agreement, dated July 16, 1998, between Tops and
---------
Bay Harbour.(2)
EXHIBIT VI Option Agreement, dated July 17, 1998, between Turchin and Bay
----------
Harbour.(2)
EXHIBIT VII Share Purchase Agreement, dated July 17, 1998, between Turchin
-----------
and Bay Harbour.(2)
EXHIBIT VIII Share Purchase Agreement, dated August 11, 1998, between
------------
Westinghouse and Bay Harbour.(2)
EXHIBIT IX Option Agreement, dated August 11, 1998, between Westinghouse
----------
and Bay Harbour.(2)
- ---------
(1) Previously filed with this Schedule 13D on July 6, 1998.
(2) Previously filed with this Schedule 13D on August 12, 1998.
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<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated as of: October 26, 1998 TOWER INVESTMENT GROUP, INC.
By: /s/ Steven A. Van Dyke
------------------------------
Name: Steven A. Van Dyke
Title: President
BAY HARBOUR MANAGEMENT, L.C.
By: /s/ Steven A. Van Dyke
------------------------------
Name: Steven A. Van Dyke
Title: President
/s/ Steven A. Van Dyke
----------------------------------
STEVEN A. VAN DYKE
/s/ Douglas P. Teitelbaum
----------------------------------
DOUGLAS P. TEITELBAUM
-10-
