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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)
August 23, 1996
NUTRITION FOR LIFE INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Texas
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(State or other jurisdiction of incorporation)
0-26362 76-0416176
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(Commission File Number) (IRS Employer Identification Number)
9101 Jameel, Suite 180, Houston, TX 77040
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (713) 460-1976
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Former address, if changed since last report
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NUTRITION FOR LIFE INTERNATIONAL, INC.
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
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On August 23, 1996, Nutrition For Life International, Inc. (the
"Company") was informed that a suit had been filed against it in the United
States District Court for the Southern District of Texas, Houston Division (the
"Federal Action"). Also named as defendants were Kevin Trudeau, a key
distributor of the Company, the Trudeau Marketing Group, Inc., and certain
officers of the Company. The Federal Action was brought as a class action on
behalf of persons who became "instant" executive distributors of the Company and
persons who purchased the Company's common stock between October 19, 1995 and
April 24, 1996.
The principal allegations of the complaint in the Federal Action are
that certain aspects of the executive distributor compensation program
constituted an illegal pyramid scheme and that the Company failed to disclose
the existence of these aspects and Mr. Trudeau's past. The plaintiffs seek
unspecified damages, costs and fees of litigation and punitive damages.
On August 28, 1996, the Company learned that a suit was also filed
against it in the District Court of Harris County, Texas (the "State Action").
Also named as defendants were Kevin Trudeau, the Trudeau Marketing Group, Inc.,
Bernard Sherman, the largest beneficial owner of the Company's common stock,
certain officers of the Company, and Cohig & Associates, Inc. and
Neidiger/Tucker/Bruner, Inc., the investment banking firms which previously
served as underwriters of a public offering of the Company's securities. The
State Action was brought as a class action on behalf of persons who purchased
common stock and common stock purchase warrants of the Company during the period
from July 11, 1995 through July 16, 1996.
The principal allegations of the complaint in the State Action are
that certain aspects of the executive distributor compensation program
constituted an illegal pyramid scheme and that the Company failed to disclose
that its outstanding financial results were directly attributable to the
questioned aspects of its marketing practices. The plaintiffs seek unspecified
damages, costs and fees of litigation and punitive damages.
The Company strongly denies the allegations in both suits and intends
to vigorously defend against the charges made against it. The pendency of these
suits, as well as a potentially unfavorable decision to the defendants, could
have a material adverse effect on the Company's financial condition and its
operations.
As previously disclosed in the Company's Form 8-K Report filed July
31, 1996, the Company entered into an Assurance of Voluntary Compliance (the
"AVC") with Illinois and seven other states to resolve potential legal issues.
The AVC stated that there were no allegations of wrongdoing against the Company
and that the Company entered into the AVC in order to assure itself that its
policies and practices and its independent distributors' policies and practices
conform to state law and fairly protect the interest of consumers. Nonetheless,
there can be no assurance that additional legal or regulatory proceedings will
not arise in the future pertaining to the Company's business practices.
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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 thereunto duly authorized.
NUTRITION FOR LIFE INTERNATIONAL, INC.
Dated: September 10, 1996 By:___________________________________
David P. Bertrand, President
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