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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 and Exchange Act of 1934
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Date of Report
November 11, 1996
NeoStar Retail Group, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-25272 75-2559376
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2250 William D. Tate Avenue, Grapevine, Texas 76051
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 424-2000
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Item 5. Other Events
News Release
On November 11, 1996, NeoStar Retail Group, Inc., a Delaware
corporation (the "Company"), issued a news release reporting that discussions
with Leonard Riggio, a director and stockholder of the Company, concerning
possible financial support had ended when the Company's debtor-in-possession
lenders, its trade creditors and Mr. Riggio were unable to reach agreement on
the terms of the financing transaction and that, due to the absence of other
viable financing alternatives, the Company has decided to auction its assets.
The news release, attached hereto and filed herewith as Exhibit 99.1, is
incorporated herein by reference.
"THE SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION ACT
OF 1995. This report contains forward-looking statements that involve risks and
uncertainties, including but not limited to, projections of future operating
results, the financial condition of the Company, bankruptcy court approval of
those actions requiring such approval, and other risks detailed from time to
time in the Company's Securities and Exchange Commission filings.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following exhibit is filed as part of this report:
99.1 News Release of NeoStar Retail Group, Inc. dated November 11,
1996.
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.
NEOSTAR RETAIL GROUP, INC.
(Registrant)
By: /s/ OPAL P. FERRARO
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Opal P. Ferraro
Vice President and
Chief Financial Officer
Date: November 11, 1996
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EXHIBIT INDEX
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EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
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<S> <C> <C>
99.1 News Release of NeoStar Retail Group, Inc.
dated November 11, 1996.
</TABLE>
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EXHIBIT 99.1
[NEOSTAR LETTERHEAD]
FOR IMMEDIATE RELEASE
FOR: NEOSTAR RETAIL GROUP, INC.
Contact: Paul R. Streiber 817/424-2186
NEOSTAR RETAIL GROUP UNABLE TO REACH FINANCING ARRANGEMENT
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COMPANY TO PURSUE AUCTION OF ASSETS
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DALLAS, TX, NOVEMBER 11, 1996 -- NeoStar Retail Group, Inc. (NASDAQ:
NEOSQ), parent company of Babbage's and Software Etc., announced that its
previously reported discussions with Leonard Riggio, a director and stockholder
of NeoStar, concerning possible financial support had ended when its
debtor-in-possession ("DIP") lenders, its trade creditors and Riggio were
unable to reach agreement on the terms of the financing transaction. NeoStar
said that, due to the absence of other viable financing alternatives, it has
decided to auction its assets.
NeoStar's Chairman, Thomas G. Plaskett, said that NeoStar is in the
process of seeking Bankruptcy Court authorization to proceed with the auction
plan. He also said that NeoStar was in discussions with its DIP lenders
concerning financing during the auction process. Plaskett said that vendors
are being notified to stop shipping new inventory.
Last week, Plaskett reported that NeoStar had been unable to achieve
the level of trade credit necessary to acquire adequate inventory to stock its
stores and to meet the requirements of its DIP financing. Plaskett said the
shortfall in trade credit resulted in a default under the Company's DIP credit
facility. Due to the default, the DIP lenders are no longer obligated to make
additional advances under the DIP credit facility.
(more)
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NeoStar filed a voluntary petition to reorganize under Chapter 11 of
the U.S. Bankruptcy Code in Federal Bankruptcy Court in Dallas on September 16,
1996.
NeoStar Retail Group is the nation's leading chain of consumer
software specialty stores. It employs more than 5,000 people and operates more
than 650 stores in 49 states, the District of Columbia, Puerto Rico and Canada
primarily under the names Software Etc. and Babbage's. Virtually all of the
Company's stores are located in major regional shopping malls.
"THE SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
ACT OF 1995. This press release contains forward-looking statements that
involve risks and uncertainties, including but not limited to, projections of
future operating results, the financial condition of the Company, bankruptcy
court approval of those actions requiring such approval, and other risks
detailed from time to time in the Company's Securities and Exchange Commission
filings.
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