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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
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Date of Report
September 16, 1996
NeoStar Retail Group, Inc.
(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 3. Bankruptcy or Receivership
On September 16, 1996, NeoStar Retail Group, Inc. (the "Company") and
its subsidiaries filed a voluntary petition under Chapter 11 of the United
States Bankruptcy Code, Case No. 396-36648-SAF-11 in the United States
Bankruptcy Court, Northern District of Texas, Dallas Division, Judge Steven A.
Felsenthal presiding. The Company, as Debtor-in-Possession, will continue to
operate and manage its affairs.
A copy of the press release issued by the Company on September 16,
1996, reporting the Chapter 11 filings and related matters, is filed herewith as
Exhibit 99.1 and incorporated herein by reference.
Item 5. Other Events
In connection with the Chapter 11 filings described in Item 3 above, (i)
the Company has received a commitment for $70,000,000 in debtor-in-possession
financing from Foothill Capital Corporation and a group of lenders and (ii)
Thomas G. Plaskett, a director of the Company, has been named Chairman of the
Board. James B. McCurry will continue to serve as President and Chief Executive
Officer of the Company.
A copy of the press release issued by the Company on September 16,
1996, reporting the Chapter 11 filings, the debtor-in-possession financing,
appointment of Mr. Plaskett as Chairman of the Board, and related matters, is
filed herewith as Exhibit 99.1 and incorporated herein by reference.
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 September
16, 1996.
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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 hereunto duly authorized.
NEOSTAR RETAIL GROUP, INC.
(Registrant)
By:/s/ JAMES B. McCURRY
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James B. McCurry
President and Chief Executive Officer
Date: September 16, 1996
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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99.1 - News Release of NeoStar Retail Group, Inc. dated September
16, 1996
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[NEOSTAR LOGO] 2250 William D. Tate Ave.
Grapevine, Texas 76051
FOR IMMEDIATE RELEASE
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For: NeoStar Retail Group, Inc.
Contact: Paul Streiber
817/424-2186
NEOSTAR RETAIL GROUP TO REORGANIZE UNDER CHAPTER 11
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Company Seeks Court Protection to Ensure Timely, Adequate
Supply of Merchandise During Holiday Selling Season
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$70 Million DIP Financing Announced
DALLAS, TX, September 16, 1996 -- NeoStar Retail Group, Inc. (NASDAQ:
NEOS), parent company of Babbage's and Software Etc., announced today that it
has filed a voluntary petition to reorganize under Chapter 11 of the U.S.
Bankruptcy Code in Federal Bankruptcy Court in Dallas. The Company said that
it, along with its subsidiaries, elected to seek court protection in order to
strengthen vendor confidence to ensure adequate inventory for the upcoming
holiday selling season.
The Company said that it will continue to operate in the normal course
of business during the proceeding and that it has received a commitment for $70
million in debtor-in-possession ("DIP") financing from Foothill Capital
Corporation and a group of lenders.
NeoStar also announced that outside director Thomas G. Plaskett has
been named Chairman of the Board of the Company and will lead its efforts to
develop and implement a plan of reorganization. James B. McCurry will continue
as NeoStar's President and Chief Executive Officer.
[SOFTWARE ETC LOGO] (more) [BABBAGE'S LOGO]
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Plaskett said that the Board of Directors, with the assistance of its
financial advisors, had reviewed available strategic options and had determined
that a restructuring of the Company in the context of a Chapter 11
reorganization afforded the Company the best opportunity to return it to
profitability and provide maximum value for NeoStar's stockholders and
creditors.
"Our near-term plans are to do everything possible to ensure that our
stores receive the necessary shipments of new inventory to fully stock our
stores in advance of the holiday selling season," McCurry said. "Reorganizing
under Chapter 11 allows NeoStar to build upon its dominant position in the
market for leading-edge video game products just as that market is about to
take off on a new cycle of rapid growth."
In connection with the filing, the Company expects to establish a
valuation allowance pursuant to SFAS No. 109 against all of the deferred income
taxes carried as an asset on the Company's balance sheet.
Plaskett is an executive with twenty-five years of general management
and senior policy level experience in both service and manufacturing
businesses. Since 1991, Plaskett has served as managing director of Fox Run
Capital Associates, a private financial consulting concern. Previously, he held
the position of Chairman, President and Chief Executive Officer of Pan Am
Corporation from 1988 to 1991; and as President and Chief Executive Officer of
Continental Airlines from 1986 to 1987. He also served as Senior Vice President
of Marketing and Senior Vice President of Finance at American Airlines, Inc.
Plaskett was elected to the Board of Directors of Greyhound Lines, Inc., and
served as Interim President and Chief Executive Officer of the company during
the later part of 1994. He was elected Chairman of the Board of Greyhound in
February 1995. Plaskett is also a member of the Board of Directors of Tandy
Corporation, Fort Worth, Texas, and Smart & Final, Inc., Los Angeles,
California, and is a Trustee of the GMI Engineering and Management Institute in
Flint, Michigan.
(more)
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NeoStar Retail Group is the nation's leading chain of consumer software
specialty stores. The Company employs over 5,000 people and operates 707 stores
in 49 states, the District of Columbia, Puerto Rico, and Canada primarily under
the names of 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.
