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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
December 17, 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
Background
On September 16, 1996, NeoStar Retail Group, Inc., a Delaware
corporation (the "Company"), and its direct and indirect subsidiaries,
Babbage's, Inc., a Texas corporation, Software Etc. Stores, Inc., a Delaware
corporation, Augusta Enterprises, Inc., a Delaware corporation, and Chasada, a
Pennsylvania business trust, filed voluntary petitions 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 (the "Bankruptcy
Court"), U.S. Bankruptcy Judge Steven A. Felsenthal presiding.
On November 27, 1996, substantially all of the assets of the Company
were sold following an auction process conducted in a hearing in the Bankruptcy
Court (the "Sale"). The auction resulted in the sale of 447 of the Company's
retail store locations, all of its merchandise inventory and other related
assets. All of the Company's other retail store locations have been closed or
are being operated by the purchaser of the assets for its own account. The
Company ceased its retail operations effective upon the consummation of the
Sale.
The Company is proceeding with the orderly collection, liquidation and
distributions of its assets, subject to the supervision of the Bankruptcy
Court. The claims of the creditors of the Company are substantially in excess
of the remaining assets of the Company. Based on the information currently
available to the Company, the Company believes that no distribution will be
made to stockholders.
The Company was notified on December 10, 1996 that its stock was
delisted from the Nasdaq Stock Market effective prior to the opening of
business on December 11, 1996.
Discussion
The Company believes that the expenses incident to the filing of
reports with the Securities and Exchange Commission (the "Commission") and
otherwise complying with the Securities Exchange Act of 1934, as amended (the
"1934 Act") would directly and significantly reduce the assets available for
distribution to the Company's creditors. Under these circumstances, the Company
believes that expense of further compliance with the 1934 Act cannot be
justified. Based upon the Company's financial condition and the fact that it
has sold substantially all of its assets and ceased its retail operations, the
Company believes that neither the public interest nor the protection of
investors requires that the Company continue to file periodic and other reports
required by Section 13 of the 1934 Act.
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The Company currently intends to request confirmation from the staff of
the Commission (the "Staff") that it will not recommend to the Commission
enforcement action against the Company or its officers or directors if the
Company ceases to comply with the applicable reporting requirements of the 1934
Act, and the rules promulgated thereunder, except to file Current Reports on
Form 8-K to report subsequent material events affecting the liquidation and
dissolution of the Company. The Company understands that no-action relief
under these circumstances is, in large part, conditioned upon demonstrating to
the Staff that the trading market in the Company's common stock is relatively
inactive and, consequently, the public interest would not be adversely affected
by discontinuing the filing of periodic and other reports required by Section
13 of the 1934 Act. The Company will seek to obtain such no-action relief as
soon as sufficient time following the delisting of the Company's common stock
has expired to adequately evidence inactivity in such trading market.
Subject to the receipt from the Staff of its advice that it will not
recommend such enforcement action, the Company does not intend to continue to
file such reports, except to file Current Reports on Form 8-K to report
subsequent material events affecting the liquidation and dissolution of the
Company. At such time as the liquidation of the Company has been completed,
the Company intends to file a final report and final account of the
administration of the estate on Form 8-K under Item 3.
"THE SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION ACT
OF 1995. This filing contains forward-looking statements that involve risks
and uncertainties, including but not limited to bankruptcy court approval of
those actions requiring such approval.
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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/ Opal P. Ferraro
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Opal P. Ferraro
Vice President and
Chief Financial Officer
Date: December 17, 1996
