-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TEafNZ0lobatLEEicdog/kPZVW6wxXAOnU4BZvydyXP+az1LPnulMjXm0SXlyLby gC3jdXh3XYdaneA6wZgS1g== 0000950135-05-002964.txt : 20050519 0000950135-05-002964.hdr.sgml : 20050519 20050519164449 ACCESSION NUMBER: 0000950135-05-002964 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20050519 DATE AS OF CHANGE: 20050519 GROUP MEMBERS: GEORGE J. SCHULTZE GROUP MEMBERS: SCHULTZE ASSET MANAGEMENT, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IMPERIAL SUGAR CO /NEW/ CENTRAL INDEX KEY: 0000831327 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 740704500 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-39663 FILM NUMBER: 05845417 BUSINESS ADDRESS: STREET 1: ONE IMPERIAL SQ STE 200 STREET 2: P O BOX 9 CITY: SUGAR LAND STATE: TX ZIP: 77487 BUSINESS PHONE: 2814919181 FORMER COMPANY: FORMER CONFORMED NAME: IMPERIAL HOLLY CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: IMPERIAL SUGAR CO /TX/ DATE OF NAME CHANGE: 19880606 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Schultze Master Fund, Ltd. CENTRAL INDEX KEY: 0001315131 IRS NUMBER: 980425156 STATE OF INCORPORATION: E9 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O CALEDONIAN HOUSE, P.O. BOX 1043 STREET 2: ATTN: SHAREHOLDER SERVICES GROUP CITY: GRAND CAYMAN STATE: E9 ZIP: GT BUSINESS PHONE: 914-701-5260 MAIL ADDRESS: STREET 1: C/O SCHULTZE ASSET MANAGEMENT, LLC STREET 2: 3000 WESTCHESTER AVENUE CITY: PURCHASE STATE: NY ZIP: 10577 SC 13D/A 1 b55167a4sc13dza.txt SC 13D/A AMENDMENT #4 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 4) IMPERIAL SUGAR COMPANY (Name of Issuer) Common Stock (Title of Class of Securities) 453096208 (CUSIP Number) George J. Schultze Schultze Asset Management, LLC 3000 Westchester Avenue Purchase, NY 10577 with a copy to: Steven London Brown Rudnick Berlack Israels LLP One Financial Center Boston, MA 02111 (617) 856-8200 May 19 ,2005 (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 to 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 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 453096208 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Schultze Master Fund, Ltd. 98-0425156 - -------------------------------------------------------------------------------- 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 BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 1,368,792 BENEFICIALLY OWNED BY --------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING 0 PERSON WITH --------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 --------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,368,792 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,368,792 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- CUSIP No. 453096208 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Schultze Asset Management, LLC 22-3563247 - -------------------------------------------------------------------------------- 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 BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY OWNED BY --------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING 154,549 PERSON WITH --------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 --------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,523,341 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,341 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IA - -------------------------------------------------------------------------------- CUSIP No. 453096208 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON George J. Schultze - -------------------------------------------------------------------------------- 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 BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY OWNED BY --------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING 154,549 PERSON WITH --------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 --------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,523,341 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,523,341 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- SCHEDULE 13D Company: Imperial Sugar Company. CUSIP Number: 453096208 ITEM 1. SECURITY AND ISSUER. This Amendment No. 4 to Statement on Schedule 13D (the "Amendment No. 4") amends and supplements the Statement on Schedule 13D filed with the Securities and Exchange Commission on July 20, 2004 (the "Original Statement") and the Amendment No. 1 to Statement on Schedule 13D filed with the Securities and Exchange Commission on October 12, 2004 (the "Amendment No. 1"), the Amendment No. 2 to Statement on Schedule 13D filed with the Securities and Exchange Commission on December 22, 2004 (the "Amendment No. 2"), and the Amendment No. 3 to Statement on Schedule 13D filed with the Securities and Exchange Commission on February 9, 2005, as revised to correct a typographical error and re-filed on February 10, 2005 (the "Amendment No. 3") on behalf of Schultze Asset Management, LLC, George J. Schultze, and the Schultze Master Fund, Ltd., and relates to the common stock, no par value (the "Common Stock"), of Imperial Sugar Company, a Texas corporation (the "Company"). This Amendment No. 4 is filed by Schultze Master Fund, Ltd., Schultze Asset Management, LLC, and George J. Schultze (collectively, the "Reporting Persons"). The principal executive offices of the Company are located at One Imperial Square, PO Box 9, Sugar Land, TX 77487, United States. Except as set forth herein, the Original Statement is unmodified. ITEM 2. IDENTITY AND BACKGROUND. Schultze Asset Management, LLC is (i) a privately held asset management firm, (ii) a limited liability company organized under the laws of Delaware, and (iii) registered as an investment adviser under the Investment Advisers Act of 1940 (File No. 801-62112). Schultze Asset Management LLC's principal business and office address is 3000 Westchester Avenue, Purchase, NY 10577. Schultze Asset Management, LLC acts as investment manager for individual and institutional investors through limited partnerships, offshore funds, and managed accounts (the "Managed Accounts"). Schultze Master Fund, Ltd., a Cayman Islands company, is one of Schultze Asset Management, LLC's Managed Accounts. Schultze Master Fund, Ltd.'s principal business address is c/o Caledonian Fund Svcs. Ltd, P.O. Box 1043 GT, Grand Cayman, Cayman Islands. George J. Schultze, a citizen of the United States of America, is the Managing Member of Schultze Asset Management, LLC. George J. Schultze exercises sole voting and investment control over Schultze Asset Management, LLC. George J. Schultze's business address is 3000 Westchester Avenue, Purchase, NY 10577. This Amendment No. 4 reports Schultze Asset Management, LLC's and George J. Schultze's indirect beneficial ownership of shares of Common Stock of the Company held by the following Managed Accounts in the indicated amounts:
Shares of Common Stock of Managed Account the Company --------------- ------------------------- Schultze Master Fund, Ltd. 1,368,792 AIP Alpha Strategies I Fund 83,858 Arrow Distressed Securities Fund 69,621 Yolanda Schultze 1,070 TOTAL 1,523,341
In addition, this Amendment No. 4 reports the direct ownership of Schultze Master Fund, Ltd. of 1,368,792 shares of Common Stock of the Company. During the past five years, none of the Reporting Persons have been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result thereof was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. All funds used to purchase or acquire a security interest in the Company came directly from proceeds of investment advisory clients. ITEM 4. PURPOSE OF TRANSACTION. Schultze Asset Management, LLC is a long-term shareholder of the Company and has, directly and through its representatives and advisors, from time to time had discussions and corresponded with the Company's management, members of the Company's board of directors, and the Company's representatives and advisors, about the Company's business plans, strategies, and related matters. Following recent such discussions and correspondence with Mr. Robert A. Peiser, President and Chief Executive Officer of the Company, and others, on May 19, 2005, Schultze Asset Management, LLC sent a letter to Mr. Peiser and the Company's board of directors stating, among other things, that Schultze Asset Management, LLC proposes to acquire the Company in a merger for $17.00 per share in cash for all of the outstanding shares of the Company not already owned by Schultze Asset Management, LLC. Such proposed consideration represents a premium of approximately 35% over the average closing price of the Company's common stock over the twenty trading days preceding the letter. The letter states that Schultze Asset Management, LLC's offer is not contingent on obtaining financing, but that it is contingent on obtaining access to customary due diligence information from the Company. The letter also provides that the offer is subject to the negotiation and execution of a definitive acquisition agreement in writing containing customary representations, warranties, covenants and closing conditions. The complete text of the letter, together with related correspondence from Schultze Asset Management, LLC to the Company, is attached as Exhibit II. Included in Exhibit II is a letter to the Company from Schultze Asset Management, LLC dated February 8, 2005. That letter contains an attachment from Schultze Asset Management, LLC's financial advisor, CRT Capital Group LLC ("CRT"), regarding potential financing terms for an acquisition of the Company by Schultze Asset Management, LLC (the "CRT Letter"). The CRT Letter, and the term sheet contained therein, were based upon the state of the credit markets as of February 8, 2005. Because of significant changes to the credit markets since that time, CRT has informed Schultze Asset Management, LLC that it has withdrawn the CRT Letter. Schultze Asset Management, LLC offered to acquire the Company for $17.00 per share in its February 8, 2005 letter in part due to very favorable financing terms then afforded by the credit markets. The Company failed to engage Schultze Asset Management, LLC in meaningful negotiations at that time, and the credit markets have since worsened. Notwithstanding these developments, Schultze Asset Management, LLC has significant financial resources at its disposal and access to numerous other financing sources. As a result, Schultze Asset Management, LLC is confident that it can finance the proposed acquisition and its current offer does not contain any financing contingency. Schultze Asset Management, LLC's offer contained in its letter dated May 19, 2005 and attached as part of Exhibit II is an offer to the Company only, and is not, and should not be interpreted to be, an offer to or a solicitation of an offer from any other person or entity, including, without limitation, any other shareholder of the Company. Schultze Asset Management, LLC's offer contained in its letter dated May 19, 2005 and attached as part of Exhibit II is not, and should not be interpreted to be, a solicitation of any consent or proxy from any other person or entity, including, without limitation, any other shareholder of the Company. Schultze Asset Management, LLC's offer contained in its letter dated May 19, 2005 and attached as part of Exhibit II is not, and should not be interpreted to be, nor does it represent or reflect, any agreement, arrangement or understanding (whether or not in writing) with any person or entity, other than the Company, for the purpose of acquiring, holding, voting or disposing of any voting securities of the Company. In connection with the foregoing, and as may be appropriate from time to time depending on the course of discussions with the Company, its representatives and advisors, and/or other actions taken by the Company, Schultze Asset Management, LLC will consider the feasibility and advisability of various alternative courses of action with respect to its investment in the Company, including, without limitation: (a) the acquisition or disposition by the Reporting Persons of additional stock of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) changes in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) a material change in the present capitalization or dividend policy of the Company; (f) other material changes in the Company's business or corporate structure; (g) changes in the Company's articles of incorporation or bylaws or other actions that may impede the acquisition of control of the Company by any person; (h) causing any class of the Company's securities to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) causing a class of equity securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to those enumerated above. Except to the extent that the foregoing may be deemed a plan or proposal or be included as a step in the acquisition proposal described in the first paragraph of this Item 4 of this Amendment No. 4, the Reporting Persons do not currently have any plans or proposals that relate to or would result in any of the actions specified in clause (a) through (j) of this Item 4 of this Amendment No. 4. The Reporting Persons reserve the right, based on all relevant factors and subject to applicable law, at any time and from time to time, to review or reconsider their position, change their purpose, take other actions (including actions that could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) through (j) of this Item 4 of this Amendment No. 4) or formulate and implement plans or proposals with respect to any of the foregoing. The Reporting Persons intend to review their investment in the Company from time to time on the basis of various factors, including the Company's business, financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the Company's stock in particular, as well as other developments. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) Schultze Asset Management, LLC and George J. Schultze (through Schultze Asset Management, LLC) beneficially own 1,523,341 shares of Common Stock of the Company, which represents approximately 14.4% of the issued and outstanding shares of Common Stock of the Company (based upon the 10,548,267 shares of Common Stock stated to be issued and outstanding by the Company in its latest Quarterly Report on Form 10-Q, filed with the Securities Exchange Commission on May 5, 2005). Schultze Master Fund, Ltd. directly owns 1,368,792 shares of Common Stock of the Company, which represents approximately 13.0% of the issued and outstanding shares of Common Stock of the Company (based upon the 10,548,267 shares of Common Stock stated to be issued and outstanding by the Company in its latest Quarterly Report on Form 10-Q, filed with the Securities Exchange Commission on May 5, 2005). (b) In its capacity as investment manager, and pursuant to revocable investment management agreements between Schultze Asset Management, LLC and each Managed Account, Schultze Asset Management, LLC has the power to vote and dispose of the Common Stock owned by the Managed Accounts, except as otherwise noted herein. See Item 2, above. On behalf of the Managed Accounts other than Schultze Master Fund, Ltd., Schultze Asset Management, LLC has the shared power to vote 154,549 shares of Common Stock of the Company, and George J. Schultze controls Schultze Asset Management, LLC. Schultze Asset Management, LLC has the shared power to dispose of 1,523,341 shares of Common Stock of the Company, including the 1,368,792 shares of Common Stock of the Company held by Schultze Master Fund, Ltd. Although Schultze Asset Management, LLC is the investment adviser for Schultze Master Fund, Ltd., Schultze Master Fund, Ltd.'s board of directors retains the sole power to vote the shares of Common Stock directly owned by Schultze Master Fund, Ltd. (c) Except as described in the Amendment No. 1, Amendment No. 2, Amendment No. 3, and this Amendment No. 4, no transactions in the shares of Common Stock were effected by the Reporting Persons during the past sixty days other than the following: Schultze Master Fund, Ltd. purchased 30,000 shares of the Company's common stock on March 18, 2005 at an average price of $13.13 per share. Schultze Master Fund, Ltd. purchased 68,767 shares of the Company's common stock on March 21, 2005 at an average price of $13.21 per share. AIP Alpha Strategies I Fund purchased 1,233 shares of the Company's common stock on March 21, 2005 at an average price of $13.21 per share. Each of these purchases are included in all amounts indicated elsewhere in this Amendment No.4. (d) The Managed Accounts, including Schultze Master Fund, Ltd., may have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock indicated for each such Managed Account in Item 2, above. However, Schultze Asset Management, LLC, as the investment manager of each of the Managed Accounts, ultimately has the right to direct such activities. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Except as may be described in this Amendment No. 4, no contracts, arrangements, understandings or similar relationships exist with respect to the securities of the Company between the Reporting Persons and any person or entity. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit I. Joint Filing Agreement by and among Schultze Master Fund, Ltd., Schultze Asset Management, LLC, and George J. Schultze, dated as of December 20, 2004 (previously filed with the Securities and Exchange Commission on December 22, 2004 as Exhibit I to Amendment No. 2 and incorporated herein by reference). Exhibit II Letter from Schultze Asset Management, LLC to the Company, dated May 19, 2005, with related prior correspondence. SIGNATURE After reasonable inquiry and to the best of the knowledge and belief of each of the undersigned, each of the undersigned certifies that the information set forth in this Amendment No. 4 is true, complete and correct. Date: May 19, 2005 SCHULTZE MASTER FUND, LTD. By: /s/ George J. Schultze ---------------------------------------- Name: George J. Schultze Title: Director SCHULTZE ASSET MANAGEMENT, LLC By: /s/ George J. Schultze ---------------------------------------- Name: George J. Schultze Title: Managing Member /s/ George J. Schultze -------------------------------------------- George J. Schultze EX-99.II 2 b55167a4exv99wii.txt EX-99.II LETTER FROM SCHULTZE ASSET MANAGEMENT Schultze Asset Management, LLC 3000 Westchester Avenue Purchase, NY 10577 Tel: 914 701 5260 Fax: 914 701 5269 May 19, 2005 Robert A. Peiser, CEO, and The Board of Directors of Imperial Sugar Company Imperial Sugar Company 8016 Hwy 90A Sugar Land, TX 77487 Dear Robert: On behalf of Schultze Asset Management, LLC ("Schultze LLC"), of which I am Managing Member, I am writing to offer that Schultze LLC acquire Imperial Sugar Company (the "Company") in a transaction beneficial to all shareholders and stakeholders. As you know, Schultze LLC is a long-term, significant stockholder of the Company, currently holding over 1.5 million shares, or approximately 14% of the Company's outstanding shares. This is currently the maximum amount we can own without triggering the Company's poison pill, which we believe severely reduces management's accountability to shareholders and limits the market for the Company's stock, because no shareholder is able to acquire 15% or more of the Company's shares without prior management approval. At the Company's February 1, 2005 annual meeting, the Company's shareholders -- the owners of the Company -- voted to recommend that the poison pill be eliminated. However, in the nearly four months since this shareholder mandate, you and the Board of Directors have apparently disregarded the shareholders' wishes and have taken no action to terminate the poison pill. We believe such inaction has adversely affected the Company's stock price and is totally inconsistent with best practices for corporate governance. As we explained in our original letter dated February 8, 2005, at that time we believed that the Company's stock price would have been much lower had we not been actively acquiring shares. The performance of the stock price since our February 8, 2005 letter confirms our prior analysis. The Company's stock price has steadily declined during the period in which the poison pill has limited our acquisition of additional shares. In our letter dated February 24, 2005, we reaffirmed our enthusiasm to engage you and the Board of Directors in a dialogue about a potential negotiated transaction between Schultze LLC and the Company. We also expressed in that letter our desire to begin due diligence immediately in order to confirm certain understandings we had about the Company, as well as our disappointment with your puzzling lack of interest in a potential opportunity to maximize shareholder value and your apparent total disregard of the shareholders' recommendation to terminate the Company's poison pill. In our letter dated March 8, 2005, we reiterated our financial capability and flexibility to consummate a potential transaction with the Company, and again requested permission to begin due diligence so that, once armed with information not otherwise publicly available (under the terms of an appropriate confidentiality agreement), we 1 could confidently consider improving our offer in a manner that addressed specific management concerns. We struggle to see how your inaction and that of the Board of Directors in response to our inquiries either satisfies your fiduciary obligations or is in the best interests of shareholders. You and the Board of Directors (i) have not granted us entry to conduct even preliminary due diligence in order to gain information with which we could improve the terms of our offer, (ii) have refused to engage us in a dialogue at the expense of shareholders, and (iii) appear not to have taken any action with respect to the poison pill generally, nor did you grant us (as specifically requested) any limited individual latitude from the poison pill's suppression to allow us freely to communicate with the Company's other shareholders. We are frustrated that your rejection of our proposals has limited an opportunity to maximize shareholder value. We believe the Company's other shareholders are likely to feel the same way. Meanwhile, the Company's stock price has steadily declined. Given this and the Company's recent operating performance, I am articulating our intentions in writing for the fourth time in as many months so that you, your senior management and the Board of Directors may carefully consider our offer, which, as with our initial offer, remains at $17.00 per share, and is therefore now more attractive than ever. We consider our offer of $17.00 per share to be a highly attractive premium (approximately 35% based on the trailing twenty-day average closing price) to the now normalized share price. We strongly believe that the Board of Directors should find our offer, outlined below, to be fair and in the best interest of the Company's shareholders. 1. Offer. We are offering to acquire the Company in a merger for $17.00 per share in cash for all of the outstanding capital stock of the Company not currently owned by us. We appreciate that the Board of Directors would consider our ability to finance such an acquisition to be an important factor in its consideration. We are very pleased to reiterate that, as we have previously informed your advisors, our offer is not contingent on obtaining financing. We have adequate resources at our disposal to consummate the proposed acquisition. However, our offer is contingent on obtaining access to customary due diligence information from the Company. 2. Management. We believe the support of the Company's senior management will be critical to the ongoing success of the Company and very much want you and the other members of your senior management team to remain with the Company. Of course, we would expect that you as CEO would want to enter into an amended employment agreement with the Company. 3. Employee Issues. We expect to retain substantially all of the Company's current employees. We would hire an outplacement service to assist those not being retained. For those not being retained and not covered by employment or severance agreements, we would pay at least three months' severance. 4. Publicity. We believe that your refusal and the refusal of the Board of Directors to engage in a dialogue of negotiation regarding our offer has been detrimental to all shareholders and has stonewalled an attractive opportunity to substantially enhance the value to be realized by shareholders from their investment in the Company. We believe other shareholders may question whether or not your inaction constitutes a breach of the fiduciary duties the Board of Directors owes to them. As a result, we now feel compelled to publicly file this and our previous 2 letters to you and the Board of Directors simultaneously with the delivery of this letter. We hope this underscores the seriousness of our offer. Given the current performance prospects for the Company as previously announced with your quarterly results, we believe the Board of Directors must seriously consider our offer as an attractive opportunity to maximize shareholder value. To that end, we are asking to meet with a committee of independent members of the Board of Directors, in order to conduct negotiations in an environment that places the concerns of shareholders above any perception of management personal interest or entrenchment. 5. Timing. We require that the Board of Directors respond to this letter and our proposal by 5 p.m. on May 25, 2005. If you do not respond by that time, we reserve the right to take whatever steps we deem necessary to preserve and maximize shareholder value. 6. No Binding Agreement. No agreement shall exist between Schultze LLC and the Company unless and until we negotiate and execute a definitive acquisition agreement in writing containing customary representations, warranties, covenants and closing conditions. Our offer is also subject to completion of customary due diligence, as mentioned above. 7. Offer to the Company Only; Not a Solicitation. Our offer is an offer to the Company only, and is not, and should not be interpreted to be, an offer to or a solicitation of an offer from any other person or entity, including, without limitation, any other shareholder of the Company. Our offer is not, and should not be interpreted to be, a solicitation of any consent or proxy from any other person or entity, including, without limitation, any other shareholder of the Company. Our offer is not, and should not be interpreted to be, nor does it represent or reflect, any agreement, arrangement or understanding (whether or not in writing) with any person or entity, other than the Company, for the purpose of acquiring, holding, voting or disposing of any voting securities of the Company. [Signature Page Follows] 3 We hope you and the Board of Directors will give our proposal the serious consideration that our fellow shareholders would expect. We are certain that all shareholders would benefit from a process of good faith negotiations to delineate the details of the terms of our proposed transaction between Schultze LLC and the Company. Further, we are prepared to begin the due diligence process immediately, and believe the process will proceed very quickly. Very truly yours, Schultze Asset Management, LLC /s/ George Schultze ------------------------------------- By: George Schultze Title: Managing Member cc: James J. Gaffney, Chairman of the Board Curtis G. Anderson, Director Gaylord O. Coan, Director Yves-Andre Istel, Director Robert J. McLaughlin, Director James A. Schlindwein, Director John K. Sweeney, Director 4 CONFIDENTIAL Schultze Asset Management, LLC 3000 Westchester Avenue Purchase, NY 10577 914-701-5260 February 8, 2005 Robert A. Peiser, CEO Imperial Sugar Company 8016 Hwy 90A Sugar Land, TX 77487 Dear Robert: On behalf of Schultze Asset Management, LLC ("Schultze LLC"), of which I am the Managing Member, I am writing to enthusiastically propose that Schultze LLC acquire Imperial Sugar Company (the "Company") in a transaction beneficial to all shareholders and stakeholders. As you know, Schultze LLC is a long-term, significant stockholder of the Company. We believe that the current market price for the Company's stock would be much lower had we not been actively acquiring shares. With this in mind, I have articulated our intentions in writing so that you, your senior management and your board of directors may carefully consider them and properly decide the appropriate next steps. 1. Offer. We are prepared to offer an aggregate of at least $150 million in cash to purchase all of the outstanding capital stock of the Company not currently owned by us. Based on the information in your latest Quarterly Report on Form 10-Q, we calculate that our offer would represent approximately $17.00 per share in cash. We anticipate that our offer will be contingent on obtaining access to customary information from the Company. We are confident, as is our financial advisor CRT Capital LLC, that we will receive the needed financing for the transaction. Attached to this letter is a highly confident letter from CRT Capital LLC and a term sheet for our expected financing, which will provide sufficient funds for the consummation of the transaction. We strongly believe that your board of directors will find this offer to be fair and in the best interests of the Company's shareholders. 2. Increased Consideration. We believe that we could be prepared to increase the price mentioned in paragraph one if (a) we are allowed time and access in order to conduct due diligence and that due diligence validates certain understandings we have about the Company and its prospects and (b) we are able to negotiate a definitive acquisition agreement containing customary representations, warranties, covenants and closing conditions. We are prepared to begin the due diligence process immediately. CONFIDENTIAL February 8, 2005 Page 2 3. MANAGEMENT. We believe the support of the Company's senior management will be critical to the ongoing success of the Company and very much want you and the other members of your senior management team to remain with the Company. Of course, we would expect you as CEO to enter into an amended employment agreement with the Company. 4. EMPLOYEE ISSUES. We would also expect to retain substantially all of the Company's current employees. We would hire an outplacement service to assist those not being retained. For those not being retained and not covered by employment or severance agreements, we would pay at least three months' severance. 5. PUBLICITY. In order to allow the Company's board of directors an opportunity to consider our intentions carefully, we want to emphasize that Schultze LLC is not at this time making a formal offer. This letter and our proposed offer is confidential and if the existence of either is made public by the Company or its board of directors prematurely, our proposal will immediately and automatically be withdrawn and be of no further effect. 6. TIMING. We would ask that you and the Company's board of directors respond to this letter and our proposal by 5 p.m. on February 16, 2005. If you do not respond by that time, we reserve the right to make this letter and the terms of our proposed offer public and take whatever steps necessary to preserve our shareholder value. 7. NO BINDING AGREEMENT. This letter is an expression of our current intention only. No agreement shall exist between Schultze LLC and the Company unless and until we negotiate and execute a definitive acquisition agreement in writing containing customary representation, warranties, covenants and closing conditions. CONFIDENTIAL - ------------ February 8, 2005 Page 3 As a long-term investor, we are very excited about the prospect of acquiring Imperial Sugar Company. I understand you will need to proceed in a measured and proper manner in responding to our proposal. However, I hope that your response can be made in a timely manner. I look forward to talking further with you about our proposal. Very truly yours, Schultze Asset Management, LLC /s/ George Schultze ----------------------------------- By: George Schultze Title: Managing Member cc: James J. Gaffney, Chairman of the Board Curtis G. Anderson, Director Gaylord O. Coan, Director Yves-Andre Istel, Director Robert J. McLaughlin, Director James A. Schlindwein, Director John K. Sweeney, Director [CRT CAPITAL GROUP LLC LOGO] CRT CAPITAL GROUP LLC 262 Harbor Drive, Stamford CT 06902 Tel. 203.569.6400 Fax. 203.569.6499 www.crtllc.com February 8, 2005 Schultze Asset Management, LLC 3000 Westchester Avenue Purchase, NY 10577 Attention: Mr. George J. Schultze, Managing Member Dear George: We understand that Schultze Asset Management ("Schultze") has a desire to propose a recapitalization of Imperial Sugar Company (the "Company") in which Schultze would acquire the Company (the "Transaction"). You have advised us that the Transaction would require $150 million of debt financing in the form of fixed rate senior secured notes (the "Financing"). We are pleased to confirm that CRT Capital Group LLC is highly confident in our ability to arrange the Financing and would welcome the opportunity to pursue the offering. Our ability to successfully arrange the Financing is subject to certain factors, including, without limitation, (i) satisfactory market conditions existing at the time of the Financing; (ii) execution of documentation customary in transactions of this type; and (iii) satisfactory completion of business, tax, financial, legal, accounting and other customary due diligence matters with respect to the Company. CRT Capital Group LLC is an integrated investment banking firm focused on high-yield and convertible debt, capital structure arbitrage, equity securities, mergers and acquisitions, special situations and distressed securities. CRT Capital Group LLC is well-capitalized, and actively trades senior and subordinated bonds, bank debt, trade claims, convertible bonds, equities, real estate loans, tax-exempt securities and private placements. CRT Capital Group LLC's investment banking group has completed numerous advisory and financing transactions. CRT Capital Group LLC was founded in 1990. For the avoidance of doubt, this letter is not a guarantee of the availability of the Financing. CRT Capital Group LLC has not committed to arrange the Financing and shall not be obligated to purchase any securities of the Company by virtue of this letter or otherwise. Schultze Asset Management, LLC February 8, 2005 Page 2 We look forward to working with you to achieve a successful completion of the Financing and the Transaction. Sincerely, CRT Capital Group, LLC /s/ Michiel McCarty - ------------------------------------- By Michiel McCarty, Managing Director (CRT LOGO) CRT CAPITAL GROUP LLC 262 Harbor Drive, Stamford CT 06902 Tel. 203.569.6400 Fax. 203.569.6499 www.crtllc.com INDICATIVE TERM SHEET - SENIOR SECURED NOTES - -------------------------------------------------------------------------------- Issuer: Imperial Sugar Company (the "Company") - -------------------------------------------------------------------------------- Issue Amount: $150 million - -------------------------------------------------------------------------------- Issue: Senior Secured Notes - -------------------------------------------------------------------------------- Coupon: 7.50% area (subject to market conditions), payable semi-annually - -------------------------------------------------------------------------------- Maturity: 7 years - -------------------------------------------------------------------------------- Optional Redemption: Non-call 4, callable thereafter at par plus 1/2 coupon, declining to par - -------------------------------------------------------------------------------- Ranking: Secured by substantially all assets of the Company, including all subsidiaries, except those assets that may be pledged to secure a revolving credit facility - -------------------------------------------------------------------------------- Use of Proceeds: Recapitalization by Schultze Asset Management - -------------------------------------------------------------------------------- Change of Control: Put at 101.0% - -------------------------------------------------------------------------------- Covenants: Customary for senior secured notes (incurrence only) - -------------------------------------------------------------------------------- Sole Book-Running Manager: CRT Capital Group LLC - -------------------------------------------------------------------------------- Execution: 144(a) with registration rights - -------------------------------------------------------------------------------- CONFIDENTIAL Schultze Asset Management, LLC ("Schultze LLC") 3000 Westchester Avenue Purchase, NY 10577 914-701-5260 February 24, 2005 Robert A. Peiser, CEO, and The Board of Directors (the "Board") of Imperial Sugar Company (the "Company") 8016 Hwy 90A Sugar Land, TX 77487 Dear Robert: The Board's response to our letter dated February 8, 2005 (the "Letter") disappointed and puzzled us and does not advance the best interests of the Company's shareholders. We believe the potential deal outlined in the Letter (the "Transaction") represents a fantastic opportunity for the Company and its shareholders. We do not understand why the Board is not interested in further exploring the Transaction or -- at the very least -- engaging in a dialogue with Schultze LLC about ways to maximize shareholder return. We think you owe that to one of your largest shareholders. As noted in our Letter and in subsequent correspondence with you and your advisors, we are prepared to increase the price if due diligence indicates a higher value for the Company. We are ready and eager to begin immediately the due diligence process and are prepared to enter into a standstill agreement before we proceed. Unfortunately, we understand the Board believes we should wait until announcement of the Company's Q2 results -- possibly more than ten weeks from now -- to even begin discussions about a potential deal (never mind the diligence process). If the Board expects improved Q2 results, allowing us to start our due diligence as soon as possible will only bolster the likelihood that we would increase the price. Delaying our discussions, and the due diligence process, only delays the return to shareholders that our proposal will yield and that shareholders deserve. It is important that Schultze LLC and the Company's other shareholders be allowed to engage in frank, wide-ranging discourse about the Company and its prospects. We believe that open exchange among the Company's shareholders can only enhance the Company's value. It is clear that other shareholders feel the same way, given the recent shareholder mandate to abolish the Company's poison pill. Accordingly, we demand that the Board terminate the pill or, at the very least, provide us adequate assurance that Schultze LLC may engage in completely unfettered communications with the Company's other shareholders without risk of triggering the shareholder-denounced pill. CONFIDENTIAL February 24, 2005 Page 2 We hope you will reconsider your initial reaction to our proposal. I am happy to answer any questions you may have about our terms. Again, we are serious about our potential acquisition of the Company and are prepared to move on a swift timeline, including rapidly moving into merger negotiations. We look forward to hearing from you soon. Very truly yours, Schultze Asset Management, LLC GEORGE SCHULTZE Digitally signed by George Shultze DN: CN = George Schultze, C = US, O = Schultze Asset Mgmt., LLC, OU = SAM Location: Purchase, NY Date: 2005.02.24 19:36:26-05'00' ----------------------------------------------------- By: George Schultze Title: Managing Member cc: James J. Gaffney, Chairman of the Board Curtis G. Anderson, Director Gaylord O. Coan, Director Yves-Andre Istel, Director Robert J. McLauglin, Director James A. Schlindwein, Director John K. Sweeney, Director SCHULTZE ASSET MANAGEMENT, LLC 3000 Westchester Avenue Purchase, NY 10577 Tel: 914-701-5260 Fax: 914-701-5269 March 8, 2005 Robert A. Peiser, CEO, and The Board of Directors (the "Board") of Imperial Sugar Company (the "Company") 8016 Hwy 90A Sugar Land, TX 77487 Gentlemen: We appreciate your candor about the financial condition of the Company and your concerns about our ability to finance a potential transaction (the "Transaction") as outlined in our letter dated February 8, 2005. We understand you believe that the capital markets will not finance the Transaction as originally structured and priced in light of management's current expectations about the Company's financial performance. Our perception of the capital markets and the Company's prospects differs from yours. We are optimistic about the Company's future, remain excited about a potential acquisition of the Company, and continue to believe that we can successfully finance the Transaction. We understand that your primary concern about our proposal is the lack of an equity component. We have two responses to this concern that we hope you will consider. First, we have already invested significant equity in the Company. We are the Company's second largest shareholder and currently own almost 14% of the Company, representing an investment by Schultze LLC of over $21 million, based upon Monday's closing price of $14.90. Second, Schultze LLC has substantial additional capital at its disposal, with which we may be prepared to add an equity component to our original proposal. We have many financing options available to us that will allow us to structure the Transaction with a flexible mix of debt and equity. One of our options is to utilize bridge financing to assure you that the limitations of the capital markets will not jeopardize the completion of the Transaction. However, the costs of obtaining bridge financing would likely require us to reduce the purchase price. In any event, we cannot specify the amount and terms under which we would add equity to our proposal without more information about the Company's financial and business status and prospects than is currently publicly available. Again, we would like to be allowed access to conduct due diligence, under the terms of confidentiality and standstill agreements, as soon as possible. If due diligence reveals the information we expect to find, we are confident that we can finance the Transaction in an appropriate manner consistent with the requirements imposed by the capital markets at the time of the closing, and that we can deliver the value necessary for shareholders to consider the Transaction fair. We understand senior management may be wary of running what they perceive to be an over-leveraged Company. We continue to believe that the support and participation of current management will be critical to the Company's future success. We are confident that if we are given access to senior management, they will become more comfortable with our many financing options. We look forward to discussing our plans with senior management in more detail and addressing management's leverage concerns. We are concerned that, rather than encouraging a dialogue with us, the Board is discouraging a legitimate, attractive proposal by an investor with the sophistication and financial resources to consummate a deal and the willingness to be flexible about its pricing and structure. We see only the potential for substantial benefit to the Company's shareholders and no potential risk to the Company by engaging us in further discussions and giving us access to Company information that could lead to a successful Transaction. We look forward to hearing from you soon. WWW.SAMCO.NET -2- March 8, 2005 Very truly yours, Schultze Asset Management, LLC Digitally signed by George Schultze DN: CN=George Schultze, C=US, O=Schultze Asset GEORGE SCHULTZE Mgmt., LLC, OU=SAM Location: Purchase, NY Date: 2005.03.06 16:57:58 -06'00' _______________________________________ By: George Schultze Title: Managing Member cc: James J. Gaffney, Chairman of the Board Curtis G. Anderson, Director Gaylord O. Coan, Director Yves-Andre Istel, Director Robert J. McLaughlin, Director James A. Schlindwein, Director John K. Sweeney, Director -----END PRIVACY-ENHANCED MESSAGE-----