-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, a1k8ej8XczeUGXPwQ+QSDo02CrboMPIQ/xeUD0NIwYkc1dRZrv6vWM/W1AIv/TvL kvoIfsR/vTRRWedZE25TFA== 0000899140-94-000011.txt : 19940307 0000899140-94-000011.hdr.sgml : 19940307 ACCESSION NUMBER: 0000899140-94-000011 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19940304 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CAROLCO PICTURES INC CENTRAL INDEX KEY: 0000801441 STANDARD INDUSTRIAL CLASSIFICATION: 7812 IRS NUMBER: 954046437 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 34 SEC FILE NUMBER: 005-38054 FILM NUMBER: 94514716 BUSINESS ADDRESS: STREET 1: 8800 SUNSET BLVD CITY: LOS ANGELES STATE: CA ZIP: 90069 BUSINESS PHONE: 3108598800 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CUMBERLAND ASSOCIATES CENTRAL INDEX KEY: 0000351262 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1114 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125750900 SC 13D 1 SCHEDULE 13D 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 CAROLCO PICTURES INC. (Name of Issuer) COMMON STOCK, PAR VALUE $.01 (Title of Class of Securities) 143763100 (CUSIP Number) Mr. Richard Reiss, Jr. Cumberland Associates 1114 Avenue of the Americas New York, New York 10036 (212) 536-9700 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 20, 1993 (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 of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Check the following box if a fee is being paid with the statement /X/. 2 SCHEDULE 13D CUSIP No. 143763100 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON CUMBERLAND ASSOCIATES 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a[ ] b[X] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC,00 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION New York 7. SOLE VOTING POWER None NUMBER OF 8. SHARED VOTING POWER SHARES BENEFICIALLY None OWNED BY EACH 9. SOLE DISPOSITIVE POWER REPORTING PERSON 7,376,600 WITH 10. SHARED DISPOSITIVE POWER None 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,376,600 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.4% 14. TYPE OF REPORTING PERSON* PN, IA 3 Item 1. Security and Issuer. This statement relates to the common stock, par value $.01 per share (the "Common Stock" or the "Shares"), of Carolco Pictures Inc. (the "Company"), which has its principal executive offices at 8800 Sunset Boulevard, Los Angeles, California 90069. Item 2. Identity and Background. This statement is being filed by Cumberland Associates. Cumberland Associates is a limited partnership organized under the laws of the State of New York, and is engaged in the business of managing, on a discretionary basis, nine securities accounts, the principal one of which is Cumberland Partners. The address of the principal business and office of Cumberland Associates is 1114 Avenue of the Americas, New York, New York 10036. K. Tucker Andersen, Richard Reiss, Jr., Oscar S. Schafer, Bruce G. Wilcox, Glenn Krevlin, Andrew Wallach and Eleanor Poppe are the general partners (the "General Partners") of Cumberland Associates. The business address of each of the General Partners is the same as that of Cumberland Associates. Each of the General Partners is a citizen of the United States. Neither Cumberland Associates nor any of the General Partners have, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), nor has any such person, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of 4 which any such person 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. Pursuant to a letter agreement, dated June 4, 1993, among the Company, Cumberland Associates and the other parties thereto (the "Letter Agreement," a copy of which is attached hereto as Exhibit 1), the holders of approximately $14,600,000 in face amount of the Company's outstanding 10% Convertible Subordinated Debentures due 2006 (the "10% Debentures") agreed to exchange such 10% Debentures for an aggregate of 22,500,000 shares of Common Stock at an exchange ratio of 1,500 shares of Common Stock for each $1,000 principal amount of 10% Debentures, subject to certain prospective adjustments (the "Exchange"). Cumberland Associates, which beneficially owned $7,000,000 principal amount of the 10% Debentures as of the date of the Letter Agreement (the "Owned Securities"), also agreed that the Exchange would be effected pursuant to the terms of the proposed financial restructuring of the Company described in the Company's Prospectus, Offer to Purchase, Consent Statement, Proxy Statement and Solicitation of Acceptances of Prepackaged Plan of Reorganization in connection with the Reorganization of the Company. 5 On October 20, 1993, the date of consummation of the Exchange, Cumberland Associates exchanged the Owned Securities for 10,500,000 shares of Common Stock, constituting approximately 7.6%* of the shares of Common Stock outstanding. By virtue of Rule 13d-3 under the Securities Exchange Act of 1934 (the "Act"), each of the General Partners may be deemed the beneficial owner of all of the Common Stock held by Cumberland Associates on behalf of Cumberland Partners and the other managed accounts. None of the General Partners, however, has independently invested any of his or her funds for the purpose of purchasing the Common Stock. Item 4. Purpose of Transaction. Cumberland Associates acquired the 10,500,000 shares of Common Stock pursuant to the Exchange described more fully in Item 3 above, on behalf of its discretionary accounts. As of the date hereof, Cumberland Associates is holding such Common Stock solely for investment and it has no present plans or proposals with respect to any material change in the Company's business or corporate structure or, generally, any other action referred to in instructions (a) through (j) of Item 4 of the form of Schedule 13D. Depending on market conditions and other factors, Cumberland Associates may make purchases of Common Stock or may ____________________ *Based on 137,987,728 shares of Common Stock outstanding as indicated in the Company's Form 10-Q for the fiscal quarter ended September 30, 1993 filed with the SEC on November 15, 1993. 6 sell or otherwise dispose of all or portions of such Common Stock, if such sales and purchases would be desirable investments for the portfolios of its accounts. Item 5. Interest in Securities of the Issuer. As of the date hereof, Cumberland Associates beneficially owned the aggregate number and percentage of outstanding Common Stock set forth below: Number of Shares Percentage* 7,376,600 (1) (2) 5.4% Set forth in Appendix A attached hereto and incorporated herein by reference are descriptions of the transactions in the Common Stock effected by Cumberland Associates within the 60 day period prior to October 20, 1993 through the date of this filing. In addition, each of the General Partners may, by virtue of his position as general partner of Cumberland Associates, be deemed, pursuant to Rule 13d-3 under the Act, to own beneficially the Common Stock of which Cumberland Associates would possess beneficial ownership. Other than in their respective capacities as ____________________ *Based on 137,987,728 shares of Common Stock outstanding as indicated in the Company's Form 10-Q for the fiscal quarter ended September 30, 1993 filed with the SEC on November 15, 1993. (1) As to all of which, there is sole power to dispose or to direct the disposition of such Shares. (2) Cumberland Associates has no voting power with respect to any of the Shares. 7 general partners of Cumberland Associates, however, none of the General Partners is the beneficial owner of any Common Stock. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Pursuant to its management agreements with all of the accounts except Cumberland Partners and LongView Partners, Cumberland Associates receives an annual management fee from each account holder, which includes a participation in the net appreciation during the preceding fiscal or calendar year in the value of the securities in each account. In the case of the accounts of Cumberland Partners and LongView Partners, the management fee paid each year to Cumberland Associates by each of Cumberland Partners and LongView Partners does not include such profit participation. Except as otherwise set forth in this statement, to the best knowledge of the undersigned, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among or between the undersigned, the General Partners and any other person with respect to any securities of the Company, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. The Letter Agreement is filed herewith as Exhibit 1. 8 After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: March 4, 1994 CUMBERLAND ASSOCIATES By: RICHARD REISS, JR. Richard Reiss, Jr. General Partner 9 APPENDIX A* 1. TRANSACTIONS EFFECTED BY CUMBERLAND ASSOCIATES DATE OF NO. OF UNITS NO. OF UNITS PRICE PER TRANSACTION PURCHASED SOLD UNIT 07/14/92** 9,100 $1.25 07/15/92** 2,500 1.25 01/13/93** 25,500 1.03 01/14/93** 18,000 1.00 02/08/93** 1,000 0.88 04/22/93** 141,800 1.38 04/23/93** 15,000 1.38 10/14/93** 10,000 1.13 10/22/93 90,100 1.54 10/25/93 222,700 1.43 10/26/93 88,200 1.25 10/27/93 71,200 1.13 10/28/93 188,000 0.98 10/29/93 5,000 1.00 10/29/93 35,200 1.00 11/01/93 67,800 0.95 11/02/93 59,900 0.79 11/03/93 20,500 0.75 11/04/93 38,700 0.75 11/05/93 3,400 0.75 11/15/93 56,300 0.75 11/15/93 30,000 0.75 12/30/93 300,000 0.53 12/31/93 500,000 0.52 01/07/94 1,003,100 0.75 01/10/94 45,900 0.81 01/14/94 50,000 0.75 01/17/94 24,500 0.75 * Each of the transactions set forth in this Appendix was a regular way transaction. ** Short sales covered on 10/31/93. EX-99 2 CAROLCO LETTER 1 EXHIBIT 1 June 4, 1993 Carolco Pictures Inc. 8800 Sunset Boulevard Los Angeles, California 90069 Re: 10% Convertible Subordinated Debentures due 2006 (the "10% Debentures") and Series D Convertible Exchangeable Preferred Stock (the "Series D Preferred Stock") (collectively, the "Securities") of Carolco Pictures Inc. Dear Sirs: On May 7, 1993, Carolco Pictures Inc., a Delaware corporation ("Carolco"), filed Amendment No. 1 to its Registration Statement on Form S-1 (Registration Number 33-56380) (as amended, the "Registration Statement") with the Securities and Exchange Commission ("SEC"). The Registration Statement includes a preliminary Prospectus, Offer to Purchase, Consent Statement, Proxy Statement and Solicitation of Acceptances of Prepackaged Plan of Reorganization (the "Prospectus") relating to the proposed financial restructuring (the "Restructuring") of Carolco, which includes the recapitalization of Carolco through either (i) the proposed exchange of all of Carolco's outstanding debt securities and preferred stock as well as the cash sales of a new series of preferred stock and new debt securities, or (ii) a prepackaged plan of reorganization (the "Prepackaged Plan") pursuant to Chapter 11 of the United States Bankruptcy Code encompassing generally the same elements as the foregoing. The terms of the Restructuring are as set forth in the Prospectus, except that (i) the holders of Carolco 13% Senior Subordinated Notes due 1996 (the "13% Senior Subordinated Notes") will be offered $1,000 in principal amount of 13%/12% Reducing Rate Senior Subordinated Notes (the "New Senior Subordinated Notes") for each $1,000 principal amount of outstanding 13% Notes, (ii) the holders of Carolco 14% Senior Notes due 1993 (the "14% Notes") will be offered $1,000 in principal amount of 11.5%/10% Reducing Rate Senior Notes (the "New Senior Notes") for each $1,000 principal amount of outstanding 14% Notes, and (iii) pursuant to the Prepackaged Plan, Carolco would exchange the same consideration set forth in clauses (i) and (ii) of this paragraph for all the outstanding 13% Notes and outstanding 14% Notes. The terms of the New Senior Notes and the New Senior 2 Subordinated Notes are set forth in Exhibit A and Exhibit B to this letter, respectively, and are incorporated herein. Carolco proposes, among other things, (i) to issue an aggregate of 22,500,000 shares of common stock, par value $0.01 per share (the "Common Stock"), of Carolco (to be increased by 4,500,000 additional shares (the "Additional Shares") if the average Trading Price (as defined below) of the Common Stock is below $.50 for the ten trading days after the mailing of the Prospectus) in exchange (the "Exchange") for Securities at an exchange ratio of (a) 1,500 shares of Common Stock for each $1,000 principal amount of 10% Debentures, subject to increase to 1,800 shares of Common Stock for each $1,000 principal amount of 10% Debentures if the Additional Shares are issued, and (b) 75 shares of Common Stock plus $2.50 cash for each share of Series D Preferred Stock, subject to increase to 90 shares of Common Stock plus $2.50 cash for each share of Series D Preferred Stock if the Additional Shares are issued, excluding in each case the Securities held by Carolco's existing strategic investors, and (ii) to solicit acceptances (the "Prepackaged Plan Solicitation") to the Prepackaged Plan. "Trading Price" shall mean, on any day, the last reported sale price of a security on the New York Stock Exchange or, if such security is not listed on the New York Stock Exchange, the last sale price of such security, as reported in a composite published report of transactions which includes transactions on the exchange or other principal markets on which such security is traded or, if there is no such composite report as to any day, the last reported sale price, regular way (or if there is no such reported sale on such day, the average of the closing reported bid and asked prices) on the principal United States securities trading market (whether a stock exchange, NASDAQ or otherwise) on which such security is traded. The undersigned, or a representative of the undersigned on its behalf, participated in the negotiation of the terms of the Exchange, and has been provided reasonable access to information relating to Carolco and the proposed Restructuring and adequate opportunity to ask questions and receive answers with respect thereto. The undersigned acknowledges receipt of a copy of the preliminary Prospectus which includes the preliminary Prepackaged Plan as Appendix I. The undersigned holder of Securities ("Holder") and Carolco hereby agree, subject to the terms and conditions below, as follows: 1. Carolco shall use its best efforts to obtain, at the earliest practical date, the effectiveness of the Registration Statement. Promptly upon the effectiveness of the Registration Statement, Carolco shall, in accordance with all applicable laws, commence the Exchange and the Prepackaged Plan Solicitation by furnishing the Prospectus included in the 3 Registration Statement in its final form when it is declared effective by the SEC to the holders of the Securities. 2. Holder represents and warrants to Carolco that, as of the date hereof, (i) Holder is the beneficial owner of the Securities described below (the "Owned Securities"), (ii) Holder is the registered or record holder of the Owned Securities or, if it is not the registered or record holder, then it has identified below the entity which is the registered or record holder (the "Registered Holder"), and (iii) Holder has full power and authority to vote and consent to matters concerning the Owned Securities and to exchange, assign and transfer the Owned Securities in accordance with the terms of the Exchange pursuant to the Restructuring and to instruct the Registered Holder, if any, to do so. 3. Holder agrees to (i) vote in favor of the Prepackaged Plan, and (ii) exchange the Owned Securities in the Exchange, pursuant to the terms of the Restructuring described in the Prospectus modified as set forth in this letter. Holder acknowledges that consummation of the Restructuring is conditioned upon the occurrence of certain events, including, without limitation, the events described in the Prospectus. 4. Holder consents to Carolco's disclosure in the Registration Statement, and any amendment thereto and in related press releases, of Holder's intention to support the Restructuring and agreement to participate in the Exchange. 5. Holder shall not until November 30, 1993, (i) grant any proxies to any person in connection with the Owned Securities to vote on the Restructuring or the Prepackaged Plan except as is consistent with the intention of Holder as described in paragraph 3 above, or (ii) sell, transfer or otherwise dispose of the Owned Securities. 6. The Exchange will be made pursuant to the terms and conditions set forth in the final Prospectus which will contain the revised terms of the Restructuring as set forth in this letter. 7. On or prior to the Expiration Date (as defined in the Prospectus and any supplements thereto), Holder shall deliver to American Stock Transfer & Trust Company (i) a properly completed ballot (form to be provided by Carolco) executed by Holder and, if applicable, by the Registered Holder voting to accept the Prepackaged Plan with respect to the Owned Securities, and (ii) certificate(s) representing the Owned Securities, accompanied by a letter in the form of Exhibit C attached hereto (final form to be provided by Carolco and is not attached hereto). 4 8. The rights of all parties to this agreement are expressly conditioned upon the effectiveness of the Registration Statement. HOLDER Name of Entity: Cumberland Associates By: /s/Richard Reiss, Jr. Name: Richard Reiss, Jr. Title: Managing Partner Owned Securities: (check and complete as appropriate) /X/ $7,000,000 principal amount of 10% Debentures / / 8,000 shares of Series D Preferred Stock Registered Holder of Owned Securities: (If applicable) Morgan Stanley & Co. Agreed and accepted as of this 22nd day of June, 1993 CAROLCO PICTURES INC. By: /s/Robert W. Goldsmith Name: Robert W. Goldsmith Title: Senior Vice President 5 EXHIBIT A TERMS OF 11.5%/10% REDUCING RATE SENIOR NOTES (THE "NEW SENIOR NOTES") Issuer: Carolco Pictures Inc. Exchange Ratio: The New Senior Notes would be issued to the holders of the Company's 14% Senior Notes due 1993 (the "14% Notes"). For each $1,000 principal amount of outstanding 14% Notes exchanged, a holder will receive $1,000 principal amount of New Senior Notes. Interest: 11.5% per annum, payable semi-annually. In addition, promptly after issuance of the New Senior Notes, holders who exchange their 14% Notes will receive accrued interest on the New Senior Notes from January 1, 1993 until the date of issuance of the New Senior Notes in cash. The interest rate will be reset to 10% commencing on the date Tele-Communications, Inc. makes an equity investment in Carolco of at least $10,000,000. Maturity: Due on the seventh anniversary of issuance. Mandatory Redemption: None. Optional Redemption: Redeemable at any time, in whole or in part, at the election of the Company, at the following percentages of principal, plus all accrued interest to the redemption date: Prior to the Anniversary of Issuance Percent Third 95 Thereafter 100 Ranking: Senior Indebtedness of the Company. 6 Security: None. the New Senior Notes will be general unsecured obligations of Carolco. Listing: The New Senior Notes will not be listed on any exchange. Method of Distribution: The New Senior Notes will be issued to the existing holders of the 14% Notes pursuant to an exchange offer complying with the Securities Act of 1933, as amended, or pursuant to the Prepackaged Plan. The exchange offer will be conditioned upon the holders of 85% aggregate principal amount of each of the 13% Senior Subordinated Notes due 1996 and 14% Notes tendering their notes for exchange pursuant to the respective exchange offer. 7 EXHIBIT B TERMS OF NEW 13%/12% REDUCING RATE SENIOR SUBORDINATED NOTES (THE "NEW SENIOR SUBORDINATED NOTES") Issuer: Carolco Pictures Inc. Exchange Ratio: The New Senior Subordinated Notes would be issued to the holders of the Company's 13% Senior Subordinated Notes due 1996 (the "13% Notes"). For each $1,000 principal amount of outstanding 13% Notes exchanged, a holder will receive $1,000 principal amount of New Senior Subordinated Notes. Interest: 13% per annum, payable semi-annually. In addition, promptly after issuance of the New Senior Subordinated Notes, holders who exchange their 13% Notes will receive accrued interest on the New Senior Subordinated Notes from January 1, 1993 until the date of issuance of the New Senior Subordinated Notes 50% in cash and 50% in New Senior Subordinated Notes. The interest rate will be reset to 12% commencing on the date Tele-Communications, Inc. makes an equity investment in Carolco of at least $10,000,000; provided, that such reset will not take effect prior to the second anniversary of the date of issuance of the New Senior Subordinated Notes. Maturity: Due on the sixth anniversary of issuance. Mandatory Redemption: None. Optional Redemption: Redeemable at any time, in whole or in part, at the election of the Company, at the following percentages of principal, plus all accrued interest to the redemption date: 8 Prior to the Anniversary of Issuance Percent Second 65 Third 70 Fourth 75 Fifth 80 Sixth 85 Ranking: Senior to the 13% Notes and junior to Senior Indebtedness of the Company. Security: None. The New Senior Subordinated Notes will be general unsecured obligations of Carolco. Listing: The New Senior Subordinated Notes will not be listed on any exchange. Method of Distribution: The New Senior Subordinated Notes will be issued to the existing holders of the 13% Notes pursuant to an exchange offer complying with the Securities Act of 1933, as amended, or pursuant to the Prepackaged Plan. The exchange offer will be conditioned upon the holders of 85% aggregate principal amount of each of the 13% Notes and 14% Senior Notes due 1993 tendering their notes for exchange pursuant to the respective exchange offer. -----END PRIVACY-ENHANCED MESSAGE-----