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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
Securities Exchange Act of 1934
Date of Report: (Date of Earliest Event Reported):
April 22, 1997 April 7, 1997
GROSSMAN'S INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State of Other Jurisdiction of Incorporation)
1-542 38-0524830
(Commission File No.) (I.R.S. Employer
Identification No.)
45 Dan Road
Canton, Massachusetts 02021
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 830-4000
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Item 3. Bankruptcy or Receivership.
(a) On April 7, 1997, the Registrant and two of its
subsidiaries, GRS Holding Company, Inc. and GRS Realty Company,
Inc., filed voluntary petitions in the United States Bankruptcy
Court for the District of Delaware (the "Court") for a debtor-in-
possession reorganization under Chapter 11 of the Bankruptcy
Code. As a result of the filing, the Court assumed jurisdiction
over the cases. On April 8, 1997 the Court entered an order
procedurally consolidating and providing for joint administration
of the cases (Case Number 97-695). The Court has also entered
first day orders granting authority to pay employees, honor
customer practices and take certain other actions which assist
business operations in Chapter 11.
On April 9 and 10, 1997, the Bankruptcy Court approved
secured lending facilities with GDI Company, Inc. ("GDI"), which
has agreed to provide the Company with up to $50 million in
debtor-in-possession ("the GDI Facility") financing, and Congress
Financial Corporation ("Congress"), the Registrant's existing
revolving credit lender. Congress will continue to provide
financing, essentially on pre-bankruptcy terms, through
April 29, 1997. On or before that date, GDI, under the GDI DIP
Facility, and pursuant to a Court order dated April 9, 1997, is
scheduled to purchase the Congress pre-bankruptcy loan (currently
approximately $26.1 million) and take an assignment of Congress'
collateral position. The Court also granted approval of $11
million of interim borrowings under the GDI DIP Facility to be
made on or prior to April 21, 1997. The $11 million in advances
will be secured by the same real estate collateral securing the
current GDI pre-bankruptcy loan of $4,000,000, which remains in
place in excess of the GDI DIP Facility. In addition, a $1.99
million GDI pre-bankruptcy loan secured by specific real estate
parcels remains in place in excess of the GDI DIP Facility. Upon
the purchase by GDI of Congress' position, advances under the
full $50 million DIP Facility (including the $11 million of
interim advances by GDI and the obligation to be purchased from
Congress) will be secured by the real estate and the collateral
currently held by Congress. The GDI DIP Facility provides for
formula based additional advances for normal business operations
and other cash needs during the bankruptcy proceedings. A final
hearing on the approval of the full GDI DIP Facility is currently
scheduled for April 30, 1997 in the Court.
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Three of the seven members of the Registrant's Board of
Directors are executive officers of JELD-WEN, inc., an affiliate
of GDI and a major supplier of the Registrant. The chairman of
JELD-WEN is the beneficial owner of approximately 12% of the
Registrant's common stock. Other JELD-WEN affiliates are pre-
bankruptcy lenders of the Registrant.
Congress has received a subordinated collateral position,
behind GDI, in the Registrant's owned real estate, until
repayment of its loans (other than the termination fee discussed
below). In addition, the Congress lien is collateralized by all
personalty, including inventory and receivables, existing both
prior and subsequent to the commencement of bankruptcy
proceedings. A $1 million termination fee claimed by Congress
under the pre-petition revolving credit agreement will be secured
by Congress' pre-petition collateral. The fee is disputed and
will be determined at a later date.
Effective on April 17, 1997, Thomas E. Arnold, Jr., a
current member of the Board of Directors and a member of its
Audit Committee, has been appointed by the Board as the person
principally responsible for Grossman's reorganization effort and
its related bankruptcy proceeding. Mr. Arnold's duties and
responsibilities also include supervision of financial reporting.
The initial term of Mr. Arnold's assignment is 90 days, subject
to renewal by the Board. Seymour Kroll, as Chief Executive
Officer, will focus primarily on improving store sales and
operations.
Statements contained herein that are not based on historical
fact are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Important
factors, beyond the Registrant's control, that could cause actual
results to differ materially from those in the forward-looking
statements include, but are not limited to, the need for
approvals by the Court, competition, stability of customer
demand, and the sufficiency of its capital resources. Undue
reliance should not be placed on these forward-looking
statements, which speak only as of the date hereof. The
Registrant undertakes no obligation to publicly release revisions
to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence
of unanticipated events.
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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 thereunto duly authorized.
GROSSMAN'S INC.
By: /s/ Richard E. Kent
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Richard E. Kent
Vice President, Secretary
and General Counsel
Dated: April 22, 1997
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