SCHULTE ROTH & ZABEL LLP
919 Third Avenue
New York, NY 10022
(212) 756-2000
fax (212) 593-5955
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Writer's Direct Number Writer's E-mail Address
(212) 756-2519 robert.goldstein@srz.com
March 6, 2006
BY EDGAR
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549-3628
Attention: Mara L. Ransom, Esq.
Celeste M. Murphy, Esq.
Special Counsel
Office of Mergers and Acquisitions
Re: Whitehall Jewellers, Inc.
Amendment No. 1 to Schedule TO-T filed on February 22, 2006 by
Prentice Capital Management, LP, et al.
(FILE NO. 005-46037)
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Dear Ms. Ransom:
This firm is counsel to Prentice Capital Management, LP ("PRENTICE").
On behalf of Prentice, PWJ Funding LLC, PWJ Lending LLC, Michael Zimmerman,
Jonathan Duskin, WJ Holding Corp., WJ Acquisition Corp. ("WJ ACQUISITION") and
certain of their affiliates and representatives (such persons, together with the
other filing persons described below, collectively, the "FILING PERSONS"), we
submit this letter in response to your March 2, 2006 comment letter (the
"COMMENT LETTER") relating to the offer by WJ Acquisition to purchase all
outstanding shares of common stock, par value $0.001 per share, together with
the associated preferred stock purchase rights, (the "SHARES") of Whitehall
Jewellers, Inc. ("WHITEHALL"), upon the terms and subject to the conditions set
forth in the Offer to Purchase (as amended, the "Offer to Purchase") filed as
Exhibit (a)(1)(i) to the Tender Offer Statement on Schedule TO on February 8,
2006 (File No. 005-46037), as amended by Amendment No. 1 to Schedule TO-T filed
on February 22, 2006 (the "Schedule TO"). This letter includes certain
responsive information concerning Holtzman Opportunity Fund, L.P. ("HOLTZMAN")
and Seymour Holtzman that has been obtained from documents filed publicly by
Holtzman or from communications with Holtzman or its counsel.
Set forth below are the Filing Persons' responses to the comments
raised by the staff of the Securities and Exchange Commission (the "STAFF"). The
headings and numbered paragraphs of this letter correspond to the headings and
paragraph numbers contained in the Comment Letter. Capitalized terms used herein
shall have the meanings assigned to such terms in the Offer to Purchase and the
Schedule TO.
Concurrently with the filing of this letter, we are filing Amendment
No. 2 to the Schedule TO that reflects our responses to the Staff's comments.
SCHEDULE 13E-3/SCHEDULE TO-T
1. WE NOTE YOUR REVISIONS AND RESPONSE TO PRIOR COMMENT 12.
SPECIFICALLY, WE NOTE YOUR INDICATION THAT THE "PURCHASER GROUP NEITHER
CONSIDERED NOR DEEMED RELEVANT THE GOING CONCERN AND LIQUIDATION VALUES OF
COMMON STOCK BECAUSE THE PURCHASER GROUP BELIEVED THAT FACTORS RELATED TO
HISTORICAL MARKET PRICE, PAST PERFORMANCE AND BOOK VALUE WERE MORE RELEVANT TO A
DETERMINATION OF FAIRNESS." PLEASE REVISE TO DISCLOSE WHY GOING CONCERN AND
LIQUIDATION VALUES WERE NOT DEEMED RELEVANT ON THEIR OWN, AS OPPOSED TO AS
COMPARED TO HISTORICAL MARKET PRICES, PAST PERFORMANCE AND BOOK VALUE OF THE
COMMON STOCK.
RESPONSE: As discussed with the Staff on March 3, 2006, the Filing
Persons will amend Section 3 of "Special Factors" ("Position of the
Purchaser Group Regarding the Fairness of the Offer and the Merger")
of the Offer to Purchase to clarify that the Purchaser Group did not
consider the going concern and liquidation values of the Common Stock
and believed that the factors related to historical market price, past
performance, book value and the other factors discussed in Section 3,
were, in the aggregate, sufficient to conclude that the Offer and the
Merger are substantively fair to the unaffiliated stockholders of
Whitehall. As discussed with the Staff on March 3, 2006, while the
Filing Persons filed the Schedule TO as a going private transaction,
given the background of the transaction, whose original terms
contemplated a financing and current terms were largely a product of
submitting an offer in the context of a competitive bidding process,
coupled with the fact that the Purchaser Group does not have any
representation on the Whitehall Board, the application and intent of
Rule 13(e)(3) to the Offer and Merger is unclear and indeterminate. In
light of these dynamics, the Purchaser Group did not engage in the
types of going concern and liquidation analyses suggested by the Staff
or which might otherwise be expected in a typical going private
transaction.
EXHIBIT (A)(1)(II) -- LETTER OF TRANSMITTAL
2. WE NOTE YOUR RESPONSE TO PRIOR COMMENT 29, HOWEVER, IT APPEARS THAT
YOU HAVE ADDRESSED ONLY THE LATTER PORTION OF OUR COMMENTS AS IT RELATES TO
WAIVER OF CONDITIONS. WE OBJECT TO YOUR INDICATION THAT "THE CONDITIONS OF THE
OFFER MAY BE WAIVED, IN WHOLE OR IN PART, BY THE PURCHASER, IN ITS SOLE
DISCRETION, AT ANY TIME AND FROM TIME TO TIME IN THE CASE OF ANY SHARES
TENDERED..." AS IT IMPLIES THAT YOU MIGHT BE ABLE TO WAIVE A CONDITION AS TO
SOME SHAREHOLDERS, AS OPPOSED TO ALL SHAREHOLDERS. PLEASE REVISE ACCORDINGLY.
RESPONSE: As discussed with the Staff on March 3, 2006, the Filing
Persons will amend Section 11 of "The Tender Offer" ("Conditions to
the Offer") to clarify that the Purchaser
may not waive a condition as to some and not all stockholders. While
the Filing Persons will provide this additional clarifying disclosure
in response to the Staff's comments, they do not believe that this
clarification materially alters the mix of relevant information
presented in the Letter of Transmittal circulated to the unaffiliated
stockholders of Whitehall on or about February 8, 2006 and accordingly
do not believe that a re-mailing of the Letter of Transmittal is
necessary. The Filing Persons hereby acknowledge that the Purchaser
may not waive a condition as to some and not all stockholders.
The Filing Persons have amended the Schedule TO and have filed the
same with the Commission via EDGAR, and consistent with a conversation with the
Staff on March 3, 2006, we respectfully submit that no additional delivery of
the offering materials is required, nor is any extension of the Offer required
pursuant to the rules and regulations of the SEC. While the Filing Persons have
provided additional disclosure in response to the Staff's comments, they do not
believe that any of these changes materially alters the mix of relevant
information presented in the offering materials circulated to the unaffiliated
stockholders of Whitehall on or about February 8, 2006.
If you have any questions or comments or require further information
with respect to the foregoing, please do not hesitate to contact me at (212)
756-2519.
Very truly yours,
/s/ Robert Goldstein
Robert Goldstein