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
Date of Report (Date of earliest event reported) July 26, 2000
DONALDSON, LUFKIN & JENRETTE, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
1-6862 13-1898818
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(Commission File Number) (I.R.S. Employer
(Identification No.)
277 Park Avenue, New York, New York 10172
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (212) 892-3000
ITEM 5. OTHER EVENTS
Legal Proceedings Update.
On or about January 31, 2000, Ameriserve Food Distribution, Inc. ("Ameriserve"),
its parent company, Nebco Evans Holding Company ("NEHC"), and related
corporations, filed Chapter 11 petitions in the U. S. Bankruptcy Court for the
District of Delaware. Over a period of several years Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJSC") provided investment banking services
to Ameriserve and NEHC. A Donaldson, Lufkin & Jenrette, Inc. ("DLJ") merchant
banking affiliate was for a time an investor in Ameriserve, and an employee of
DLJSC and an employee of a DLJ merchant banking affiliate were members of the
board of directors of Ameriserve. In the Bankruptcy Court proceedings discovery
has been sought from DLJ and its affiliates in connection with their
relationships with these companies. In addition, the staff of the Securities and
Exchange Commission has issued an informal request for information, and the
U.S. Attorney's Office for the Eastern District of New York has issued a grand
jury subpoena requesting information. DLJ and its affiliates are cooperating
with these discovery requests. No claim has been brought against DLJ or its
affiliates to date.
Between September 1995 and October 1998, DLJSC was named as a defendant in six
separate actions filed by institutional investors who invested and lost
approximately $300 million in three hedge funds (the "Funds") managed by David
Askin ("Askin"). The Funds filed for bankruptcy in April 1994. All six
complaints have been consolidated for discovery purposes and are currently
pending in the U. S. District Court for the Southern District of New York. The
defendants are Askin, Askin Capital Management ("ACM", Askin's management
company), and two securities dealers (including DLJSC) that sold collateralized
mortgage obligations to the Funds. The only claim against DLJSC that has
survived a motion to dismiss is aiding and abetting common law fraud. The
complaints allege that DLJSC aided and abetted an alleged fraud of the investors
by Askin and ACM by selling securities that were inconsistent with the Funds'
investment objectives and by providing inaccurate monthly mark-to-market prices
for securities purchased by the Funds. The actions seek joint and several
recovery of rescissionary, compensatory, and punitive damages. DLJSC's motion
for summary judgment on the plaintiffs' claims is currently pending. DLJSC
intends to defend itself vigorously against all of the allegations contained in
the complaints.
In August 1997, DLJSC was named as a defendant in another action arising out of
the bankruptcy of the Funds. This action was brought by the "Litigation Advisory
Board," an entity created by the Funds' plan of liquidation to pursue all
unresolved claims held by the Funds. The action is currently pending in the U.
S. District Court for the Southern District of New York. The only claims against
DLJSC that have survived a motion to dismiss are for breach of contract.
Generally, the lawsuit alleges that the Funds were damaged when DLJSC issued
allegedly improper margin calls and liquidated the Funds' reverse repurchase
positions at less than fair market value. The complaint alleges that the Funds'
investors lost over $400 million in equity, but does not specify the amount of
damages that the Funds themselves claim to have suffered as a result of the
allegations made in this complaint. DLJSC intends to defend itself vigorously
against all of the allegations contained in the complaint.
Although there can be no assurance, DLJ's management does not believe that the
ultimate outcome of the matters described above will have a material adverse
effect on DLJ's consolidated financial condition. Based upon the information
currently available to it, DLJ's management cannot predict whether or not these
matters will have a material adverse effect on DLJ's results of operations in
any particular period.
SIGNATURE
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.
Donaldson, Lufkin & Jenrette, Inc.
/s/ Marjorie White
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Marjorie White
SECRETARY
July 26, 2000