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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 8, 1995
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DART GROUP CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-1946 53-0242973
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
3300 75th Avenue, Landover, Maryland 20785
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 731-1200
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(Former name or former address, if changed since last report.)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
The discussion under Item 5 of this Current Report is incorporated
herein by reference.
ITEM 5. OTHER EVENTS
On September 14, 1994, Ronald S. Haft filed a lawsuit (the "Options
Lawsuit") against Dart Group Corporation ("Dart") in the Chancery Court of the
State of Delaware seeking a court order that Dart issue to him 197,048 shares
of Class B Common Stock of Dart pursuant to his purported exercise of options
to purchase such shares (the "Options"). On January 19, 1995, Ronald S. Haft
and plaintiffs in a shareholders derivative lawsuit filed in September 1993
(the "Kahn Derivative Lawsuit"), who had intervened in the Options Lawsuit,
entered into what they referred to as a Stipulation and Agreement of
Compromise, Settlement and Release (the "Settlement Agreement"), which was
filed in the Court on January 20, 1995. As part of the putative Settlement
Agreement, Ronald Haft's exercise of the Options would have been allowed.
On March 8, 1995, Dart filed with the Court a brief opposing the
authority of the plaintiffs in the Kahn Derivative Lawsuit to settle the
Options Lawsuit on behalf of Dart (the "Brief"). As an exhibit to the Brief,
Dart filed under seal its Response to Putative Settlement Agreement Between
Plaintiff and Intervenors (the "Memorandum"). On March 10, 1995, the
plaintiffs in the Kahn Derivative Lawsuit withdrew from the Settlement
Agreement. A copy of the Memorandum is attached hereto as Exhibit 99.1 and a
copy of the resolution of the Executive Committee of Dart's Board of Directors
(the "Executive Committee") approving the submission of the Memorandum to
the Court is attached hereto as Exhibit 99.2.
The Memorandum makes reference to a preliminary estimation (which is
subject to change) by Wasserstein Perella & Co., Inc. ("WP&Co.") of the range
of fair value of Dart's outstanding stock. Dart has engaged WP&Co. to estimate
the range of fair value of Dart in connection with the defense of the Options
Lawsuit and with respect to certain other issues of shareholder value
confronting Dart. As part of this engagement, WP&Co. is analyzing the value of
Dart as of the date of the issuance of the Options and as of the date the
report is to be delivered, based upon methodologies and certain assumptions
deemed appropriate by WP&Co. The primary methodology which WP&Co. is utilizing
for purposes of this valuation is a comparable companies analysis, i.e., an
analysis of the current trading values of the stock of certain other public
companies in the same businesses as Dart. WP&Co. is also utilizing, to a
lesser extent, two other methodologies: a discounted cash flow analysis (based
on projected free cash flow over approximately a five-year horizon) and a
comparable acquisitions analysis (based on transaction multiples for selected
recently completed acquisitions of retail companies). In conducting the
discounted cash flow analysis, WP&Co. has been provided with certain very
preliminary internal estimates of future performance of Dart prepared by its
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management (which were not prepared for this purpose, are subject to change and
have not been independently verified by WP&Co.).
The range of WP&Co.'s preliminary estimated value per share referred
to in the Memorandum exceeds the range within which the shares of Dart's Class
A stock have traded in recent periods. Neither Dart nor WP&Co. make any
representation or prediction as to whether the market price of the shares will
increase to the range of value in WP&Co.'s preliminary estimate or as to
whether any holder of shares would at any time be able to realize an amount in
that range from an investment in the shares.
The Memorandum also states that the Executive Committee "has under
favorable consideration" a liquidation of Dart's interest in Shoppers Food
Warehouse and an extraordinary distribution of cash to shareholders or a share
repurchase. No final decision has been made whether or not Dart will
enter into these transactions, and there can be no assurance as to the timing
or terms of these extraordinary transactions, if they do occur.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Attached hereto as Exhibit 99.1 is a copy of Dart's Response to
Putative Settlement Agreement Between Plaintiff and Intervenors, together
with its index of the following documents attached thereto:
TAB DOCUMENT
1. Dart 10K (1994).
2. Hearing Transcript (Jan. 30, 1995).
3. Plaintiffs' Memorandum of Law in Support of Their Motion for the
Appointment of a Temporary Custodian (Jan. 3, 1995), filed in Kahn
v. Haft, Del. Ch., C.A. No. 13154.
4. Directors' Response to R. Haft Settlement Proposal (Dec. 20, 1994).
5. Press release of Herbert Haft (Jan. 23, 1995).
6. Report of Wasserstein Perella & Co. re: maximization of
shareholder value (Mar. 6, 1995).
7. Standstill Agreement (Sept. 14, 1994).
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8. Dart Group Corporation 10Q (Oct. 31, 1994).
9. Crown Books Corporation 10Q (Oct. 31, 1994).
10. Letter from Geoffrey Stewart to Douglas Bregman, et al., (Sept. 2,
1994).
11. Hearing Transcript (Jan. 30, 1995).
12. Letter from David J. Hensler to Chancellor Allen (Jan. 26, 1995).
13. Settlement Submission (Jan. 19, 1995).
14. Letter from Mr. Battaglia to Court (Jan. 20, 1995).
15. Schafran Affidavit (Mar. 8, 1995)
16. Dart Group Corporation 10Q (Oct. 31, 1994).
17. Dart Press Release (Feb. 10, 1995).
18. Letter from Ayres to Bonanno (Dec. 29, 1994).
19. Letter from Ayres to Hensler (Dec. 21, 1994).
20. Kahn Affidavit (Jan. 19, 1995).
21. Hearing Transcript (Sept. 14, 1994).
22. Principles of Corporate Governance: Analysis and Recommendations,
2 A.L.I. pt. VII, Reporter's Note, at 9 (1994).
23. Warren Brown & Frank Swoboda, Managing the Culture of Change; At
G.M. New Team Shakes Up Culture From Top Down, Wash. Post (Jan.
31, 1993).
24. Alison Leigh Cowan, The High Energy Board Room, N.Y. Times (Oct.
28, 1992).
25. Doron P. Levin, Shake Up At G.M.; Stempel Quits Job As Top G.M.
Officer In Rift With Board, N.Y. Times (Oct. 27, 1992).
26. Principles of Corporate Governance, 2 A.L.I. pt. VII, Section 7.14
cmt. c, at 184 (1994).
27. Am. Complaint (Jan. 12, 1995), filed in Kahn v. Haft, Del. Ch.,
C.A. No. 13154.
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28. Agreement between Combined entities and Dart Drug Stores, et al.
(July 6, 1987).
29. Joint Stipulation between Dart Drug Stores, Trak, and Combined
(Oct. 7, 1991), filed in In re Dart Drug Stores, Inc., No.
89-4-2347-PM (Bankr. Md.).
30. Notes from Ronald Haft SLC Interview (June 16, 1994).
31. Notes of Feb. 15, 1994 SLC Meeting at Combined Properties (dated
Feb. 19, 1994).
32. Marshall Affidavit (Feb. 28, 1995).
33. Wolff Affidavit (Mar. 7, 1995).
34. Haft Family Stock Option Charts.
35. Complaint, (Nov. 23, 1993), filed in Haft v. Haft, Del. Ch. C.A.
No. 13268.
36. Marmon Affidavit (Mar. 6, 1995).
37. Ramsey Affidavit (Mar. 7, 1995).
38. Schafran deposition (Feb. 16, 1995).
39. Complaint, (Aug. 10, 1993), filed in Haft v. Haft, D.C. Super. Ct. C.A.
No. DR-2087-93.
40. Memorandum of Robert M. Haft and Linda G. Haft in Opposition to
Defendants' Motion for Summary Judgment, (May 6, 1994), filed in
Haft v. Haft, D.C. Super. Ct. Fam. Div., C.A. No. DR-2087-93.
41. Kara Swisher, Dart's Dilemma, Wash. Post (Jan. 30, 1995).
42. Betsy Pisik, Directors Act to Halt Hafts' Family Feud, Wash. Times
(Sept. 8, 1994).
These documents have been omitted from Exhibit 99.1 attached hereto.
The Registrant agrees to furnish supplementally to the Commission upon its
request, any of the omitted documents.
Attached hereto as Exhibit 99.2 is a copy of the Resolution of the
Executive Committee of the Board of Directors by Unanimous Written Consent,
dated March 7, 1995.
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EXHIBIT INDEX
Exhibit No. Description Page
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99.1 Dart Group Corporation's Response
to Putative Settlement Agreement
Between Plaintiff and Intervenors
99.2 Resolution of the Executive Committee
of the Board of Directors by Unanimous
Written Consent, dated March 7, 1995
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.
DART GROUP CORPORATION
By:/S/ Ronald T. Rice
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Ronald T. Rice
Controller
Date: March 13, 1995
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