SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date earliest event reported) December 28, 2000
CORAM HEALTHCARE CORPORATION
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(Exact name of registrant as specified in charter)
Delaware 1-11343 33-0615337
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1125 Seventeenth Street, Suite 2100, Denver, Colorado 80202
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (303) 292-4973
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(Former name or former address, if changed since last report)
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [X] No [ ]
ITEM 5. OTHER EVENTS
On August 8, 2000, Coram Healthcare Corporation and its wholly-owned first tier
subsidiary, Coram, Inc. (collectively the "Debtors"), filed voluntary petitions
under Chapter 11 of the United States Bankruptcy Code. As of such date, the
Debtors are operating as debtors-in-possession subject to the jurisdiction of
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court").
On December 28, 2000, the Debtors announced the Bankruptcy Court's approval of
the their request to convert a sufficient amount of debt and related accrued
interest to equity in the form of Coram, Inc. Series A Cumulative Preferred
Stock in order to maintain compliance with the physician ownership and referral
provisions of the Omnibus Budget Reconciliation Act of 1993 (commonly referred
to as "Stark II"). A copy of the related December 28, 2000 press release is
attached hereto as Exhibit 99.1.
On December 29, 2000, at the direction of Coram Healthcare Corporation's Board
of Directors, a Certificate of Designation, Preferences And Relative,
Participating, Optional And Other Special Rights Of Preferred Stock And
Qualifications, Limitations And Restrictions Thereof was filed by Coram, Inc.
with the Delaware Secretary of State for a new series of Coram, Inc. capital
stock (designated as Series A Cumulative Preferred Stock, $0.001 par value per
share). A copy of the related Certificate of Designation is attached hereto as
Exhibit 4.1. On such date, the Securities Exchange Agreement, dated May 6, 1998,
among the Debtors and Cerberus Partners, L.P., Goldman Sachs Credit Partners,
L.P. and Foothill Capital Corporation (collectively the "Holders") was amended
via "Amendment No. 4," and an Exchange Agreement was simultaneously executed
among the Debtors and the Holders. Pursuant to such arrangements, the Holders
agreed to exchange approximately $97.7 million aggregate principal amount of
Series A Senior Subordinated Unsecured Notes ("Series A Notes") and $11.6
million of unpaid accrued contractual interest on the Series A Notes and certain
Series B Senior Subordinated Convertible Notes ("Series B Notes") through
December 29, 2000 for 905 shares of Coram, Inc. Series A Cumulative Preferred
Stock. Following the exchange, the Holders retain approximately $61.2 million
aggregate principal amount of Series A Notes and $92.1 million aggregate
principal amount of Series B Notes. Moreover, the per annum interest rate on
both the Series A Notes and the Series B Notes has been modified to 9.0% and the
scheduled maturity date of such indebtedness was extended to June 30, 2001. For
other terms and conditions of the Series A Cumulative Preferred Stock, amended
Series A Notes and amended Series B Notes, including liquidation preferences,
voting rights and debt covenant requirements, see Exhibits 4.1, 10.1 and 10.2
attached hereto.
In connection with the aforementioned transactions, the Debtors anticipate
recognition of a troubled debt restructuring gain of approximately $108 million,
which should enable them to comply with the public company equity exemption
provided under Stark II.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit
Number Description of Document
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4.1 Certificate of Designation, Preferences And Relative,
Participating, Optional And Other Special Rights Of
Preferred Stock And Qualifications, Limitations And
Restrictions Thereof, dated December 29, 2000,
describing the terms, preferences, rights and
limitations of the Coram, Inc. Series A Cumulative
Preferred Stock.
10.1 Amendment No. 4, dated December 29, 2000, in respect
of the Securities Exchange Agreement, dated as of May
6, 1998, among Coram Healthcare Corporation, Coram,
Inc., Cerberus Partners, L.P., Goldman Sachs Credit
Partners, L.P. and Foothill Capital Corporation.
10.2 Exchange Agreement, dated December 29, 2000, among
Coram, Inc., Goldman Sachs Credit Partners, L.P.,
Cerberus Partners, L.P. and Foothill Capital
Corporation.
99.1 Press release, issued December 28, 2000, announcing
the approval by the United States Bankruptcy Court for
the District of Delaware of the conversion of debt to
equity in the form of Coram, Inc. Series A Cumulative
Preferred Stock.
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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 hereunto duly authorized.
CORAM HEALTHCARE CORPORATION
Date: April 4, 2001 By: /s/ SCOTT R. DANITZ
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Name: Scott R. Danitz
Title: Senior Vice President, Chief
Financial Officer and Treasurer