UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE l3D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
INSIGNIA FINANCIAL GROUP, INC.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
45767A105
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(CUSIP Number)
with a copy to:
Stephen Feinberg Robert G. Minion, Esq.
450 Park Avenue Lowenstein Sandler PC
28th Floor 65 Livingston Avenue
New York, New York 10022 Roseland, New Jersey 07068
(212) 421-2600 (973) 597-2424
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 18, 2002
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule l3G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Cusip No. 45767A105
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1) Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only):
Stephen Feinberg
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) Not
(b) Applicable
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3) SEC Use Only
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4) Source of Funds (See Instructions): WC
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5) Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e): Not Applicable
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6) Citizenship or Place of Organization: United States
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Number of 7) Sole Voting Power: *
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Shares Beneficially 8) Shared Voting Power: *
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Owned by
Each Reporting 9) Sole Dispositive Power: *
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Person With 10) Shared Dispositive Power: *
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11) Aggregate Amount Beneficially Owned by Each Reporting Person: 2,665,819*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions): Not Applicable
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13) Percent of Class Represented by Amount in Row (11): 10.4%*
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14) Type of Reporting Person (See Instructions): IN, IA
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* Madeleine L.L.C. ("Madeleine") is the record holder of (i) 68,417 shares of
the common stock, par value $0.01 per share (the "Common Stock"), (ii) 250,000
shares of the Series A Convertible Preferred Stock (the "Series A Preferred
Stock"), and (iii) 125,000 shares of the Series B Convertible Preferred Stock
("the Series B Preferred Stock", and, together with the Series A Preferred
Stock, the "New Preferred Stock") of Insignia Financial Group, Inc. (the
"Company"). The shares of the New Preferred Stock are convertible at any time
(unless and until the Securities are exchanged by the Company, as further
described in Item 6 hereof) at the option of the holder thereof into shares of
the Common Stock. Based upon the conversion rate of the Series A Preferred Stock
and the Series B Preferred Stock, respectively, as of June 18, 2002, Madeleine
has the right to convert the shares of New Preferred Stock into an aggregate of
2,597,402 shares. Thus, as of June 18, 2002, Madeleine is the holder of or has
the right to acquire an aggregate of 2,665,819 shares of the Common Stock.
Stephen Feinberg possesses sole power to vote and direct the disposition of all
securities of the Company held by Madeleine. Further, Madeleine has participated
some or all of the securities referred to herein to one or more entities
affiliated with Madeleine (including but not limited to Cerberus Partners, L.P.,
a Delaware limited partnership ("Cerberus"), Cerberus Institutional Partners,
L.P., a Delaware limited partnership ("Institutional"), and certain other
private investment funds (collectively, the "Funds", and, along with Cerberus
and Institutional, the "Feinberg Entities"). Stephen Feinberg possesses sole
power to vote and direct the disposition of all securities of the Company held
by the Feinberg Entities. Thus, as of June 18, 2002, for the purposes of Reg.
Section 240.13d-3, Stephen Feinberg is deemed to beneficially own 2,665,819
shares of the Common Stock, or 10.4% of the shares of Common Stock deemed issued
and outstanding as of that date.
Item 3. Source and Amount of Funds or Other Consideration.
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Through June 18, 2002, Madeleine has been issued 68,417 shares of the
Common Stock (the "Dividend Shares") in lieu of cash dividends on the shares of
the Company's Convertible Preferred Stock purchased by Madeleine on February 9,
2000 (the "Old Preferred Stock"). Pursuant to a Stock Subscription and Exchange
Agreement by and between the Company and Madeleine (the "Stock Subscription
Agreement"), on June 18, 2002, among other transactions, Madeleine (i) exchanged
the shares of Old Preferred Stock held by it for 250,000 shares of the Company's
Series A Convertible Preferred Stock (the "Series A Preferred Stock") and (ii)
purchased 125,000 shares of the Company's Series B Convertible Preferred Stock
(the "Series B Preferred Stock") for an aggregate purchase price of $12,500,000
(the Series A Preferred Stock and the Series B Preferred Stock are collectively
referred to herein as the "New Preferred Stock"). All funds used to purchase or
acquire any securities of the Company came directly from the assets of
Madeleine, Cerberus, Institutional and the Funds, respectively.
Item 5. Interest in Securities of the Issuer.
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Based upon information provided by the Company, there were 23,023,322
shares of the Common Stock (the "Shares") issued and outstanding as of May 29,
2002. Madeleine is the record holder of (i) 68,417 Shares, (ii) 250,000 shares
of the Series A Preferred Stock and (iii) 125,000 shares of the Series B
Preferred Stock. The shares of the New Preferred Stock are convertible at any
time (unless and until the shares of the New Preferred Stock are exchanged by
the Company, as further described in Item 6 hereof) at the option of the holder
thereof into Shares. As of June 18, 2002, Madeleine has the right to convert the
shares of the New Preferred Stock into an aggregate of 2,597,402 Shares. Thus,
including the Dividend Shares held by Madeleine, as of June 18, 2002, Madeleine
is the holder of or has the right to acquire an aggregate of 2,665,819 Shares.
Stephen Feinberg possesses sole power to vote and direct the disposition of all
securities of the Company held by Madeleine. Further, Madeleine has participated
some or all of the securities referred to herein to one or more of the Feinberg
Entities, and Stephen Feinberg possesses sole power to vote and direct the
disposition of all securities of the Company held by the Feinberg Entities.
Thus, as of June 18, 2002, for the purposes of Reg. Section 240.13d-3, Stephen
Feinberg is deemed to beneficially own 2,665,819 Shares, or 10.4% of the Shares
deemed issued and outstanding as of that date.
During the sixty day period prior to June 18, 2002, the only
transaction in Shares, or securities convertible into, exercisable for or
exchangeable for Shares, by Stephen Feinberg or any person or entity controlled
by him or any person or entity for which he possesses voting or investment
control over the securities thereof, was the June 18, 2002 transactions
described in Item 3 and Item 6 of this Schedule 13D Amendment No. 1.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
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In connection with the purchase and exchange described in Item 3
hereof, Madeleine and the Company entered into a Senior Subordinated Credit
Agreement, Stock Subscription and Exchange Agreement, Exchange Agreement, and
Series A & Series B Registration Rights Agreement pursuant to which, among other
things, (i) Madeleine agreed to provide to the Company up to $37.5 million of
subordinated debt financing, to be evidenced by Senior Subordinated Notes of the
Company (the "Notes"), as more particularly set forth and described in the
Senior Subordinated Credit Agreement by and among, among others, the Company and
Madeleine incorporated by reference as Exhibit 1 hereto; (ii) the Company and
Madeleine agreed to the terms of the exchange of the Old Preferred Stock for
shares of the Series A Preferred Stock and the purchase by Madeleine of the
shares of the Series B Preferred Stock, as more particularly set forth and
described in the Stock Subscription and Exchange Agreement incorporated by
reference as Exhibit 2 hereto; (iii) the Company and Madeleine agreed to the
terms pursuant to which the Company shall have the right to exchange all but not
less than all of the New Preferred Stock and the Notes for a single type of
security which at the election of the Company shall be either a Trust
Convertible Preferred Security of a trust the common equity of which shall be
owned by the Company ("TOPR") or a new series of convertible preferred stock of
the Company to be designated as Series C Convertible Preferred Stock (the
"Series C Preferred Stock"), as more particularly set forth and described in the
Exchange Agreement incorporated by reference as Exhibit 3 hereto and (iv) the
Company and Madeleine agreed to the terms pursuant to which the Company shall
register the shares of the Common Stock issuable upon conversion of the New
Preferred Stock for resale by the filing of a registration statement with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), and perform various other
obligations and agreements related to such registration, as more particularly
set forth and described in the Series A & Series B Registration Rights Agreement
incorporated by reference as Exhibit 4 hereto.
In addition, as part of the Exchange Agreement, the Company and
Madeleine agreed to the form of registration rights agreements pursuant to which
the Company shall register the shares of the Common Stock issuable upon
conversion of the Series C Preferred Stock or the TOPR, respectively, which may
in the future be issued by the Company, for resale by the filing of a
registration statement with the Commission pursuant to the Securities Act, and
perform various other obligations and agreements related to such registration,
as more particularly set forth and described in the registration rights
agreements which appear as exhibits to the Exchange Agreement, which such
Exchange Agreement is incorporated by reference as Exhibit 3 to this Schedule
13D Amendment No. 1.
Furthermore, as part of the transactions described in this Schedule
13D Amendment No. 1, the Company has agreed to the form of the Indenture,
Amended and Restated Declaration of Trust, Common Stock Guarantee Agreement and
Preferred Stock Guarantee Agreement, each of which will govern matters relating
to the issuance and treatment of the TOPR, if and when the TOPR is issued by the
Company, each of which appear as exhibits to the Exchange Agreement, which such
Exchange Agreement is incorporated by reference as Exhibit 3 to this Schedule
13D Amendment No. 1.
The descriptions of the transactions and agreements set forth in this
Schedule 13D Amendment No. 1 are qualified in their entirety by reference to the
complete agreements governing such matters, each of which are incorporated by
reference to this Schedule 13D Amendment No. 1 as exhibits pursuant to Item 7
hereof.
Except as otherwise described herein, no contracts, arrangements,
understandings or similar relationships exist with respect to the securities of
the Company between Stephen Feinberg and any person or entity.
Item 7. Material to be Filed as Exhibits.
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1. Senior Subordinated Credit Agreement, dated as of June 7, 2002,
by and among Insignia Financial Group, Inc., as Borrower, Madeleine L.L.C., as
Administrative Agent, and certain other financial institutions from time to time
party thereto, incorporated by reference to Exhibit 4.1 to the Current Report on
Form 8-K filed by the Company on June 27, 2002.
2. Stock Subscription and Exchange Agreement, dated as of June 7,
2002, by and between Insignia Financial Group, Inc. and Madeleine L.L.C.,
incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K
filed by the Company on June 27, 2002.
3. Exchange Agreement, dated as of June 18, 2002, by and between
Insignia Financial Group, Inc. and Madeleine L.L.C., incorporated by reference
to Exhibit 4.3 to the Current Report on Form 8-K filed by the Company on June
27, 2002.
4. Series A & Series B Registration Rights Agreement, dated as of
June 18, 2002, by and between Insignia Financial Group, Inc. and Madeleine
L.L.C., incorporated by reference to Exhibit 4.2 to the Current Report on Form
8-K filed by the Company on June 27, 2002.
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
June 27, 2002
/s/ Stephen Feinberg
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Stephen Feinberg, in his capacity
as the managing member of Cerberus
Associates, L.L.C., the general
partner of Cerberus Partners, L.P.,
and as the investment manager for
each of Madeleine L.L.C. and the
other Feinberg Entities referred to
herein
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).