Current Report Filing (8-k)
December 28 2018 - 4:32PM
Edgar (US Regulatory)
UNITED
STATES
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):
December 28, 2018 (December 21, 2018)
GLASSBRIDGE
ENTERPRISES, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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001-14310
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41-1838504
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
Number)
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1099
Helmo Ave. N., Suite 250, Oakdale, Minnesota 55128
(Address of principal executive offices, including zip code)
(651)
704-4000
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
1.01 Entry Into a Material Definitive Agreement
On
December 21, 2018, GlassBridge Enterprises, Inc. (the “Company”) entered into a settlement agreement (the “Settlement
Agreement”) by and between (i) the Company together with TME GmbH (“TME”) and Imation Europe B.V. (“Imation
Europe”) (TME and Imation Europe, the “Affiliates”)(the Company, together with the Affiliates and Imation Deutschland
GmbH, “Imation”) and (ii) Zentralstelle für private Überspielungsrechte (ZPÜ) Gesellschaft des bürgerlichen
Rechts, with a business address at Rosenheimer Str. 11, 81667 München, represented by its member GEMA – Gesellschaft
für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (“ZPU”).
Background
:
From
January 1, 2003 through June 30, 2008, Imation Deutschland GmbH, which merged into TME in 2010 (“Imation DG”), imported
certain products to Germany via a commercial distribution channel (the “Commercial Channel”) and private customer
channel (the “Consumer Channel”). Imation DG paid a total of 11,819,331 EUR (approximately $13.5 million) in copyright
levies to ZPU during that time. This included 4,481,500 EUR (approximately $5.12 million) paid by Imation DG as levies on Commercial
Channel sales, and which were claimed back by TME from ZPU during arbitration proceedings before the Arbitration Board according
to the German Act on the Protection of Copyright and Neighbouring Rights (the “Arbitration Board”) on December 30,
2013. ZPU denied such payments. Since then, Imation DG began to withhold the Consumer Channel levy against our Commercial Channel
levy claim. The Consumer Channel levy withholding amount was reported as an accrued liability. As of today, the accrued levy liability
is approximately $5.1 million. The Arbitration Board proposed a compromise payment from ZPU to TME in the amount of 2.52 million
EUR (approximately $2.88 million) on February 27, 2017. Both TME and ZPU opposed the Arbitration Board’s compromise. As
of the date of the Settlement Agreement, court proceedings were pending before the Higher Regional Court of Munich where TME requested
reimbursement of 4,418,500 EUR (approximately $5.12 million) plus interest in the amount of five percent (5%) p.a. above the base
interest rate (the “Reimbursement Action”). There is an additional, separate court proceeding pending between ZPU
and TME before the Higher Regional Court of Munich where ZPU asserts a claim for reporting on sold hard disk drives (the “Reporting
Action”). Further, there are arbitration proceedings pending before the Arbitration Board between ZPU and former customers
of Imation DG and the Affiliates where ZPU asserts claims for copyright levies directly against certain former Imation customers
(the “Customer Arbitration Proceedings”). The Reimbursement Action, the Reporting Action and the Customer Arbitration
Proceedings shall together be known as the “ZPU Actions.”
Settlement
Terms
Imation
shall make a one-time payment of 150,000 EUR (approximately $171,368) (the “Settlement Payment”) to ZPU and the ZPU
Actions shall, in consideration for the Settlement Payment, be withdrawn or terminated as necessary by each of Imation and ZPU.
Imation shall irrevocably waive and abandon any claims, demands, and causes of action related to ZPU or any of the ZPU Actions.
ZPU shall irrevocably waive and abandon any claims, and causes of action related to Imation (including the Company), or any of
the ZPU Actions. For each of the Reimbursement Action, the Reporting Action and the Customer Arbitration Proceedings, each of
Imation and ZPU shall bear 50% of the board and/or court or related fees under each action or proceeding, and shall further bear
their own other expenses.
The
foregoing is a brief description of the material terms of the Settlement Agreement, does not purport to be a complete description
of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to the Settlement Agreement,
which is filed as Exhibit 10.1 hereto. The Settlement Agreement contains representations, warranties and covenants that were made
for the purposes of such agreement and, as of specific dates, were solely for the benefit of the parties to such agreement and
may be subject to limitations agreed on by the contracting parties. The Settlement Agreement is not intended to provide any other
factual information about the Company.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
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.
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GLASSBRIDGE
ENTERPRISES, INC.
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Dated:
December 28, 2018
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By:
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/s/
Danny Zheng
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Name:
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Danny
Zheng
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Title:
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Chief
Financial Officer,
Interim
Chief Executive Officer
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GlassBridge Enterprises (CE) (USOTC:GLAE)
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