0000902664-14-004437.txt : 20141119 0000902664-14-004437.hdr.sgml : 20141119 20141119153400 ACCESSION NUMBER: 0000902664-14-004437 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20141119 DATE AS OF CHANGE: 20141119 GROUP MEMBERS: CLINTON GROUP, INC. GROUP MEMBERS: CLINTON MAGNOLIA MASTER FUND, LTD. GROUP MEMBERS: CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P. GROUP MEMBERS: CLINTON RELATIONAL OPPORTUNITY, LLC GROUP MEMBERS: GEORGE E. HALL SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WET SEAL INC CENTRAL INDEX KEY: 0000863456 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 330415940 STATE OF INCORPORATION: DE FISCAL YEAR END: 0128 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-41525 FILM NUMBER: 141234937 BUSINESS ADDRESS: STREET 1: 26972 BURBANK CITY: FOOTHILL RANCH STATE: CA ZIP: 92610 BUSINESS PHONE: 7145839029 MAIL ADDRESS: STREET 1: 26972 BURBANK CITY: FOOTHILL RANCH STATE: CA ZIP: 92610 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CLINTON GROUP INC CENTRAL INDEX KEY: 0001134119 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 601 LEXINGTON AVE. STREET 2: 51ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2128250400 MAIL ADDRESS: STREET 1: 601 LEXINGTON AVE. STREET 2: 51ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 p14-2243sc13da.htm THE WET SEAL, INC.

 

SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549  
   
SCHEDULE 13D/A
 
Under the Securities Exchange Act of 1934
(Amendment No. 21)*
 

The Wet Seal, Inc.

(Name of Issuer)
 

Class A Common Stock, par value $0.10 per share

(Title of Class of Securities)
 

961840105

(CUSIP Number)
 
 

Marc Weingarten and David E. Rosewater

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

(212) 756-2000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 

November 19, 2014

(Date of Event Which Requires Filing of This Statement)
 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ]

 

(Page 1 of 15 Pages)

______________________________

* 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. 961840105SCHEDULE 13D/APage 2 of 15 Pages

 

1

NAME OF REPORTING PERSON

Clinton Magnolia Master Fund, Ltd.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Cayman Islands

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

1,336,661 shares of Class A Common Stock

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

1,336,661 shares of Class A Common Stock

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

1,336,661 shares of Class A Common Stock

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

1.6%

14

TYPE OF REPORTING PERSON

CO

         
 
CUSIP No. 961840105SCHEDULE 13D/APage 3 of 15 Pages

 

1

NAME OF REPORTING PERSON

Clinton Relational Opportunity Master Fund, L.P.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

WC

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Cayman Islands

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

2.4%

14

TYPE OF REPORTING PERSON

PN

         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 4 of 15 Pages

 

1

NAME OF REPORTING PERSON

Clinton Relational Opportunity, LLC

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

2.4%

14

TYPE OF REPORTING PERSON

CO; IA

         
 
CUSIP No. 961840105SCHEDULE 13D/APage 5 of 15 Pages

 

1

NAME OF REPORTING PERSON

Clinton Group, Inc.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

6.1%

14

TYPE OF REPORTING PERSON

CO; IA

         

 

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 6 of 15 Pages

 

1

NAME OF REPORTING PERSON

George E. Hall

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ¨

(b) x

3 SEC USE ONLY
4

SOURCE OF FUNDS

AF

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6

CITIZENSHIP OR PLACE OF ORGANIZATION

United States

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:		 7

SOLE VOTING POWER

0

8

SHARED VOTING POWER

5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)

9

SOLE DISPOSITIVE POWER

0

10

SHARED DISPOSITIVE POWER

5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON

5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)

12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

6.1%

14

TYPE OF REPORTING PERSON

IN

         

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 7 of 15 Pages

This Amendment No. 21 (“Amendment No. 21”) amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on August 30, 2012 (the “Original Schedule 13D”), Amendment No. 1 to the Original Schedule 13D, filed with the SEC on September 5, 2012 (“Amendment No. 1”), Amendment No. 2 to the Original Schedule 13D, filed with the SEC on September 13, 2012 (“Amendment No. 2”), Amendment No. 3 to the Original Schedule 13D, filed with the SEC on September 17, 2012 (“Amendment No. 3”), Amendment No. 4 to the Original Schedule 13D, filed with the SEC on September 19, 2012 (“Amendment No. 4”), Amendment No. 5 to the Original Schedule 13D, filed with the SEC on September 21, 2012 (“Amendment No. 5”), Amendment No. 6 to the Original Schedule 13D, filed with the SEC on September 27, 2012 (“Amendment No. 6”), Amendment No. 7 to the Original Schedule 13D, filed with the SEC on October 1, 2012 (“Amendment No. 7”), Amendment No. 8 to the Original Schedule 13D, filed with the SEC on October 3, 2012 (“Amendment No. 8”), Amendment No. 9 to the Original Schedule 13D, filed with the SEC on October 5, 2012 (“Amendment No. 9”), Amendment No. 10 to the Original Schedule 13D, filed with the SEC on October 22, 2012 (“Amendment No. 10”), Amendment No. 11 to the Original Schedule 13D, filed with the SEC on February 13, 2013 (“Amendment No. 11”), Amendment No. 12 to the Original Schedule 13D, filed with the SEC on June 25, 2013 (“Amendment No. 12”), Amendment No. 13 to the Original Schedule 13D, filed with the SEC on August 22, 2013 (“Amendment No. 13”), Amendment No. 14 to the Original Schedule 13D, filed with the SEC on September 17, 2013 (“Amendment No. 14”), Amendment No. 15 to the Original Schedule 13D, filed with the SEC on December 17, 2013 (“Amendment No. 15”), Amendment No. 16 to the Original Schedule 13D, filed with the SEC on March 11, 2014 (“Amendment No. 16”), Amendment No. 17 to the Original Schedule 13D, filed with the SEC on March 21, 2014 (“Amendment No. 17”), Amendment No. 18 to the Original Schedule 13D, filed with the SEC on September 3, 2014 (“Amendment No. 18”), Amendment No. 19 to the Original Schedule 13D, filed with the SEC on October 8, 2014 (“Amendment No. 19”) and Amendment No. 20 to the Original Schedule 13D, filed with the SEC on October 29, 2014 (“Amendment No. 20” and, together with the Original Schedule 13D, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment No. 11, Amendment No. 12, Amendment No. 13, Amendment No. 14, Amendment No. 15, Amendment No. 16, Amendment No. 17, Amendment No. 18, Amendment 19 and this Amendment No. 21, the “Schedule 13D”) with respect to the Class A common stock, par value $0.10 per share (the “Class A Common Stock”), of The Wet Seal, Inc., a Delaware corporation (the “Issuer”). Capitalized terms used herein and not otherwise defined in this Amendment No. 21 have the meanings set forth in the Schedule 13D. This Amendment No. 21 amends Items 2, 3, 4, 5 and 7 as set forth below.

 

Item 2. IDENTITY AND BACKGROUND
   
Paragraphs (a)–(c) of Item 2 are hereby amended and restated in their entirety as follows:
   
 
CUSIP No. 961840105SCHEDULE 13D/APage 8 of 15 Pages

 

 

(a) This Schedule 13D is filed by (i) Clinton Magnolia Master Fund, Ltd., a Cayman Islands exempted company ("Magnolia"); (ii) Clinton Relational Opportunity Master Fund, L.P., a Cayman Islands exempted limited partnership ("CREL"); (iii) Clinton Relational Opportunity, LLC, a Delaware limited liability company, which serves as the investment manager to CREL ("CRO"); (iv) Clinton Group, Inc., a Delaware corporation, which serves as the investment manager to Magnolia (“CGI”); and (v) George E. Hall, a United States citizen, who serves as Chief Executive Officer of CGI ("Mr. Hall" and together with Magnolia, CREL, CRO and CGI, “Clinton” or the "Reporting Persons").

 

(b) The principal business address of CRO, CGI and Mr. Hall is 601 Lexington Avenue, 51st Floor, New York, New York 10022. The principal business address of Magnolia and CREL is c/o Credit Suisse Administration Services (Cayman) Ltd., P.O. Box 2003 GT, Grand Pavilion Commercial Centre, 802 West Bay Road, Grand Cayman, Cayman Islands.

 

(c) The principal business of CRO and CGI is to provide investment management services to private individuals and institutions. The principal business of Magnolia and CREL is to invest in securities. The principal business of Mr. Hall is to serve as Chief Executive Officer of CGI.

 

The name, citizenship, present principal occupation or employment and business address of each director and executive officer of CGI, Magnolia, CREL, and CRO is set forth in Schedule A attached hereto. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of such individuals owns any shares of Class A Common Stock.

 

Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
   
Item 3 of the Schedule 13D is hereby amended and restated in its entirety as follows:
   
 

Clinton used approximately $3,971,000 (including brokerage commissions) in the aggregate to acquire the shares of Class A Common Stock reported herein as beneficially owned.

 

Funds for the purchase of the Class A Common Stock reported herein as beneficially held by Clinton were derived from (i) available working capital of Magnolia, for the shares of Class A Common Stock held directly by it; (ii) available working capital of CREL, for the shares of Class A Common Stock held directly by it; and (iii) margin borrowings described in the following sentence, for the shares of Class A Common Stock held directly by Magnolia and CREL. Such Class A Common Stock is held by Clinton in commingled margin accounts, which may extend margin credit to Clinton from time to time, subject to applicable federal margin regulations, stock exchange rules and credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the account. The margin accounts bear interest at a rate based upon the broker’s call rate from time to time in effect. Because other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Class A Common Stock reported herein as beneficially owned by Clinton.

 

 

Item 4. PURPOSE OF TRANSACTION

 

   
Item 4 of the Schedule 13D is hereby amended and supplemented by the addition of the following:
   
 
CUSIP No. 961840105SCHEDULE 13D/APage 9 of 15 Pages

 

 

On November 19, 2014, CGI sent a letter (the "Letter") to the Board of Directors of the Issuer  (the "Board") encouraging the Board to clarify the Board's intent regarding the Issuer's liquidity situation and its pro forma capital structure. CGI suggested the Issuer take the following strategic action: (i) increase its available liquidity by engaging alternate lenders, (ii) address the issues in the Issuer's equity financing transaction announced September 3, 2014, (iii) develop a backup plan regarding its real estate agreements, and (iv) explore potential transactions with alternate investors, such as private equity firms. On November 19, 2014, CGI also issued a press release (the "Press Release") containing the full text of the Letter, which commended the Issuer for its recent actions.

 

The foregoing summary of the Letter and the Press Release is qualified in its entirety by reference to the full text of the Press Release, which contains the full text of the Letter, a copy of which is attached as Exhibit 28 to this Schedule 13D and is incorporated by reference herein.

 

Item 5. INTEREST IN SECURITIES OF THE ISSUER
   
Paragraphs (a) – (c) of Item 5 of the Schedule 13D are hereby amended and restated in their entirety as follows:
   
  (a) The aggregate number and percentage of shares of Class A Common Stock to which this Schedule 13D relates is 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock), constituting approximately 6.1% of the Issuer’s currently outstanding Class A Common Stock. The aggregate number and percentage of shares of Class A Common Stock reported herein are based upon the 84,309,311 shares of Class A Common Stock outstanding as of September 5, 2014, as reported in the Issuer’s Quarterly Report on Form 10-Q for the period ended August 2, 2014 filed with the SEC on September 11, 2014.

   
  (i) Magnolia
    (a) As of the date hereof, Magnolia may be deemed the beneficial owner of 1,336,661 shares of Class A Common Stock.
      Percentage: Approximately 1.6% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 1,336,661 shares of Class A Common Stock
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 1,336,661 shares of Class A Common Stock

       
  (ii) CREL:
    (a) As of the date hereof, CREL may be deemed the beneficial owner of 2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock).
      Percentage: Approximately 2.4% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

 

         
  (iii) CRO:
 
CUSIP No. 961840105SCHEDULE 13D/APage 10 of 15 Pages

 

    (a) As of the date hereof, CRO may be deemed the beneficial owner of 2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock).
      Percentage: Approximately 2.4% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 2,026,126 shares of Class A Common Stock (including options to purchase 62,500 shares of Class A Common Stock)

 

         
  (iv) CGI:
    (a) As of the date hereof, CGI may be deemed the beneficial owner of 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock).
      Percentage: Approximately 6.1% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)

 

   
  (v) Mr. Hall:
    (a) As of the date hereof, Mr. Hall may be deemed the beneficial owner of 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock).
      Percentage: Approximately 6.1% as of the date hereof.
    (b) 1. Sole power to vote or direct vote: 0
      2. Shared power to vote or direct vote: 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)
      3. Sole power to dispose or direct the disposition: 0
      4. Shared power to dispose or direct the disposition: 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock)
         
 
CUSIP No. 961840105SCHEDULE 13D/APage 11 of 15 Pages

 

 

(b) By virtue of investment management agreements with Magnolia, its ownership of CRO, a sub-advisory agreement governing a portion of a mutual fund portfolio (“CASF”) that holds 1,481,806 shares of Class A Common Stock (including options to purchase 75,400 shares of Class A Common Stock), and a sub-advisory agreement governing a mutual fund portfolio (“WKCAX”) that holds 308,009 shares of Class A Common Stock, CGI has the power to vote or direct the voting, and to dispose or direct the disposition, of all of the 5,152,602 shares of Class A Common Stock (including options to purchase 137,900 shares of Class A Common Stock) beneficially owned by Magnolia and CREL, and held by CASF and WKCAX. By virtue of his direct and indirect control of CGI, Mr. Hall is deemed to have shared voting power and shared dispositive power with respect to all Class A Common Stock as to which CGI has voting power or dispositive power.

 

(c) All transactions in Class A Common Stock effected by the Reporting Persons since the filing of Amendment No. 20 are set forth in Schedule B hereto. Unless otherwise indicated, all such transactions were effected in the open market.

 

Item 7. MATERIAL TO BE FILED AS EXHIBITS
 
Item 7 of this Schedule 13D is hereby amended and supplemented as follows:

 

Exhibit Description
28 Letter to the Board, dated November 19, 2014

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 12 of 15 Pages

 

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: November 19, 2014

 

    Clinton Magnolia Master Fund, Ltd.
       
    By: Clinton Group, Inc., its investment manager
       
    By: /s/ Francis Ruchalski
    Name: Francis Ruchalski
    Title: Chief Financial Officer
     
    Clinton Relational Opportunity Master Fund, L.P.
       
    By: Clinton Relational Opportunity, LLC, its investment manager
       
    By: /s/ John Hall
    Name: John Hall
    Title: Authorized Signatory
       
    Clinton Relational Opportunity, LLC
       
    By: /s/ John Hall
    Name: John Hall
    Title: Authorized Signatory
     
    Clinton Group, Inc.
       
    By: /s/ Francis Ruchalski
    Name: Francis Ruchalski
    Title: Chief Financial Officer
       
       
    /s/ George E. Hall
    George E. Hall
     
     

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 13 of 15 Pages

Schedule A

 

Directors and Executive Officers of Certain Reporting Persons

 

CLINTON GROUP, INC.

 

The following sets forth the name, position and principal occupation of each director and executive officer of CGI. Each such person is a citizen of the United States of America. The business address of each director and executive officer is 601 Lexington Avenue, 51st Floor, New York, New York 10022.

 

Name Position and Principal Occupation
George E. Hall Director, Chief Executive Officer and President
Francis A. Ruchalski Director and Chief Financial Officer
John L. Hall Director and Secretary  
Nader Behbehani Chief Compliance Officer

 

CLINTON MAGNOLIA MASTER FUND, LTD.

 

The following sets forth the name, principal occupation and business address of each director of Magnolia. There are no executive officers of Magnolia. Each such person is a citizen of the United Kingdom.

 

Name Principal Occupation Business Address
Jane Fleming

Client Accountant of Queensgate Bank & Trust Company Ltd.

 

 c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
Dennis Hunter

Director of Queensgate Bank & Trust Company Ltd.

 

c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands

 

Roger Hanson Director of dms Management Ltd. c/o dms Management Ltd., P.O. Box 31910 SMB, Ansbacher House, 20 Genesis Close, Grand Cayman, Cayman Islands

 

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.

 

Clinton Relational Opportunity GP LLC, a Delaware limited liability company, is the general partner of CREL. George E. Hall is the controlling person of Clinton Relational Opportunity GP LLC.

 

CLINTON RELATIONAL OPPORTUNITY, LLC

 

George E. Hall is the controlling person of CRO.

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 14 of 15 Pages

 

Schedule B

 

The following table sets forth all transactions with respect to the shares of Class A Common Stock effected since the filing of Amendment No. 20 by any of the Reporting Persons.  Except as otherwise noted, all such transactions in the table were effected in the open market through a broker.

Magnolia

 

Date of Transaction Shares Purchased (Sold) Price per Share ($)
10/31/14 (50,000) 0.3412
10/31/14 5,000 0.345
10/31/14 (45,000) 0.3437
11/5/14 39,518 0.382
11/6/14 20,150 0.3805
11/6/14 17,500 0.3813
11/7/14 25,000 0.34
11/11/14 20,000 0.3002
11/11/14 80,860 0.3041
11/13/14 63,401 0.2792
11/18/14 3,600 0.243
11/18/14 (15,300) 0.2418
11/18/14 4,300 0.2431
11/18/14 2,700 0.2831

 

CREL

 

Date of Transaction Shares Purchased (Sold) Price per Share ($)
10/29/14 1,000 0.3753
11/5/14 39,519 0.382
11/6/14 20,150 0.3805
11/6/14 17,500 0.3813
11/12/14 (60,640) 0.2901
11/13/14 (59,500) 0.2731
11/13/14 (39,500) 0.2717
11/13/14 (23,500) 0.2667
11/13/14 (13,000) 0.2629
11/13/14 (172,600) 0.2585
11/14/14 (155,000) 0.2555
11/17/14 (27,000) 0.2394
11/17/14 (68,500) 0.2377

 

CASF

 

Date of Transaction Shares Purchased (Sold) Price per Share ($)
11/17/14 (27,000) 0.2394
11/17/14 (68,500) 0.2377

 

WKCAX

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 15 of 15 Pages

 

Date of Transaction Shares Purchased (Sold) Price per Share ($)
10/29/14 (3,300) 0.4006
10/29/14 (500) 0.403
11/4/14 30,000 0.3684
11/4/14 70,000 0.3692
11/7/14 (37,000) 0.3622
11/7/14 (63,000) 0.3638
11/7/14 (40,339) 0.3308
11/10/14 (5,700) 0.3216
11/10/14 (6,999) 0.3211
11/10/14 (4,730) 0.322
11/11/14 (40,000) 0.3009
11/11/14 (10,000) 0.3058
11/11/14 (38,974) 0.3025
11/12/14 (54,200) 0.2924
11/12/14 (116,184) 0.2913
11/12/14 (25,160) 0.2901
11/19/14 25,000 0.2785
11/19/14 40,000 0.2827
     

 

 EX-99 2 p14-2243exhibit28.htm EXHIBIT 28

EXHIBIT 28

 

CLINTON GROUP HIGHLIGHTS THE OPTIONS AVAILABLE TO WET SEAL TODAY

 

NEW YORK, November 19, 2014 /PRNewswire/ -- Clinton Group, Inc., which together with its affiliates and funds (“Clinton Group”) is an owner of equity interests in Wet Seal, Inc. (NASDAQ:WTSL) ("Wet Seal" or the “Company”), today announced that it has sent a letter to the Board of Directors of Wet Seal detailing the multiple strategic and financial options to the Company today.

 

“We are confident Ed Thomas is executing the early stages of the turnaround. We are hopeful that the Board is exhaustively running down the myriad options available to the Company today to shore up its balance sheet and position itself for the future,” said Joseph A. De Perio, Senior Portfolio Manager of the Clinton Group.

 

A complete copy of the Clinton Group’s letter is below:

 

About Clinton Group, Inc.

 

Clinton Group, Inc. is a diversified asset management firm that is a Registered Investment Advisor. The firm has been investing in global markets since its inception in 1991 with expertise that spans a wide range of investment styles and asset classes.

 

CONTACT: Clinton Group, Inc., +1-212-825-0400

 

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 1 of 3 Pages

 

[Clinton Group Letterhead]

 

 

November 19, 2014

The Wet Seal, Inc.

26972 Burbank

Foothill Ranch, CA 92610

 

 

Attn: Board of Directors

 

Ladies and Gentlemen:

I write on behalf of Clinton Group, Inc., the investment manager to various funds and partnerships (“Clinton Group”) that collectively own a meaningful stake in the common stock of Wet Seal Inc. (“Wet Seal” or the “Company”).

We acknowledge the swift efforts of returning CEO, Ed Thomas to reduce headcount, take steps to right-size the expense structure, assess the eCommerce strategy and assist in the merchant efforts. Despite the tectonic shift in leadership, the stock is down over 80% since the beginning of his tenure, a move we did not anticipate was in the realm of possibility when we suggested his name to the Board in August. We acknowledge that it is indeed “tough out there” in the marketplace and macro factors are headwinds. We also believe that there is significant confusion in the marketplace today regarding the equity commitment and planned rights offering announced in early September. Shareholders like us are wondering what to make of the Company’s liquidity needs and what the pro forma capital structure will be. Clarification on the Board’s intent and expected process set forth to the marketplace would go a long way to stemming the tide of uncertainty that appears to us to be reflected in the stock price at the moment.

The stock price action would imply a time of crisis and, as such, we would like to outline the options we believe are available to the Company today to avoid any such crisis.

Debt Financing

As of August 2, 2014, the Company had $28.7 million available of its $35 million senior revolving facility. This amount of liquidity available is subject to borrowing base limitations which we believe should be materially similar to last quarter. However, we strongly believe, based on discussions in the industry, that there are alternate lenders who would welcome the opportunity to displace Bank of America as the Company’s ABL lender at a higher capacity level. While this will come at a higher rate, we believe the Company can increase its available liquidity by 30%. We are hopeful you will engage in a dialogue with such interested groups and we intend to continue to introduce you to such lenders.

 
CUSIP No. 961840105SCHEDULE 13D/APage 2 of 3 Pages

 

Equity Financing

We believe most would agree that the Company’s equity financing transaction announced on September 3, 2014 has not been consummated as per the original intentions of the stakeholders negotiating the proposed transaction. It is clear to us that the Board’s position to ensure fairness to shareholders by structuring a two-step deal with a rights offering has indeed backfired, and time and downward market pressure has created more dilution then originally intended. We do not understand the Board's inertia in this matter and have questioned this path regularly since September. There are a number of institutions that committed to the September 3rd transaction that we believe would have interest in a non-registered deal such as a PIPE transaction or a different structured security. Upon circling anchor orders in such a transaction, the Board could go public and do an overnight deal ensuring all shareholders the ability to participate in such a transaction.

Real Estate Concessions

We are confident Mr. Thomas is doing all he can with his real estate counterparties today. Our hope is that a deal will coalesce with multiple landlords providing some relief in conjunction with the Company shoring up its balance sheet with both debt and equity financing. However, we are mindful that the macro environment is tough, and the Board should be developing a backup plan should the real estate counterparties be unforgiving.

Strategic Transaction

We are aware of a number of private equity firms with similar businesses to Wet Seal in their portfolios. We are also aware of a number of retailers that seek the retail footprint and infrastructure that Wet Seal possesses. As a result, we are confident that there are a number of strategic and financial investors that would back Mr. Thomas in a turnaround at Wet Seal. The Board should be running a tight process, not disruptive to management, to seek a transaction with these investors as a potential alternative for the company.

In addition to the strategic measures outlined, we are aware of the potential value of the Company’s net operating loss position (“NOLs”). We would urge the Board to take steps to preserve the inherent value in the NOL.

Our hope is that all of these work streams are happening behind the scenes, and that this letter simply reiterates ongoing exhaustive efforts. Communication to shareholders has been deficient, and our hope is that this is remedied in the near future. We also look forward to the timely completion of our recent books and records demand to examine the Company’s shareholder list.

 

 

 

 

 
CUSIP No. 961840105SCHEDULE 13D/APage 3 of 3 Pages

We stand ready to assist in any way we can and hope that the communication channel remains open. We can be reached at (212) 825-0400.

Sincerely yours,

 

//ss//

 

Joseph A. De Perio

Senior Portfolio Manager