11.
Aggregate Amount Beneficially Owned by Each Reporting Person 1,538,757
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
13.
Percent of Class Represented by Amount in Row (11) 11.4%
14.
Type of Reporting Person (See Instructions) IN
Introductory Note
The
Reporting Persons previously filed a statement on Schedule 13G with respect to Common
Stock of the Issuer. The Reporting Persons continue to hold such securities without any
purpose or effect of changing or influencing control of the Issuer and are not a
participant in any transaction in any transaction having such purpose or effect.
Item 1. Security and
Issuer
This
statement on Schedule 13D relates to the Common Stock, $0.001 par value per share (the
“Common Stock”) of Workflow Management, Inc., a Delaware corporation
(“Workflow”). Workflow’s principal executive office is located at 240 Royal
Palm Way, Palm Beach, FL 33480.
Item 2. Identity and
Background
This
Statement is being filed by (i) Springhouse Capital, LP (“Springhouse”), by
virtue of its direct ownership of Common Stock, (ii) Springhouse Capital LLC (the
“General Partner”), by virtue of it being the sole general partner of
Springhouse, and (iii) Brian Gaines, by virtue of his direct ownership of Common Stock and
by virtue of being the sole managing member of the General Partner. Springhouse, the
General Partner and Mr. Gaines are collectively the “Reporting Persons” and
individually a “Reporting Person.”
Springhouse
is a Delaware limited partnership. The General Partner is a Delaware limited liability
company. Mr. Gaines is a citizen of the United States. Each of the Reporting Persons’
principal business office is located at 520 Madison Avenue, 32nd Floor, New York, NY
10022.
Springhouse
is principally engaged in the business of acting as an investment fund. The General
Partner is principally engaged in acting as Springhouse’s general partner. Mr. Gaines
is principally engaged in acting as the managing member of the General Partner.
During
the last five years, none of the Reporting Persons has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount
of Funds or Other Consideration
The
total amount of funds used by Springhouse to acquire the Common Stock reported in Item 5
was $6,023,862.83 (including commissions). Such funds were provided by Springhouse’s
capital available for investment, and no part of such funds were borrowed.
The
total amount of funds used by Mr. Gaines to acquire the Common Stock reported in Item 5
was $243,406.50 (including commissions). Such funds were Mr. Gaines’ personal funds
available for investment and no part of such funds were borrowed.
Item 4. Purpose of
Transaction
Springhouse
and Mr. Gaines acquired the Common Stock reported in Item 5 in order to acquire an equity
interest in Workflow.
The
Reporting Persons intend to continuously review their investment in Workflow. Depending
upon their evaluation of the Workflow’s prospects and upon future developments
(including, but not limited to, performance of the Common Stock in the market,
availability of funds, alternative uses of funds, the status of the merger proposal
described below and general stock market and economic conditions), any of the Reporting
Persons may from time to time purchase additional Common Stock or dispose of all or a
portion of the Common Stock held by such person. Any such additional purchases or sales of
the Common Stock may be in open market or privately-negotiated transactions or otherwise.
On
January 28, 2004, Mr. Gaines sent Workflow the letter attached as Exhibit A and
incorporated by this reference.
On
February 2, 2004, Workflow announced that, by vote of all of its non-management directors,
it had entered into a definitive merger agreement to be acquired by Perseus, L.L.C. and
The Renaissance Group, LLC for $4.87 per share of Common Stock (the “Perseus
Transaction”).
The
Reporting Persons oppose the Perseus Transaction in its current form. The value of the
Perseus Transaction is less than the closing price of the Common Stock during the six
months prior to the announcement of the Perseus Transaction (with the exception of a
single trading day). Based on information currently available, the Reporting Persons
believe that Workflow has the potential within two years to be worth substantially more
than the value of the Perseus Transaction. In addition, the Reporting Persons believe that
Workflow’s Board of Directors has not actively sought replacement financing for
Workflow’s current bank financing and, as a result, unless Workflow immediately seeks
replacement financing, Workflow will face a needless liquidity crisis if the Perseus
Transaction is not consummated. The Reporting Persons also believe that replacement
financing could be obtained in a timely manner on reasonable terms if the Board of
Directors seeks such financing. The Reporting Persons further believe that the process
Workflow’s Board of Directors followed in connection with the Perseus Transaction was
flawed because the Board negotiated exclusively with the Perseus group for several months.
Finally, the Reporting Persons believe that the 10% breakup fee provided to the Perseus
group is illegal due to its size in relation to the value of the transaction to Workflow
stockholders.
As
a result of these factors, and in particular because the only alternative to the Perseus
Transaction would be a needless liquidity crisis that would be a direct result of the
Board of Directors’ failure to pursue replacement refinancing, the Reporting Persons
believe that the Perseus Transaction as currently structured is coercive to Workflow
stockholders.
The
Reporting Persons believe that the Board of Directors should immediately act to correct
the coercive elements of the Perseus Transaction and immediately pursue replacement
financing. As shareholders with a long term perspective, the Reporting Persons want the
opportunity to participate in the increase in stockholder value that may occur as a result
of Workflow’s restructuring and improving industry conditions.
On February 4, 2004, Mr. Gaines discussed the Reporting Persons' concerns with
Gerald F. Mahoney, the Chairman of Workflow's Board of Directors and with
representatives of Jefferies & Company, Inc., the Company's financial advisor.
The Reporting Persons intend to continue to communicate their concerns to the Board of
Directors. The Reporting Persons do not believe that the current Board of Directors has
taken into account the concerns of Workflow’s owners. If the Workflow Board of Directors
fails to take action as described above, the Reporting Persons will consider communicating
their views to other stockholders and may consider other action that, in the opinion of
the Reporting Persons, is reasonably designed to cause the Workflow Board of Directors to
take appropriate action. The Reporting Persons do not, however, presently intend to engage
in a control transaction or a contested solicitation for the election of Workflow’s
Board of Directors.
Except
as otherwise described in this statement on Schedule 13D, none of the Reporting Persons
has formulated any plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of Workflow, or the disposition of
securities of Workflow; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Workflow or any of its subsidiaries; (c) a sale
or transfer of a material amount of assets of Workflow or any of its subsidiaries; (d) any
change in the present Board of Directors or management of Workflow, including any plans or
proposals to change the number or term of directors or to fill any existing vacancies on
the Board; (e) any material change in the present capitalization or dividend policy of
Workflow; (f) any other material change in Workflow’s business or corporate
structure; (g) any changes in Workflow’s charter or by-laws or other actions which
may impede the acquisition or control of Workflow by any person; (h) causing a class of
securities of Workflow to be delisted from a national securities exchange or cease to be
authorized to be quoted in an interdealer quotation system of a registered national
securities association; (i) causing a class of equity securities of Workflow to become
eligible for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or (j) any action similar to those enumerated above.
Item 5. Interest in
Securities of the Issuer
The
ownership percentages set forth below are based on 13,458,698 outstanding shares Common
Stock, as stated in the merger agreement for the Perseus Transaction filed as an exhibit
to Workflow’s current report on Form 8-K dated February 2, 2004:
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