UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE l3D
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
DELCATH SYSTEMS, INC.
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(Name of Issuer)
Common Stock, $0.01 par value per share
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(Title of Class of Securities)
24661P104
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(CUSIP Number)
with a copy to:
Mr. Robert Ladd Robert G. Minion, Esq.
Laddcap Value Advisors LLC Lowenstein Sandler PC
650 Fifth Avenue, Suite 600 65 Livingston Avenue
New York, New York 10019 Roseland, New Jersey 07068
(212) 259-2070 (973) 597-2424
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 27, 2006
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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. 24661P104
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1) Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only):
Robert Ladd
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a)
(b)
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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: 1,958,991*
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Shares Beneficially 8) Shared Voting Power: 0*
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Owned by
Each Reporting 9) Sole Dispositive Power: 1,958,991*
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Person With 10) Shared Dispositive Power: 0*
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11) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,958,991*
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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): 10.0%*
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14) Type of Reporting Person (See Instructions): IN
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* Laddcap Value Partners LP, a Delaware limited partnership ("Laddcap"), is the
record holder of 1,958,991 shares of the common stock, par value $0.01 per share
(the "Shares"), of Delcath Systems, Inc. (the "Company"). Robert Ladd possesses
the sole power to vote and the sole power to direct the disposition of all
securities of the Company held by Laddcap. Thus, as of April 27, 2006 for the
purposes of Reg. Section 240.13d-3, Mr. Ladd is deemed to beneficially own
1,958,991 Shares, or 10.0% of the Shares deemed issued and outstanding as of
that date.
Item 4. Purpose of Transaction.
----------------------
Item 4 is hereby amended by adding the following after the sixth
paragraph thereof:
On April 27, 2006, Mr. Ladd, on behalf of Laddcap, the record holder
of more than ten percent (10%) of the Company's issued and outstanding Shares,
sent a letter to each member of the Company's Board of Directors (the "Board")
and to the Company's President and Chief Executive Officer, Mr. M.S. Koly. The
letter demands that the Company's President immediately call a special meeting
of the stockholders pursuant to Section 7 of Article Sixth of the Company's
Certificate of Incorporation and Article I, Section 2 of the Company's By-laws.
The first purpose of this special meeting would be to permit the
Company's stockholders to vote on a precatory stockholder proposal that the
poison pill should be eliminated. Specifically, the letter requests the
Company's Board to (i) rescind immediately the Company's poison pill and (ii)
take the immediate steps necessary so that no future poison pill can be adopted
without stockholder approval.
The second purpose of this special meeting would be to permit the
Company's stockholders to vote on a proposal to add Article X to the Company's
By-laws, which shall read as follows:
The term of office of an officer of the corporation
shall terminate immediately upon the affirmative vote,
at any meeting of stockholders of the corporation, of
a majority of the shares of stock of the corporation
entitled to vote and represented at the meeting.
The third purpose of this special meeting would be to permit the
Company's stockholders to vote on a proposal that the term of office of the
current President and Chief Executive Officer, Mr. Koly, shall terminate
immediately.
A copy of Mr. Ladd's April 27, 2006 letter is attached to this
Schedule 13D, as amended as an exhibit pursuant to Item 7 hereof.
Item 5. Interest in Securities of the Issuer.
------------------------------------
Item 5 is hereby amended and restated in its entirety as follows:
Based upon information set forth in the Notice of Annual Meeting of
Stockholders on Form 14A, as filed with the Securities and Exchange Commission
on April 24, 2006, there were 19,541,674 Shares issued and outstanding as of
April 17, 2006. As of April 27, 2006, Laddcap is the holder of 1,958,991 Shares.
Robert Ladd possesses the sole power to vote and the sole power to direct the
disposition of all securities of the Company held by Laddcap. Thus, as of April
27, 2006, for the purposes of Reg. Section 240.13d-3, Mr. Ladd is deemed to
beneficially own 1,958,991 Shares, or 10.0% of the Shares deemed issued and
outstanding as of that date.
The following table details the transactions in Shares by Mr. Ladd or
any other person or entity controlled by him or any person or entity for which
he possesses voting or investment control over the securities thereof (each of
which were purchases effected in an ordinary brokerage transaction) during the
sixty days on or prior to April 27, 2006:
Date Quantity of Shares Price per Share
---- ------------------ ---------------
March 14, 2006 20,000 $ 4.10
March 15, 2006 48,500 $ 4.23
March 15, 2006 1,000 $ 4.35
March 15, 2006 200 $ 4.37
March 15, 2006 5,800 $ 4.38
March 15, 2006 2,000 $ 4.39
March 15, 2006 12,000 $ 4.40
March 15, 2006 15,000 $ 4.43
March 16, 2006 10,000 $ 4.28
March 17, 2006 1,000 $ 4.38
March 17, 2006 1,500 $ 4.39
March 17, 2006 3,475 $ 4.40
March 17, 2006 4,500 $ 4.41
March 17, 2006 1,000 $ 4.42
March 20, 2006 5,950 $ 4.35
March 20, 2006 100 $ 4.39
March 20, 2006 475 $ 4.40
March 20, 2006 1,000 $ 4.41
March 23, 2006 500 $ 4.31
March 23, 2006 500 $ 4.32
March 29, 2006 1,300 $ 4.40
March 29, 2006 600 $ 4.41
March 29, 2006 600 $ 4.43
March 29, 2006 700 $ 4.44
March 29, 2006 12,100 $ 4.53
March 30, 2006 700 $ 4.33
March 30, 2006 700 $ 4.35
April 3, 2006 2,000 $ 4.48
April 3, 2006 100 $ 4.51
April 3, 2006 100 $ 4.52
April 3, 2006 1,000 $ 4.54
April 3, 2006 100 $ 4.55
April 3, 2006 12,000 $ 4.56
April 3, 2006 100 $ 4.57
April 3, 2006 4,200 $ 4.58
April 3, 2006 1,400 $ 4.59
April 3, 2006 10,600 $ 4.60
April 5, 2006 35,000 $ 4.35
April 6, 2006 1,000 $ 3.91
April 6, 2006 2,000 $ 3.92
April 6, 2006 1,000 $ 3.97
April 6, 2006 1,000 $ 3.98
April 17, 2006 22,000 $ 3.82
April 21, 2006 4,461 $ 4.25
April 21, 2006 930 $ 4.29
April 21, 2006 300 $ 4.30
April 21, 2006 200 $ 4.31
April 21, 2006 1,000 $ 4.45
Except as set forth above, there were no other transactions in Shares
or securities convertible into, exercisable for or exchangeable for Shares, by
Mr. Ladd or any other person or entity controlled by him or any person or entity
for which he possesses voting or investment control over the securities thereof
during the sixty days on or prior to April 27, 2006.
Item 7. Material to be Filed as Exhibits.
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7.1 Letter dated April 27, 2006 from Mr. Ladd, on behalf of Laddcap,
to each member of the Company's Board and to the Company's President and Chief
Executive Officer, Mr. Koly.
Signature
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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.
April 28, 2006
/s/ Robert Ladd
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Robert Ladd, in his capacity as the
managing member of Laddcap Value
Associates LLC, the general partner
of Laddcap Value Partners LP
Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (See 18 U.S.C. 1001).
Exhibit 7.1
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[Laddcap Value Partners LP Letterhead]
April 27, 2006
Mr. M.S. Koly, President and Director
Dr. Samuel Herschkowitz, Chairman of the Board
Mr. Mark A. Corigliano, Director
Mr. Daniel L. Isdaner, Director
Mr. Victor Nevins, Director
c/o Delcath Systems, Inc.
1100 Summer Street, Third Floor
Stamford, Connecticut 06905
Dear Messrs. Koly, Corigliano, Isdaner, Nevins, and Dr. Herschkowitz:
Laddcap Value Partners LP ("Laddcap") is Delcath Systems, Inc.'s
("Delcath") largest stockholder, owning more than ten percent (10%) of Delcath's
outstanding common stock. Delcath's Board of Directors (the "Board") and
management are already aware that we are profoundly disappointed with the
actions and inactions of Delcath's management and Board in continuing to chart a
course away from its primary obligation to enhance stockholder value. We believe
that Delcath's management and Board have violated and continue to violate their
fiduciary obligations by, among other things, implementing and continuing to
maintain certain policies that simply serve to entrench management and the Board
and place management's and the Board's interests above the interests of
Delcath's stockholders. We believe that Delcath's low enterprise value is
reflective of management's and the Board's self-serving policies.
Delcath's Board continues to maintain policies that were never approved by
the current stockholders. These policies include, but are not limited to, a
staggered Board, change of control payments for directors, the right of the
Board to issue shares of preferred stock without stockholder approval,
supermajority voting provisions to amend Delcath's By-laws and Certificate of
Incorporation, and a poison pill. If Delcath's management and Board were truly
seeking to enhance shareholder value, there would be no need for these policies.
In order for shareholder value to be immediately increased, we believe that
Delcath must rescind its poison pill. To that end, this letter is a demand by a
more than ten percent (10%) stockholder, upon Mr. M.S. Koly, Delcath's President
and Chief Executive Officer, to immediately call a special meeting of the
stockholders pursuant to Section 7 of Article Sixth of Delcath's Certificate of
Incorporation and Article I, Section 2 of Delcath's By-laws.
The first purpose of this special meeting is to permit Delcath's
stockholders to vote on a precatory stockholder proposal that the poison pill
should be eliminated. Specifically, this proposal requests Delcath's Board to
(i) rescind immediately Delcath's poison pill (i.e. the Rights Agreement dated
October 30, 2001, implemented by the Board without stockholder approval), and
(ii) take the immediate steps necessary so that no future poison pill can be
adopted without stockholder approval.
Laddcap urges Delcath's Board to promptly and properly restore value to its
stockholders by permitting Delcath's stockholders to recommend at the special
stockholders meeting whether or not they wish the poison pill to remain in
effect, and by the Board ultimately following the wishes of the stockholders to
whom the Board answers.
The second purpose of this special meeting is to permit Delcath's
stockholders to vote on a proposal to add Article X to Delcath's By-laws, which
shall read as follows:
The term of office of an officer of the corporation
shall terminate immediately upon the affirmative vote,
at any meeting of stockholders of the corporation, of
a majority of the shares of stock of the corporation
entitled to vote and represented at the meeting.
The third purpose of this special meeting is to permit Delcath's
stockholders to vote on a proposal that the term of office of the current
President and Chief Executive Officer, Mr. M.S. Koly, shall terminate
immediately.
As Delcath's largest stockholder, we care deeply about the performance and
future prospects of Delcath. We look forward to management and the Board
responding appropriately to ensure management and the Board satisfy their
fiduciary duties by putting the interests of the stockholders above their own.
Lastly, we are aware that Delcath maintains a policy that correspondence
sent to a Delcath director is first reviewed by Mr. Koly who then decides if the
correspondence shall be forwarded to the Delcath director to whom the
correspondence is addressed. We hereby demand that this letter be delivered
directly to the directors to whom it is addressed.
We look forward to your prompt and stockholder friendly response.
LADDCAP VALUE PARTNERS LP
By:/s/ Robert Ladd
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Robert Ladd, in his capacity
as the managing member of
Laddcap Value Associates LLC,
the general partner of Laddcap
Value Partners LP
cc: Robert G. Minion, Esq.
Jeffrey M. Shapiro, Esq.
Thomas S. Levato, Esq.
Richard Bernstein, Esq.
William J. Haubert, Esq.
Lisa S. Schmidt, Esq.