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): May 16, 2011 (May 12, 2011)
MoneyGram International, Inc.
(Exact name of registrant as specified in its charter)
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| Delaware
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1-31950
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16-1690064 |
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification Number) |
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| 2828 N. Harwood Street, 15th Floor |
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| Dallas, Texas
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75201 |
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(Address of principal
executive offices)
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(Zip code) |
Registrant’s telephone number, including area code: (214) 999-7552
Not applicable
(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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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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On May 16, 2011, a hearing was held in connection with the previously reported case pending in
the Delaware Court of Chancery brought against MoneyGram International, Inc. (the
“Company”) by Willie R. Pittman et al. At the hearing, the plaintiffs’ request for a preliminary
injunction was denied.
On May 12, 2011, a complaint was filed in the County Court at Law No. 3 in Dallas County,
Texas by Hilary Kramer purporting to be a class action complaint on behalf of all shareholders and
a shareholder derivative complaint against the Company, Thomas H. Lee Partners, L.P. (“THL”), the
Goldman Sachs Group, Inc. (“Goldman Sachs”) and each of the Company’s directors. Ms. Kramer
alleges in her complaint that she is a stockholder of the Company and asserts, among other things,
(i) breach of fiduciary duty claims against the Company’s directors, THL and Goldman Sachs and (ii)
claims for aiding and abetting breach of fiduciary duties against Goldman Sachs. Ms. Kramer
purports to sue on her own behalf and on behalf of the Company and its stockholders. Ms. Kramer
seeks to, among other things, enjoin the proposed recapitalization of the Company, pursuant to
which, among other things, subject to the terms and conditions in the recapitalization agreement,
certain affiliates and co-investors of THL (the “THL Investors”) will convert all of their shares
of Series B Preferred Stock of the Company into common stock of the Company and certain affiliates
of Goldman Sachs (the “GS Investors”) will convert all of their shares of Series B-1 Preferred
Stock of the Company into shares of Series D Preferred Stock of the Company. The Company intends
to defend the lawsuit vigorously, including opposing any request to enjoin the recapitalization.
Forward Looking Statements
The statements contained in this Current Report on Form 8-K regarding MoneyGram International, Inc.
that are not historical and factual information contained herein, particularly those statements
pertaining to the Company’s expectations, guidance or future operating results, are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and are made
under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These
statements are only as of the date they are made, and unless legally required, the Company
undertakes no obligation to update or revise publicly any forward-looking statement. Words such as
“estimates,” “expects,” “projects,” “plans” and other similar expressions or future or conditional
verbs such as “will,” “should,” “could,” and “would” are intended to identify such forward-looking
statements. These forward-looking statements are based on management’s current expectations and are
subject to uncertainty and changes in circumstances. For instance, although the Company intends to
defend the lawsuits described above vigorously, there is no assurance that such defense will be
successful or that the Company will complete the proposed recapitalization contemplated by the
Recapitalization Agreement dated March 7, 2011, by and between the Company, the THL Investors and
the GS Investors (as amended, the “Recapitalization Agreement”). The Recapitalization Agreement
will terminate if the proposed recapitalization does not receive the necessary approval of the
Company’s stockholders or if the Company, the THL Investors or the GS Investors fail to satisfy
conditions to closing. These forward-looking statements are also subject to changes in
circumstances due to a number of factors, including, but not limited to the following: (a) our
substantial dividend and debt service obligations and our covenant requirements which could impact
our ability to obtain additional financing and to operate and grow our business; (b) sustained
illiquidity of global financial markets which may adversely affect our liquidity and our agents’
liquidity, our access to credit and capital and our agents’ access to credit and capital and our
earnings on our investment portfolio; (c) weak economic conditions generally and in geographic
areas or industries that are important to our business which may cause a decline in our money
transfer growth rate and transaction volume and/or revenue; (d) a material slow down or complete
disruption of international migration patterns which could adversely affect our money transfer
volume and growth rate; (e) a loss of material retail agent relationships or a reduction in
transaction volume from them; (f) our ability to develop and implement successful pricing
strategies for our services; (g) stockholder lawsuits and other litigation or government
investigations of the Company or its agents which could result in material costs, settlements,
fines or penalties; (h) our ability to maintain sufficient banking relationships; (i) our ability
to attract and retain key employees; (j) our ability to maintain capital sufficient to pursue our
growth strategy, fund key strategic initiatives and meet evolving regulatory requirements; (k) our
ability to successfully and timely implement new or enhanced technology and infrastructure,
delivery methods and product and service offerings and to invest in products, services and
infrastructure; (l) our ability to adequately protect our brand and our other intellectual property
rights and to avoid infringing on third-party intellectual property rights; (m) competition from
large competitors, niche competitors or new competitors that may enter the markets in which we
operate; (n) the impact of laws and regulatory requirements including the recently enacted
Dodd-Frank Wall Street Reform and Consumer
Protection Act and the regulations required to be developed thereunder, and other industry
practices in the U.S. and abroad, including changes in laws, regulations or other industry
practices and standards that may increase our costs of doing business, reduce the market for or
value of our services or change our relationships with our customers, investors and other
stakeholders; (o) our offering of money transfer services through agents in regions that are
politically volatile or, in a limited number of cases, are subject to certain Office of Foreign
Assets Control restrictions which could result in contravention of U.S. law or regulations by us or
our agents which could subject us to fines and penalties and cause us reputational harm; (p) a
breakdown, catastrophic event, security breach, privacy breach, improper operation or other event
impacting our systems or processes or our vendors’, agents’ or financial institution customers’
systems or processes, which could result in financial loss, loss of customers, regulatory sanctions
and damage to our brand and reputation; (q) our ability to scale our technology to match our
business and transactional growth; (r) our ability to manage our credit exposure to retail agents
and financial institution customers; (s) our ability to mitigate fraud risks from consumers, agents
and other third parties; (t) our ability to successfully manage risks associated with running
Company-owned retail locations and acquiring new businesses; (u) our ability to successfully manage
risks associated with our international sales and operations including the potential for political,
economic or other instability in countries that are important to our business; (v) our compliance
with the internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002; (w) the
outcome of positions we take with respect to federal, state, local and international taxation; (x)
additional risk factors described in our other filings with the Securities and Exchange Commission
from time to time.