UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 24)*
UNDER THE SECURITIES EXCHANGE ACT OF 1934
BLUEFLY, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
096227103
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
(212) 872-1000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JUNE 15, 2006
(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 ss.ss.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 Rule ss.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).
Continued on following page(s)
Page 1 of 12 Pages
CUSIP NO. 096227103 PAGE 2 OF 12 PAGES
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Quantum Industrial Partners LDC
2 Check the Appropriate Box If a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
Not applicable.
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
Number of 49,226,779
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 49,226,779
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
49,226,779
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
38.4%
14 Type of Reporting Person (See Instructions)
OO, IV
CUSIP NO. 096227103 PAGE 3 OF 12 PAGES
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
QIH Management Investor, L.P.
2 Check the Appropriate Box If a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
Not applicable.
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 49,226,779
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 49,226,779
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
49,226,779
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
38.4%
14 Type of Reporting Person (See Instructions)
PN, IA
CUSIP NO. 096227103 PAGE 4 OF 12 PAGES
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
QIH Management LLC
2 Check the Appropriate Box If a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
Not applicable.
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 49,226,779
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 49,226,779
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
49,226,779
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
38.4%
14 Type of Reporting Person (See Instructions)
OO
CUSIP NO. 096227103 PAGE 5 OF 12 PAGES
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Soros Fund Management LLC
2 Check the Appropriate Box If a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
Not applicable.
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 49,226,779
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 49,226,779
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
49,226,779
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
38.4%
14 Type of Reporting Person (See Instructions)
OO, IA
CUSIP NO. 096227103 PAGE 6 OF 12 PAGES
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
SFM Domestic Investments LLC
2 Check the Appropriate Box If a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
Not applicable.
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 1,609,902
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,609,902
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,609,902
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
1.3%
14 Type of Reporting Person (See Instructions)
OO
CUSIP NO. 096227103 PAGE 7 OF 12 PAGES
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
George Soros (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group (See Instructions)
a. [ ]
b. [X]
3 SEC Use Only
4 Source of Funds (See Instructions)
Not applicable.
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 50,836,681
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 50,836,681
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
50,836,681
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[ ]
13 Percent of Class Represented By Amount in Row (11)
39.7%
14 Type of Reporting Person (See Instructions)
IA
CUSIP NO. 096227103 PAGE 8 OF 12 PAGES
This Amendment No. 24 to Schedule 13D relates to shares of Common Stock, $0.01
par value per share (the "Shares" or "Common Stock"), of Bluefly, Inc. (the
"Issuer"). This Amendment No. 24 supplementally amends the initial statement on
Schedule 13D, dated August 6, 1999, and all amendments thereto (collectively,
the "Initial Statement"), filed by the Reporting Persons (as defined herein).
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Initial Statement. The Initial Statement is supplementally
amended as follows.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed on behalf of each of the following persons
(collectively, the "Reporting Persons"):
(i) Quantum Industrial Partners LDC ("QIP");
(ii) QIH Management Investor, L.P. ("QIHMI");
(iii) QIH Management LLC ("QIH Management");
(iv) Soros Fund Management LLC ("SFM LLC");
(v) SFM Domestic Investments LLC ("SFM Domestic Investments");
and
(vi) Mr. George Soros ("Mr. Soros").
This Statement relates to the Shares and other securities convertible into
Shares held for the accounts or benefit of QIP and SFM Domestic Investments.
QIHMI is a minority shareholder of, and is vested with investment discretion
with respect to portfolio assets held for the account of, QIP. The sole general
partner of QIHMI is QIH Management. SFM LLC is the sole managing member of QIH
Management. Mr. Soros is the Chairman of SFM LLC and the sole managing member of
SFM Domestic Investments.
On December 27, 2002, Mr. Soros appealed a decision of the 11e Chambre du
Tribunal Correctionnel in Paris, France that fined him 2.2 million euros on
December 20, 2002 based on a finding of insider trading with respect to trading
in securities of Societe Generale in 1988. On March 24, 2005, the Paris Court of
Appeal affirmed the decision of the 11e Chambre du Tribunal Correctionnel and on
June 14, 2006 the Cour de Cassation upheld such decision, but ordered the Court
of Appeal to determine whether the fine should be reduced. Mr. Soros intends to
appeal this decision to the European Court of Justice.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Item 6 hereof is hereby incorporated by
reference into this Item 3.
ITEM 4. PURPOSE OF TRANSACTION.
The information set forth in Item 6 hereof is hereby incorporated by
reference into this Item 4.
Except as otherwise set forth in Item 6 hereof, the Reporting Persons
reserve the right to acquire, or cause to be acquired, additional securities of
the Issuer, to dispose of, or cause to be disposed, such securities at any time
or to formulate other purposes, plans or proposals regarding the Issuer or any
CUSIP NO. 096227103 PAGE 9 OF 12 PAGES
of its securities, to the extent deemed advisable in light of general investment
and trading policies of the Reporting Persons, market conditions or other
factors.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
According to information provided by the Issuer, the number of Shares
outstanding was 128,205,660 as of June 15, 2006.
(a) (i) Each of QIP, QIHMI, QIH Management and SFM LLC may be deemed the
beneficial owner of 49,226,779 Shares (approximately 38.4% of the total number
of Shares outstanding assuming the exercise and conversion of all of the
securities held for the account or benefit of QIP). This number consists of (A)
48,599,355 Shares, (B) 587,424 Shares issuable upon the exercise of warrants
held for the account of QIP, and (C) 40,000 Shares issuable in the aggregate
upon the exercise of options held for the benefit of QIP by an employee of SFM
LLC and an advisor to QIP who serve on the Issuer's board of directors.
(ii) SFM Domestic Investments may be deemed the beneficial owner of
1,609,902 Shares (approximately 1.3% of the total number of Shares outstanding
assuming the exercise and conversion of all the securities held for its
account). This number consists of (A) 1,590,682 Shares, and (B) 19,220 Shares
issuable upon the exercise of warrants held for the account of SFM Domestic
Investments.
(iii) Mr. Soros may be deemed to be the beneficial owner of 50,836,681
Shares (approximately 39.7%) of the total number of Shares outstanding assuming
the exercise and conversion of all of the securities held for the accounts or
benefit of QIP and SFM Domestic Investments). This number consists of (A)
49,226,779 Shares which may be deemed to be beneficially owned by QIP as
described above, and (B) 1,609,902 Shares which may be deemed to be beneficially
owned by SFM Domestic Investments as described above. Mr. Soros disclaims
beneficial ownership of any securities not held directly for his account.
(b) (i) Each of QIP, QIHMI, QIH Management and SFM LLC may be deemed to
have the sole power to direct the voting and disposition of the 49,226,779
Shares which may be deemed to be beneficially owned by QIP as described above.
(ii) SFM Domestic Investments may be deemed to have the sole power to
direct the voting and disposition of the 1,609,902 Shares which may be deemed to
be beneficially owned by SFM Domestic Investments as described above.
(iii) Mr. Soros (as a result of his position with SFM LLC and in his
capacity as the sole managing member of SFM Domestic Investments) may be deemed
to have the sole power to direct the voting and disposition of the 50,836,681
Shares which may be deemed to be beneficially owned by QIP and SFM Domestic
Investments as described above.
(c) Except as described herein, there have been no transactions effected
with respect to the Shares since June 7, 2006 (the date of the last filing on
Schedule 13D) by any of the Reporting Persons.
(d) (i) The shareholders of QIP, including Quantum Industrial Holdings
Ltd., a British Virgin Islands international business company, have the right to
participate in the receipt of dividends from, or proceeds from the sale of, the
securities held for the account of QIP in accordance with their ownership
interests in QIP.
CUSIP NO. 096227103 PAGE 10 OF 12 PAGES
(ii) Certain members of SFM Domestic Investments have the right to
participate in the receipt of dividends from, or proceeds from the sale of, the
securities held for the account of SFM Domestic Investments.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
On June 5, 2006, QIP, SFM Domestic Investments, the Issuer and the other
parties named therein (the "New Investors") entered into a Stock Purchase
Agreement (the "Purchase Agreement"), pursuant to which the Issuer had agreed to
issue to the New Investors, and the New Investors had agreed to purchase from
the Issuer, at the closing, an aggregate of 60,975,610 shares of the Issuer's
Common Stock, for a per share price of $0.82 and for an aggregate purchase price
of $50,000,000, subject to pre-emptive rights held by holders of the Series D
Convertible Preferred Stock (other than QIP and SFM Domestic Investments, each
of which have waived such rights). The transactions contemplated by the Purchase
Agreement closed on June 15, 2006, and 60,772,594 shares of the Issuer's Common
Stock were issued to the New Investors and certain holders of the Series D
Convertible Preferred Stock who exercised the pre-emptive rights described
above. On June 15, 2006, in accordance with the terms of the Purchase Agreement,
QIP and SFM Domestic Investments converted (the "Conversion") all of the
outstanding shares of Series A, Series B, Series C, Series D, Series E and
Series F Convertible Preferred Stock of the Issuer (collectively, the "Preferred
Stock"), held by QIP and SFM Domestic Investments into shares of Common Stock.
On the same date the Issuer paid to QIP and SFM Domestic Investments, in cash,
the principal amount and all accrued interest on the Notes (as defined below)
and all of the accrued dividends, other than a portion of the accrued dividends
on the shares of Series D Convertible Preferred Stock. The Issuer paid, pursuant
to the terms of the Series D Convertible Preferred Stock, approximately $604,000
of accrued and unpaid dividends on the Series D Convertible Preferred Stock
through the issuance of 794,641 shares of Common Stock. "Notes" means,
collectively, the Issuer's Convertible Promissory Notes, dated July 16, 2003, in
the aggregate principal amount of $1,936,564 payable to the order of QIP and
$63,436 payable to the order of SFM Domestic Investments and the Convertible
Promissory Notes, dated October 17, 2003, in the aggregate principal amount of
$1,936,564 payable to the order of QIP and $63,436 payable to the order of SFM
Domestic Investments.
In the Purchase Agreement, each of QIP, SFM Domestic Investments and the
New Investors agreed to a standstill provision with the Issuer whereby QIP, SFM
Domestic Investments and the New Investors will not, without the prior approval
of a majority of the independent members of the Board of Directors of the Issuer
(the "Board of Directors"), directly or indirectly, (i) for a period of three
years from June 15, 2006 (the "Closing Date"), except as provided in the
Purchase Agreement, purchase or acquire, or agree to purchase or acquire, any
shares of capital stock of the Issuer; (ii) for a period of five years from the
Closing Date, except as provided in the Voting Agreement (as defined below) or
the Purchase Agreement, join a partnership, limited partnership, syndicate or
other group within the meaning of Section 13(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"), including a group consisting of other New
Investors for the purpose of acquiring, holding or voting any shares of capital
stock of the Issuer, or (iii) for a period of three years from the Closing Date,
except as provided in the Purchase Agreement seek to commence a proxy contest or
other proxy solicitation for the purposes of modifying the composition of the
Board of Directors.
CUSIP NO. 096227103 PAGE 11 OF 12 PAGES
In the Purchase Agreement, QIP, SFM Domestic Investments and the New
Investors have agreed that for a period of six months after the Closing Date,
they will not sell, offer to sell, solicit offers to buy, dispose of, loan,
pledge or grant any right with respect to, any shares of capital stock of the
Issuer (other than the lending of such shares held in brokerage accounts for
margin purposes). In addition, the Purchase Agreement provides that, for a
period of one year from the Closing Date, upon any financing of the Issuer of
its Common Stock, each of QIP, SFM Domestic Investments and the New Investors
will have a right of first refusal to purchase additional shares of Common
Stock, upon the terms and subject to the limitations set forth in the Purchase
Agreement.
On the Closing Date, QIP and SFM Domestic Investments entered into a Voting
Agreement (the "Voting Agreement") with the New Investors and the Issuer,
pursuant to which, subject to certain minimum ownership thresholds, (i) QIP and
SFM Domestic Investments have the right to designate three members of the Board
of Directors, (ii) each of the New Investors have the right to designate one
member of the Board of Directors, and (iii) each of the QIP, SFM Domestic
Investments and the New Investors agree to vote in favor of the election to the
Board of Directors the designees of the other parties to the Voting Agreement.
In addition, the Issuer agreed in the Voting Agreement to appoint certain of the
designees of QIP, SFM Domestic Investments and the New Investors on the Board of
Directors to certain committees of the Board of Directors. QIP, SFM Domestic
Investments and the New Investors also agreed in the Voting Agreement that, for
a period of 6 months after the Closing Date, they will not vote any shares of
capital stock of the Issuer owned by them in favor of any merger, consolidation,
sale, or other similar transaction involving the sale of any outstanding shares
of capital stock of the Issuer.
The foregoing descriptions of the Purchase Agreement and the Voting
Agreement do not purport to be complete and are qualified in their entirety by
the terms of each such document which were incorporated herein by reference to
Amendment No. 23 to the Initial Statement and which have been filed as exhibits
to the Issuer's Current Report on Form 8-K, filed with the Securities and
Exchange Commission on June 7, 2006.
As a result of the arrangements described above, including, but not limited
to the Voting Agreement, the Reporting Persons and the New Investors may be
deemed to comprise a "group" within the meaning of Section 13(d)(3) of the
Exchange Act, although neither the fact of this filing nor any of the
information contained herein shall be deemed to be an admission by any of the
Reporting Persons that a "group" exists.
For information on the New Investors please see such reports on Schedule
13D filed by the New Investors with the Securities and Exchange Commission on
June 15, 2006. The Reporting Persons take no responsibility for such filings or
the completeness or accuracy of any information contained therein.
Except as set forth herein, and as otherwise previously reported in the
Initial Statement as amended, the Reporting Persons do not have any contracts,
arrangements, understandings or relationships with respect to any securities of
the Issuer.
CUSIP NO. 096227103 PAGE 12 OF 12 PAGES
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Date: June 19, 2006 QUANTUM INDUSTRIAL PARTNERS LDC
By: /s/ JAY SCHOENFARBER
--------------------------------------------
Name: Jay Schoenfarber
Title: Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management LLC,
its General Partner
By: Soros Fund Management LLC,
its Managing Member
By: /s/ Jay Schoenfarber
-------------------------------------------
Name: Jay Schoenfarber
Title: Assistant General Counsel
QIH MANAGEMENT LLC
By: Soros Fund Management LLC,
its Managing Member
By: /s/ Jay Schoenfarber
--------------------------------------------
Name: Jay Schoenfarber
Title: Assistant General Counsel
SOROS FUND MANAGEMENT LLC
By: /s/ Jay Schoenfarber
------------------------------------------------
Name: Jay Schoenfarber
Title: Assistant General Counsel
SFM DOMESTIC INVESTMENTS LLC
By: /s/ Jay Schoenfarber
------------------------------------------------
Name: Jay Schoenfarber
Title: Attorney-in-Fact
GEORGE SOROS
By: /s/ Jay Schoenfarber
------------------------------------------------
Name: Jay Schoenfarber
Title: Attorney-in-Fact