SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person* LAVINE JONATHAN S (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111 HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip)	2. Date of Event Requiring Statement (Month/Day/Year) 05/06/2008	3. Issuer Name and Ticker or Trading Symbol Encompass Group Affiliates, Inc [ ECGA ]
		4. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) Other (specify below)	5. If Amendment, Date of Original Filed (Month/Day/Year)
			6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Series C Convertible Preferred Stock	05/06/2008	(1)	Common Stock	8,413,890,704(2)(3)(4)(5)	(2)	I	By entities named in footnotes(3)(4)(5)

1. Name and Address of Reporting Person* LAVINE JONATHAN S (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111 HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* SANKATY CREDIT MEMBER, LLC (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111, HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Sankaty Credit Opportunities Investors III, LLC (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111, HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* SANKATY CREDIT OPPORTUNITIES III LP (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111, HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Sankaty Credit Opportunities Investors II, LLC (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111, HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* SANKATY CREDIT OPPORTUNITIES II LP (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111 HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* PROSPECT HARBOR INVESTORS, LLC (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111, HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* PROSPECT HARBOR CREDIT PARTNERS LP (Last) (First) (Middle) C/O SANKATY ADVISORS, LLC 111, HUNTINGTON AVENUE (Street) BOSTON MA 02111 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. There is no expiration date applicable to the Series C Convertible Preferred Stock.

2. Subject to adjustment under certain circumstances, pursuant to the Series C Conversion Rate contemplated in the Certificate of Designation for the Series C Convertible Preferred Stock, the holders of the Series C Convertible Preferred Stock in the aggregate are entitled to receive shares of Common Stock equal to (a) 79.5% of the number of shares of Common Stock issued and outstanding on the date of conversion plus the total number of shares of Common Stock issuable upon conversion of all the shares of Series A-2 Preferred Stock and Series D Preferred Stock outstanding on the date of conversion; plus (b) any shares of Common Stock issued pursuant to the Issuer's convertible promissory notes on the date of conversion, divided by 1 minus .795; divided by 1,000.

3. The securities reported as indirectly beneficially owned by the Reporting Person are directly beneficially owned by (i) Sankaty Credit Opportunities III, L.P. (which securities may also be deemed to be indirectly beneficially owned by Sankaty Credit Opportunities Investors III, LLC, as general partner of Sankaty Credit Opportunities III, L.P.); (ii) Sankaty Credit Opportunities II, L.P. (which securities may also be deemed to be indirectly beneficially owned by Sankaty Credit Opportunities Investors II, LLC, as general partner of Sankaty Credit Opportunities II, L.P.); and (iii) Prospect Harbor Credit Partners, L.P. (which securities may also be deemed to be indirectly beneficially owned by Prospect Harbor Investors, LLC, as general partner of Prospect Harbor Credit Partners, L.P.).

4. The securities reported as indirectly beneficially owned by the Reporting Person may also be deemed to be indirectly beneficially owned by Sankaty Credit Member, LLC, as managing member of each of Sankaty Credit Opportunities Investors III, LLC, Sankaty Credit Opportunities Investors II, LLC and Prospect Harbor Investors, LLC. The Reporting Person is the managing member of Sankaty Credit Member, LLC. Pursuant to Instruction 5(b)(iv) of Form 3, each beneficial owner named herein has elected to report ownership of the entire number of securities owned by Sankaty Credit Opportunities III, L.P., Sankaty Credit Opportunities II, L.P. and Prospect Harbor Credit Partners, L.P., however each of them, including the Reporting Person, disclaims beneficial ownership of any securities, except to the extent of their pecuniary interest therein.

5. Includes 5,795,487,917 shares issuable upon conversion of Series C Convertible Preferred Stock held by Sankaty Credit Opportunities III, L.P., 1,739,151,208 shares issuable upon conversion of Series C Convertible Preferred Stock held by Sankaty Credit Opportunities II, L.P. and 879,251,579 shares issuable upon conversion of Series C Convertible Preferred Stock held by Prospect Harbor Credit Partners, L.P.

Remarks:

The Reporting Persons are 10% Owners of the Issuer when percentage ownership is calculated in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, which requires that calculations be made for a stockholder assuming that such stockholder has converted its convertible securities but that no other stockholder has converted its convertible securities. The Issuer in its filings has taken a different approach to calculating percentage ownership, assuming full conversion of all outstanding securities convertible into Common Stock, pursuant to which the Reporting Person is not a 10% Owner.

	/s/ Jonathan S. Lavine, individually and as managing member of Sankaty Credit Member, LLC, managing member of Sankaty Credit Opportunities Investors III, LLC, general partner of Sankaty Credit Opportunities III, L.P.	06/22/2010
	/s/ Jonathan S. Lavine, as managing member of Sankaty Credit Member, LLC, managing member of Sankaty Credit Opportunities Investors II, LLC, general partner of Sankaty Credit Opportunities II, L.P.	06/22/2010
	/s/ Jonathan S. Lavine, as managing member of Sankaty Credit Member, LLC, managing member of Prospect Harbor Investors, LLC, general partner of Prospect Harbor Credit Partners, L.P.	06/22/2010
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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