-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BeuLxpArUCmBfi/rIAgQvTlduCUhWAqhG76T9fGPZj4u10VF4KVAA3U7MNXTstdh j+JeZrFsBA/43DTWIQ20UQ== 0000950130-99-003592.txt : 19990615 0000950130-99-003592.hdr.sgml : 19990615 ACCESSION NUMBER: 0000950130-99-003592 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19990611 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE FINANCIAL SERVICES GROUP INC CENTRAL INDEX KEY: 0001024321 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 931223879 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49579 FILM NUMBER: 99644472 BUSINESS ADDRESS: STREET 1: 1776 SW MADISON ST CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032235600 MAIL ADDRESS: STREET 1: 1776 SW MADISON ST CITY: PROTLAND STATE: OR ZIP: 97205 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE REAL ESTATE INVESTMENT TRUST INC CENTRAL INDEX KEY: 0001048566 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 911851535 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O WILSHIRE FINANCIAL SERVICES GROUP IN STREET 2: 1776 SW MADISON STREET CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032235600 MAIL ADDRESS: STREET 1: C/O WILSHIRE FINANCIAL SERVICES GROUP IN STREET 2: 1776 SW MADISON STREET CITY: PORTLAND STATE: OR ZIP: 97205 SC 13D 1 SCHEDULE 13-D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Wilshire Financial Services Group Inc. ------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share ------------------------------------------------------------------- (Title of Class of Securities) 971867106 ------------------------------------------------------------------- (CUSIP Number) Wilshire Real Estate Investment Trust Inc. 1776 S.W. Madison Street Portland, Oregon 97205 (503) 223-5600 with a copy to: Daniel E. Titelbaum, Esq. Heller Ehrman White & McAuliffe 333 Bush Street San Francisco, California 94104 (415) 772-6000 ------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 10, 1999 ------------- (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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. (Continued on following pages) (Page 1 of 12 pages) SCHEDULE 13D
- ---------------------------- ------------------------------------ CUSIP No. 971867106 Page 2 of 12 Pages - ---------------------------- ------------------------------------ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Wilshire Real Estate Investment Trust Inc. EIN: 52-2081138 - ------------------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX, IF A MEMBER OF A GROUP* (a) [X] (b) [_] - ------------------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* OO - ------------------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) - ------------------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OR ORGANIZATION Maryland - ------------------------------------------------------------------------------------------ 7 SOLE VOTING POWER None -------------------------------------------------------------- NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED 2,874,791 -------------------------------------------------------------- BY EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH None -------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,874,791 - ------------------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,874,791 - ------------------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - ------------------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.35% - ------------------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D
CUSIP No. 971867106 Page 3 of 12 Pages - ---------------------------- ------------------------------------ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Wilshire Real Estate Partnership, L.P. EIN: 93-1236269 - ------------------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX, IF A MEMBER OF A GROUP* (a) [X] (b) [_] - ------------------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* OO - ------------------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS OR 2(d) OR 2(e) - ------------------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OR ORGANIZATION Delaware - ------------------------------------------------------------------------------------------ 7 SOLE VOTING POWER None ------------------------------------------------------------------------- NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED 2,874,791 --------------------------------------------------------------------- BY EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH None --------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,874,791 - ------------------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,874,791 - ------------------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - ------------------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.35% - ------------------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* PN - ------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. INTRODUCTION This Schedule 13D is filed by Wilshire Real Estate Investment Trust Inc., a corporation formed under the laws of the State of Maryland ("WREI"), and Wilshire Real Estate Partnership, L.P., a limited partnership formed under the laws of the State of Delaware ("WREP" and together with WREI, the "Reporting Persons"). Item 1. Security and Issuer Common Stock, par value $0.01 Wilshire Financial Services Group Inc. 1776 S.W. Madison Street Portland, Oregon 97205 Item 2. Identity and Background Name: Wilshire Real Estate Investment Trust Inc. State of Organization: Maryland Business: Diversified financial services company Address: 1776 S.W. Madison Street Portland, Oregon 97205 Criminal convictions: None. Civil proceedings: None. Name: Wilshire Real Estate Partnership, L.P. State of Organization: Delaware Business: Operating partnership of WREI Address: 1776 S.W. Madison Street Portland, Oregon 97205 Criminal convictions: None. Civil proceedings: None. WREI is the general partner and holder of 99.9% of the partnership interests of WREP. The name, address, present principal occupation and citizenship of each of the executive officers and members of the Board of Directors of WREI are set forth on Schedule 1 hereto. Item 3. Source and Amount of Funds or Other Consideration June 10, 1999 was the effective date of the Prepackaged Plan of Reorganization under Chapter 11 Title 11, United States Code, 11 U.S.C. (S)(S) 101 et seq. (the "Plan") of Wilshire Financial Services Group -- --- Inc.(as reorganized from and after the effective date of the Plan, the "Issuer"). At the effective date, the Reporting Persons acquired 2,874,791 shares (the "Shares") of the common stock, par value $.01 per share (the "New Common Stock") of the Issuer upon conversion, under the Plan, of a total of $21,408,333, in principal plus accrued but unpaid interest, of the Issuer's 13% Series B Notes due 2004, and a total of $8,486,755 in principal amount of unsecured intercompany receivables. Item 4. Purpose of Transaction The Reporting Persons acquired the Shares under and by virtue of the terms of the Plan. The Reporting Persons are presently evaluating what actions, if any, to take with respect to their holdings in the Issuer and have hired a financial advisor for that purpose. In particular, the Reporting Persons are evaluating whether to acquire more shares of New Common Stock of the Issuer, maintain their current holdings, or sell some or all of their current holdings of New Common Stock. In January, 1999 WREP, the Issuer and Wilshire Acquisitions Corporation, a Nevada corporation wholly-owned by the Issuer ("WAC") entered into an agreement under which WREP agreed to provide a $5,000,000 interim credit facility to the Issuer, bearing interest at a rate of 12% per year and maturing on February 29, 2004. The Issuer and the Reporting Persons entered into a letter agreement dated January 19, 1999 (the "Financing Agreement"), under which WREP agreed to provide a debtor-in-possession term credit facility (the "DIP Facility") in the aggregate principal amount of up to $10,000,000 to the Issuer, of which $5,000,000 has been funded and used by the Issuer to repay the interim credit facility referred to above. The DIP Facility is secured by liens on the capital stock of WAC held by the Issuer and the capital stock of First Bank of Beverly Hills, F.S.B., a federally-chartered savings institution wholly- owned by WAC ("First Bank"). The DIP Facility bears interest at a rate of 12% per year and matures on February 29, 2004. Additionally, under the Financing Agreement, on the effective date of the Plan WREI acquired $8,486,754 in principal amount of the Issuer's 6% Convertible PIK Notes due 2006 (the "New Notes") in exchange for obligations representing unsecured intercompany receivables owed by the Issuer to the Reporting Persons. WREI may elect to convert the New Notes into New Common Stock upon receipt of a notice of redemption of the New Notes by the Issuer. WREI has proposed to convert the New Notes and the $5,000,000 outstanding under the DIP Facility into New Common Stock as set forth in the letter to independent directors of WREI dated May 11, 1999, a copy of which is attached hereto as Exhibit 4(1). Pursuant to an Order by the Director of the Office of Thrift Supervision ("OTS") dated May 20, 1999, the Reporting Persons intend to file with the OTS, on or before June 19, 1999, a holding company application in connection with their acquisition of New Common Stock under the Plan. The Reporting Persons do not presently plan to rebut the presumption of control contained in 12 C.F.R. Section 574.4. Andrew A. Wiederhorn serves as Chairman of the Board and Chief Executive Officer of both the Issuer and the WREI. Lawrence A. Mendelsohn serves as a director and President of both the Issuer and WREI. Chris Tassos serves as Executive Vice President and Chief Financial Officer of both the Issuer and WREI. Bo G. Aberg serves as Senior Vice President, Europe of both the Issuer and WREI. Except as set forth above, the Reporting Persons do not presently have any plan or proposal to: (a) acquire additional securities of the Issuer, or dispose of securities of the Issuer; (b) conduct any extraordinary corporate transaction, such as a merger, reorganization or liquidation, with respect to the Issuer; (c) sell or transfer a material amount of the assets of the Issuer or of any of its subsidiaries; (d) change the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) make any material change in the present capitalization or dividend policy of the Issuer; (f) cause any other material change in the Issuer's business or corporate structure; (g) change the Issuer's charter, bylaws or instruments corresponding thereto or take other actions which may impede the acquisition of control of the Issuer by any person; (h) cause a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) cause a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) take any action similar to those enumerated above. Item 5. Interest in Securities of Issuer The aggregate number of securities and percentage of the class of securities of the Issuer beneficially owned by each Reporting Person named in Item 2, as well as the number of securities as to which such person is deemed to have sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or direct the disposition, is set forth in the following table:
Power to Vote Power to Dispose ------------- ---------------- No. of Percent of ------ ---------- Person Securities Sole Shared Sole Shared Class ------ ---------- ---- ------ ---- ------ ----- Beneficially ------------ Owned ----- Wilshire Real Estate 2,874,791 0 2,874,791 0 2,874,791 14.35% Investment Trust Inc. Wilshire Real Estate 2,874,791 0 2,874,791 0 2,874,791 14.35% Partnership, L.P. Andrew A. Wiederhorn 0 24,047 0 24,047 0 * Lawrence A. Mendelsohn 0 9,553 0 9,553 0 * Chris Tassos 0 62 0 62 0 * Bo G. Aberg 0 * 0 * 0 * David C. Egelhoff 0 * 0 * 0 * Jordan D. Schnitzer 0 0 0 0 0 0 Patrick Terrell 0 0 0 0 0 0
(a) The Reporting Persons acquired their shares of New Common Stock on June 10, 1999, the effective date of the Plan. The Issuer issued those shares directly to WREP. The transaction was effected in the State of Delaware. (b) Not applicable. (c) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer The Reporting Persons intend to work with a financial advisor to evaluate whether they should dispose of their currently owned shares of New Common Stock, maintain their current holdings, or acquire additional shares. Item 7. Material to Be Filed as Exhibits Exhibit 4(1): Letter to independent directors of WREI dated May 11, 1999. SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: June 10, 1999 Wilshire Real Estate Investment Trust Inc. By: /s/ Andrew A. Wiederhorn ------------------------- Andrew A. Wiederhorn Title: Chief Executive Officer Wilshire Real Estate Partnership, L.P. By: Wilshire Real Estate Investment Trust Inc. Its: General Partner By: /s/ Andrew A. Wiederhorn ------------------------- Andrew A. Wiederhorn Title: Chief Executive Officer List of Exhibits ---------------- Exhibit No. Description Page - ----------- ----------- ---- 4(1) Letter to independent directors of 11 WREI dated May 11, 1999. Schedule 1 ---------- Wilshire Real Estate Investment Trust Inc. Directors and Executive Officers - --------------------------------
Present Principal Principal Business and ----------------- ---------------------- Name and Address Title Occupation Address - ---------------- ----- ---------- ------- Andrew A. Wiederhorn Chairman and Director and c/o WREI Chief Executive Officer of WREI 1776 S.W. Madison Street Officer, Treasurer Portland, OR 97205 and Secretary Lawrence A. Mendelsohn Director and Director and c/o WREI President Officer of WREI 1776 S.W. Madison Street Portland, OR 97205 David C. Egelhoff Director President, c/o WREI Macadam Forbes, 1776 S.W. Madison Street Inc. Portland, OR 97205 Jordan D. Schnitzer Director President, Jordan c/o WREI Schnitzer Properties 1776 S.W. Madison Street Portland, OR 97205 President, Harsch Investment Properties, LLC Patrick Terrell Director Director, B.S. c/o WREI Medical, United 1776 S.W. Madison Street Soil Recycling, Portland, OR 97205 Microwave, Inc., and Lakeside Associates Chris Tassos Executive Vice Officer of WREI c/o WREI President and 1776 S.W. Madison Street Chief Financial Portland, OR 97205 Officer Bo G. Aberg Senior Vice Officer of WREI c/o WREI President, Europe 1776 S.W. Madison Street Portland, OR 97205
EX-4.1 2 LETTER TO INDEPENDENT DIRECTORS OF WREI DTD 5/11 Exhibit 4(1) [WREI Letterhead] May 11, 1999 Ms. Elizabeth F. Aaroe Mr. Edward Foehl Principal Systran Financial Services Corporation Fisher Consulting, LLC 10220 SW Greenberg Road, Suite 551 8181 SW Edgewater, West Portland, OR 97223 Wilsonville, OR 97070 Mr. Robert Deutschman Mr. Daniel A. Markee Cappello Group, Inc. Senior Vice President 1299 Ocean Avenue, Suite 306 LendSource, Inc. Santa Monica, CA 90401 566 Prairie Center Drive, Suite 201 Eden Prairie, MN 55344 Mr. Larry B. Faigin President GreenPark Group, LLC 3030 Old Ranch Parkway, Suite 450 Seal Beach, CA 90740 Elizabeth and Gentlemen, As you know, Wilshire Real Estate Investment Trust Inc. and its subsidiary Wilshire Real Estate Partnership L.P. (together "WREI") are the third-largest shareholder post-Effective Date in Wilshire Financial Services Group Inc. ("WFSG"). WREI also has a $5 million DIP loan secured by the stock of First Bank of Beverly Hills, F.S.B. (the "Bank") and approximately $8.55 million 6% seven-year PIK note due from WFSG. WREI, in an effort to assist in increasing the value of WFSG, would like you to consider the following proposal: 1) WREI would convert its $5 million DIP facility into new common stock of WFSG at a rate equivalent to 70% of post-Effective Date book value per share of WFSG. 2) WREI would convert its approximately $8.55 million 6% seven-year PIK note, which WREI currently carries at a 13% discount rate or approximately $5.7 million into new common stock of WFSG at 70% of post- Effective Date book value per share of WFSG. WREI proposes that the dollar amount of PIK note to be converted would be its current carrying value rather than its face value. Ms. Elizabeth F. Aaroe Mr. Robert Deutschman Mr. Larry B. Faigin Mr. Edward Foehl Mr. Daniel A. Markee May 11, 1999 Page 2 Currently WFSG pays 12% interest on the $5 million DIP loan or approximately $600,000 per year. WFSG has already paid to WREI the March, April, and May interest payments on the DIP loan and the next payment is due June 1. WFSG will also be paying (or PIKing) approximately $500,000 of interest per year on the PIK note. Given WFSG's restructuring and cash-tight position, WREI would rather see WFSG conserve or invest its cash instead of paying interest to WREI. If WREI were to convert these two liabilities to equity, WFSG would significantly reduce its interest burden and have a larger equity capital base. Additionally, WFSG would free up its pledged shares of the Bank with which it could potentially raise funds in the future independently of WREI. This conversion of the notes (DIP and PIK) would also help further eliminate the perceived ongoing affiliate transactions problem between our companies, which seems to plague our respective stock prices. The independent directors of WREI would like to discuss this matter further with a representative of the prospective independent directors of WFSG at your earliest convenience. I have been appointed as the representative for WREI. I will have Andy arrange some potential meeting dates for us to discuss this proposal. Very truly yours, /s/ Patrick Terrell Patrick Terrell Director cc: Andrew Wiederhorn Lawrence Mendelsohn Jonathan Cleveland David Egelhoff Jordan Schnitzer James Waggoner Mark Peterman Bennett Murphy -----END PRIVACY-ENHANCED MESSAGE-----