-----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, Pyx8UmZYx2qVG9RoFZCXOc68brTAeFUET5H5roQVPH3fWOsU3IPxxxWqTrgB6i2+ /PSPq3VXEYGjmWCMYKzypw== 0001047469-97-008743.txt : 19971224 0001047469-97-008743.hdr.sgml : 19971224 ACCESSION NUMBER: 0001047469-97-008743 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19971223 SROS: NYSE GROUP MEMBERS: R-H CAPITAL PARTNERS, L.P. GROUP MEMBERS: R-H CAPITAL, INC. GROUP MEMBERS: R-H/TRAVELERS, L.P. GROUP MEMBERS: SALOMON SMITH BARNEY HOLDINGS INC. GROUP MEMBERS: TRAVELERS GROUP INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SEARCH FINANCIAL SERVICES INC CENTRAL INDEX KEY: 0000318672 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 411356819 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-32463 FILM NUMBER: 97743704 BUSINESS ADDRESS: STREET 1: 600 N PEARL ST STREET 2: STE 2500 CITY: DALLAS STATE: TX ZIP: 75201-2899 BUSINESS PHONE: 2149656000 MAIL ADDRESS: STREET 1: 600 N PEARL STREET STREET 2: SUITE 2500 CITY: DALLAS STATE: TX ZIP: 75201-2899 FORMER COMPANY: FORMER CONFORMED NAME: SEARCH CAPITAL GROUP INC DATE OF NAME CHANGE: 19930910 FORMER COMPANY: FORMER CONFORMED NAME: SEARCH NATURAL RESOURCES INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS GROUP INC CENTRAL INDEX KEY: 0000831001 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 521568099 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 388 GREENWICH ST STREET 2: LEGAL DEPT 20TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2128168000 MAIL ADDRESS: STREET 1: 388 GREENWICH ST STREET 2: LEGAL DEPT 20TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10013 FORMER COMPANY: FORMER CONFORMED NAME: TRAVELERS INC DATE OF NAME CHANGE: 19940103 FORMER COMPANY: FORMER CONFORMED NAME: PRIMERICA CORP /NEW/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCIAL CREDIT GROUP INC DATE OF NAME CHANGE: 19890102 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* --------- SEARCH FINANCIAL SERVICES, INC. ------------------------------- (Name of Issuer) 9%/7% Convertible Preferred Stock, Par Value $.01 Per Share ----------------------------------------------------------- (Title of Class of Securities) 812209203 ------------- (CUSIP Number) Mr. Arthur C. Roselle R-H Capital Partners, L.P. 3333 Peachtree Road, N.E. Atlanta, Georgia 30326 (404) 266-6943 --------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 25, 1996 ----------------- (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(b)(3) or (4), check the following box / /. NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. (Continued on Following Pages) (Page 1 of 22 Pages) - ------------------- ------------------ CUSIP No. 812209203 13D Page 2 of 22 Pages - ------------------- ------------------ - ------------------------------------------------------------------------------- (1) NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) R-H Capital Partners, L.P. - ------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / / OF A GROUP* (b) / / - ------------------------------------------------------------------------------- (3) SEC USE ONLY - ------------------------------------------------------------------------------- (4) SOURCE OF FUNDS SC - ------------------------------------------------------------------------------- (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 Delaware - ------------------------------------------------------------------------------- (7) SOLE VOTING POWER 0 NUMBER OF -------------------------------------------------- SHARES (8) SHARED VOTING POWER 153,642 BENEFICIALLY OWNED BY -------------------------------------------------- EACH (9) SOLE DISPOSITIVE POWER 0 REPORTING PERSON WITH -------------------------------------------------- (10) SHARED DISPOSITIVE POWER 153,642 - ------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 153,642 - ------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - ------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3% - ------------------------------------------------------------------------------- (14) TYPE OF REPORTING PERSON* PN - ------------------------------------------------------------------------------- *SEE INSTRUCTION BEFORE FILLING OUT! (Page 2 of 22 Pages) - ------------------- ------------------ CUSIP No. 812209203 13D Page 3 of 22 Pages - ------------------- ------------------ - ------------------------------------------------------------------------------- (1) NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) R-H/Travelers, L.P. - ------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / / OF A GROUP* (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) /X/ - ------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- (7) SOLE VOTING POWER 0 NUMBER OF -------------------------------------------------- SHARES (8) SHARED VOTING POWER 153,642 BENEFICIALLY OWNED BY -------------------------------------------------- EACH (9) SOLE DISPOSITIVE POWER 0 REPORTING PERSON WITH -------------------------------------------------- (10) SHARED DISPOSITIVE POWER 153,642 - ------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 153,642 - ------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - ------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3% - ------------------------------------------------------------------------------- (14) TYPE OF REPORTING PERSON* PN - ------------------------------------------------------------------------------- *SEE INSTRUCTION BEFORE FILLING OUT! (Page 3 of 22 Pages) - ------------------- ------------------ CUSIP No. 812209203 13D Page 4 of 22 Pages - ------------------- ------------------ - ------------------------------------------------------------------------------- (1) NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) R-H Capital, Inc., 58-2179723 - ------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / / OF A GROUP* (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) /X/ - ------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- (7) SOLE VOTING POWER 0 NUMBER OF -------------------------------------------------- SHARES (8) SHARED VOTING POWER 153,642 BENEFICIALLY OWNED BY -------------------------------------------------- EACH (9) SOLE DISPOSITIVE POWER 0 REPORTING PERSON WITH -------------------------------------------------- (10) SHARED DISPOSITIVE POWER 153,642 - ------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 153,642 - ------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - ------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3% - ------------------------------------------------------------------------------- (14) TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------- *SEE INSTRUCTION BEFORE FILLING OUT! (Page 4 of 22 Pages) - ------------------- ------------------ CUSIP No. 812209203 13D Page 5 of 22 Pages - ------------------- ------------------ - ------------------------------------------------------------------------------- (1) NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Salomon Smith Barney Holdings Inc., 22-1660266 - ------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / / OF A GROUP* (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) /X/ - ------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- (7) SOLE VOTING POWER 0 NUMBER OF -------------------------------------------------- SHARES (8) SHARED VOTING POWER 153,681 BENEFICIALLY OWNED BY -------------------------------------------------- EACH (9) SOLE DISPOSITIVE POWER 0 REPORTING PERSON WITH -------------------------------------------------- (10) SHARED DISPOSITIVE POWER 153,681 - ------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 153,681 - ------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3% - ------------------------------------------------------------------------------- (14) TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------- *SEE INSTRUCTION BEFORE FILLING OUT! (Page 5 of 22 Pages) - ------------------- ------------------ CUSIP No. 812209203 13D Page 6 of 22 Pages - ------------------- ------------------ - ------------------------------------------------------------------------------- (1) NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Travelers Group Inc., 52-1568099 - ------------------------------------------------------------------------------- (2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / / OF A GROUP* (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) /X/ - ------------------------------------------------------------------------------- (6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- (7) SOLE VOTING POWER 0 NUMBER OF -------------------------------------------------- SHARES (8) SHARED VOTING POWER 153,681 BENEFICIALLY OWNED BY -------------------------------------------------- EACH (9) SOLE DISPOSITIVE POWER 0 REPORTING PERSON WITH -------------------------------------------------- (10) SHARED DISPOSITIVE POWER 153,681 - ------------------------------------------------------------------------------- (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 153,681 - ------------------------------------------------------------------------------- (12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ------------------------------------------------------------------------------- (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3% - ------------------------------------------------------------------------------- (14) TYPE OF REPORTING PERSON* CO HC - ------------------------------------------------------------------------------- *SEE INSTRUCTION BEFORE FILLING OUT! (Page 6 of 22 Pages) ITEM 1. SECURITY AND ISSUER The class of equity securities to which this statement relates is the 9%/7% convertible preferred stock, par value $.01 per share (the "Preferred Stock"), of Search Financial Services, Inc. (formerly known as Search Capital Group, Inc.), a Delaware corporation (the "Issuer"). The principal executive offices of the Issuer are located at 700 North Pearl Street, Suite 400, Dallas, Texas 75201. ITEM 2. IDENTITY AND BACKGROUND (a), (b), (c) and (f) This Statement on Schedule 13D is being filed by R-H Capital Partners, L.P., a Delaware limited partnership ("R-H Partners"), R-H/Travelers, L.P., a Delaware limited partnership ("R-H/Travelers"), R-H Capital, Inc., a Delaware corporation ("R-H Inc."), Salomon Smith Barney Holdings Inc. (formerly known as Salomon Inc), a Delaware corporation ("SSB Holdings"), and Travelers Group Inc., a Delaware corporation ("Travelers"). All of the Preferred Stock reported herein is directly beneficially owned by R-H Capital or in an account managed by Smith Barney Inc., a Delaware corporation and a wholly owned subsidiary of SSB Holdings. The general partner of R-H Partners is R-H/Travelers. The general partner of R-H/Travelers is R-H Inc. R-H Inc. is a wholly owned subsidiary of SSB Holdings, which is a wholly owned subsidiary of Travelers. The principal business of R-H Partners is acquiring, holding and disposing of securities and engaging in such activities in connection therewith as R-H/Travelers, as general partner, deems necessary, advisable or incidental to the foregoing. The principal business of R-H/Travelers is to act as a general partner of R-H Partners, and to engage in such activities in connection therewith as R-H Inc., as general partner, deems necessary, advisable or incidental to the foregoing. The principal business of R-H Inc. is to serve as general partner of R-H/Travelers and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. The principal business of SSB Holdings is the ownership of subsidiaries in the investment and asset management services and commodities businesses. Travelers is a diversified financial services company engaged, through its subsidiaries, in investment and asset management services, consumer finance services and life and property-casualty insurance services. The principal executive offices of R-H Partners, R-H/Travelers and R-H Inc. are located, and the principal business of each is conducted, at 3333 Peachtree Road, NE, Atlanta, Georgia 30326. The principal executive offices of SSB Holdings and Travelers are located, and the principal business of each is conducted, at 388 Greenwich Street, New York, New York 10013. R-H Partners, R-H/Travelers, R-H Inc., SSB Holdings and Travelers are referred to herein collectively as the "Reporting Persons." (Page 7 of 22 Pages) Certain information with respect to the directors and executive officers of R-H Inc. and Travelers is set forth on Exhibit 99.1 attached hereto, including each director's and executive officer's business address, present principal occupation or employment, citizenship and other information, which information is incorporated herein by reference. (d) and (e) On May 20, 1992, Salomon Brothers Inc ("SBI") and SSB Holdings, (together with SBI, "Salomon") consented, without admitting or denying any of the allegations of the concurrently filed complaint, to the entry of a Final Judgment of Permanent Injunction and Other Relief (the "Final Judgment") in settlement of an action arising out of alleged misconduct in auctions of U.S. Treasury securities and government securities trading, brought by the Securities and Exchange Commission (the "SEC") in the United States District Court for the Southern District of New York, entitled SECURITIES AND EXCHANGE COMMISSION V. SALOMON INC. AND SALOMON BROTHERS INC (92 Civ. 3691 and Securities and Exchange Act Release No. 30721 (May 20, 1992)) (the "Treasury Matter"). Among other things, the Final Judgment enjoins Salomon from violations of Section 17(a) of the Securities Act of 1933 (the "1933 Act"), Sections 10(b), 15(c)(1) and 17(a) of the Securities Exchange Act of 1934 (the "1934 Act"), and rules 10b-5, 15c1-2, 17a-3 and 17a-4 promulgated thereunder. Pursuant to the settlement, Salomon was required to pay a total amount of $290,000,000, with $100,000,000 going to a fund for the payment of private claims for compensatory damages arising out of the U.S. Treasury auction and related matters and $190,000,000 to the United States in payment of civil penalties under the Securities Enforcement Remedies and Penny Stock Reform Act of 1990 and a forfeiture of assets to and settlement of claims with the Department of Justice against SBI. On the same day, in other related actions solely involving SBI, the SEC instituted and settled an administrative proceeding relating to a failure to supervise the persons responsible for the alleged misconduct, the Federal Reserve Bank of New York announced the continuation of SBI's primary dealer designation but a cessation of its trading activity until August 3, 1992, and the Department of Treasury announced that SBI would be permitted to resume bidding for customers on August 3, 1992, having restricted SBI to purchasing securities for its own account in U.S. Treasury auctions since August 18, 1991. In January and February 1993, SBI, without admitting or denying any allegations, entered into consent agreements and, in some states, consent orders with 41 state securities regulators in settlement of certain claims in respect of SBI's state broker-dealer registrations arising out of SBI's activities described in the Treasury Matter. Pursuant to the settlement with the states, SBI agreed, among other things, to (i) comply with those provisions of the order issued by the SEC in the Treasury Matter that imposed remedial sanctions with respect to alleged violations of securities laws by former personnel of SBI in auctions for United States Treasury Securities during 1990 and 1991; (ii) pay $50,000 to each state participant in the settlement as reimbursement for costs of investigation related to the Treasury Matter; and (iii) (Page 8 of 22 Pages) with respect to some states, contribute $2,000,000 to a multi-state investor protection trust fund to be created for the purpose of providing funds for projects promoting the cause of investor protection. On July 17, 1996, the Department of Justice filed a civil complaint in the Southern District of New York alleging that SBI, Smith Barney Inc. and 22 other broker/dealers, as well as unnamed co-conspirators, violated section 1 of the Sherman Act in conjunction with the trading of Nasdaq securities. A proposed settlement with all 24 defendants was filed concurrently. The proposed settlement did not contain any admission of liability; it also did not include any fine, penalty or injunction. Under the proposed settlement, the defendants agreed, among other things, to institute specified antitrust compliance procedures on their over-the-counter desks, with the court retaining jurisdiction for enforcement of the settlement agreement, including punishment by contempt. In April 1997, the U.S. District Court for the Southern District of New York approved the settlement. In May 1997, the plaintiffs in a related civil class action challenged certain provisions of the settlement. On August 26, 1996, the SEC simultaneously instituted a cease-and-desist proceeding pursuant to Section 21C of the 1934 Act against SSB Holdings and accepted SSB Holdings's Offer of Settlement. SSB Holdings, by its Offer of Settlement, consented to the imposition of a cease-and-desist order and the entry of the findings therein without admitting or denying such findings. The SEC found that SSB Holdings had violated Section 13(b)(2) of the 1934 Act. Specifically, the SEC determined that SSB Holdings had failed to perform thorough and timely reconciliations of its balance sheet accounts to supporting documentation, and thus failed to identify on a timely basis erroneous entries made by its staff. Moreover, SSB Holdings had failed to ensure that correction procedures were properly implemented in London, in part by failing to train adequately its staff to use a new automated system. These failures resulted in the overstatement of assets and income on the books, records, and accounts of SSB Holdings and its subsidiaries. In determining to accept SSB Holdings's Offer of Settlement, the SEC considered remedial acts promptly undertaken by SSB Holdings and cooperation afforded the SEC staff. Except as set forth or incorporated by reference herein, during the last five years, none of Travelers, SSB Holdings, R-H Inc., R-H/Travelers, R-H Partners or, to the best knowledge of Travelers, any of the persons listed in Exhibit 99.1 hereto, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to any material judgment, decree or final order (Page 9 of 22 Pages) enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION R-H Partners purchased an aggregate of $2,750,000 principal amount of the 10.0% senior subordinated notes due October 16, 2000 of Dealers Alliance Credit Corp. (the "Notes") and warrants to purchase an aggregate of 12,369 shares of common stock of Dealers Alliance Credit Corp. (the "Warrants") on October 16, 1995 and December 21, 1995, for aggregate consideration of $2,750,000. On August 2, 1996, Dealers Alliance Credit Corp. entered into an Asset Acquisition Agreement (the "Asset Acquisition Agreement") with the Issuer and Search Funding IV, Inc. pursuant to which Dealers Alliance Credit Corp. sold substantially all of its assets to Search Funding IV, Inc., a wholly-owned subsidiary of the Issuer. In connection with the Asset Acquisition Agreement, R-H Partners entered into a Sub-Debt Acquisition Agreement, dated August 2, 1996, by and among the Issuer, R-H Partners, Kellett Investment Corporation and Search Funding IV, Inc. pursuant to which Search Funding IV, Inc. purchased the Notes and Warrants from R-H Partners. The aggregate purchase price paid to R-H Partners for the Notes and the Warrants was 1,229,141 shares of series B 9%/7% convertible preferred stock, of the issuer. Effective November 25, 1996, all outstanding shares of such B Series 9%/7% convertible preferred stock were converted into shares of Preferred Stock on a one-for-on basis. On November 21, 1996, the Issuer effected a one-for-eight reverse stock split of the Preferred Stock which had the effect of decreasing the number of shares owned by R-H Partners to 153,642 shares. ITEM 4. PURPOSE OF TRANSACTION The acquisition of the shares of Preferred Stock by R-H Capital occurred in connection with the sale of the assets of Dealers Alliance Credit Corp. Each of the Reporting Persons reviews its holdings with respect to the Issuer on a continuing basis. Depending on such evaluations of the Issuer's business and prospects, and upon future developments (including, but not limited to, market prices of the Preferred Stock and availability and alternative uses of funds, as well as conditions in the securities markets and general economic and industry conditions), each such Reporting Person may acquire other securities of the Issuer or sell all or a portion of its Preferred Stock or other securities of the issuer, now owned or hereafter acquired. Except as otherwise described herein, none of the Reporting Persons has any plans or proposals relating to or which would result in any of the transactions described in Items 4 (a)-(j) of Schedule 13D. (Page 10 of 22 Pages) ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) and (b) By reason of their relationship, R-H/Travelers, R-H Inc., SSB Holding and Travelers may be deemed to share voting and dispositive power with respect to shares of Preferred Stock directly owned by R-H Partners. SSB Holdings and Travelers may be deemed to have an indirect beneficial interest in the shares of Preferred Stock held in an account managed by Smith Barney Inc. As of November 28, 1997, R-H Partners, R-H Travelers and R-H Inc. may be deemed to beneficially own 153,642 shares of Preferred Stock, which represents 6.3% of the outstanding shares of Preferred Stock (based on 2,456,000 shares of Preferred Stock outstanding as of November 11, 1997, as reported by the Issuer). As of November 28, 1997, TRV and SSB Holdings may be deemed to beneficially own 153,681 shares of Preferred Stock, which represents 6.3% of the outstanding shares of Preferred Stock (based on 2,456,000 shares of Preferred Stock outstanding as of November 11, 1997, as reported by the Issuer). Except as set forth or incorporated by reference herein, none of Travelers, SSB Holdings, R-H Partners, R-H Travelers, R-H Inc. or, to the best knowledge of Travelers, the persons listed in Exhibit 99.1 hereto beneficially owned any Preferred Stock on November 28, 1997. (c) None of the Reporting Persons or, to the best knowledge of Travelers, the persons listed in Exhibit 99.1 hereto has effected a transaction other than as described herein in the Preferred Stock during the 60 days preceding November 28, 1997. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER In connection with the acquisition by R-H Partners of the shares of Preferred Stock, R-H Partners entered into the following agreements: (i) Sub-Debt Acquisition Agreement by and among the Issuer, Search Funding IV, Inc. and Kellett Investment Corporation dated as of August 2, 1996; (ii) Sub-Debt Shareholders Agreement by and between the Issuer, and Kellett Investment Corporation dated August, 1996; and (iii) Escrow Agreement by and among the Issuer, Dealers Alliance Credit Corp, Search Funding IV, Inc., Kellett Investment Corporation and U.S. Trust Company of Texas, N.A., as escrow agent. As of the date hereof, there are no outstanding rights or obligations under such agreements. Except as described in the preceding paragraph, none of the Reporting Persons is a party to any contract, arrangement, understanding or relationship with any person with respect to any securities of the Issuer, including but not limited to the transfer or voting of any shares of Preferred Stock, finders fees, joint ventures, option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. (Page 11 of 22 Pages) ITEM 7. MATERIAL TO BE FILED AS EXHIBITS THE FOLLOWING DOCUMENTS ARE ATTACHED AS EXHIBITS: Exhibit Description ------- ----------- 99.1 DIRECTORS AND EXECUTIVE OFFICERS 99.2 JOINT FILING AGREEMENT (PURSUANT TO RULE 13D-1(F)) (Page 12 of 22 Pages) SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. R-H CAPITAL PARTNERS, L.P. By: R-H/TRAVELERS, L.P. its general partner By: R-H CAPITAL, INC. its general partner DATED: December 22, 1997 By: /s/ Kenneth T. Millar ---------------------------- Kenneth T. Millar Executive Vice President and Managing Director R-H/TRAVELERS, L.P. By: R-H CAPITAL, INC. its general partner DATED: December 22, 1997 By: /s/ Kenneth T. Millar ---------------------------- Kenneth T. Millar Executive Vice President and Managing Director R-H CAPITAL, INC. DATED: December 22, 1997 By: /s/ Kenneth T. Millar ---------------------------- Kenneth T. Millar Executive Vice President and Managing Director (Page 13 of 22 Pages) DATED: December 22, 1997 SALOMON SMITH BARNEY HOLDINGS INC. By: /s/ Howard M. Darmstadter -------------------------------- Name: Howard M. Darmstadter Title: Assistant Secretary DATED: December 22, 1997 TRAVELERS GROUP INC. By: /s/ Stephanie B. Mudick -------------------------------- Name: Stephanie B. Mudick Title: Assistant Secretary (Page 14 of 22 Pages) EXHIBIT INDEX ------------- Exhibit Description Page ------- ----------- ---- 99.1 Directors and Executive Officers 99.2 Joint Filing Agreement (Pursuant to Rule 13d-1(f)) (Page 15 of 22 Pages) EX-99.1 2 DIRECTORS AND EXECUTIVE OFFICERS EXHIBIT 99.1 DIRECTORS AND EXECUTIVE OFFICERS Set forth below is the name, business address and present occupation or employment of each director and executive officer of the R-H Capital Inc. and Travelers Group Inc. EXECUTIVE OFFICERS AND DIRECTORS OF R-H CAPITAL, INC. ------------------------------------------------------ NAME, TITLE AND CITIZENSHIP PRINCIPAL OCCUPATION AND BUSINESS ADDRESS - --------------------------- ----------------------------------------- Jerome D. Sands Chairman Director (USA) The Robinson-Humphrey Company, Inc. 3333 Peachtree Rd., N.E. Atlanta, GA 30326 Roderick A. Dowling Managing Director Director and President (USA) The Robinson-Humphrey Company, Inc. 3333 Peachtree Rd., N.E. Atlanta, GA 30326 Kenneth T. Millar Managing Director Director, Executive Vice President The Robinson-Humphrey Company, Inc. and Managing Director (USA) 3333 Peachtree Rd., N.E. Atlanta, GA 30326 Arthur C. Roselle Vice President Vice President (USA) The Robinson-Humphrey Company, Inc. 3333 Peachtree Rd., N.E. Atlanta, GA 30326 David Prince General Counsel Secretary & Treasurer (USA) The Robinson-Humphrey Company, Inc. 3333 Peachtree Rd., N.E. Atlanta, GA 30326 (Page 16 of 22 Pages) EXECUTIVE OFFICERS AND DIRECTORS OF TRAVELERS GROUP INC. NAME, TITLE AND CITIZENSHIP PRINCIPAL OCCUPATION AND BUSINESS ADDRESS - --------------------------- ----------------------------------------- C. Michael Armstrong Chairman & Chief Executive Officer Director (USA) AT&T Corp. 295 North Maple Avenue Basking Ridge, New Jersey 07920 Judith Arron Executive Director Director (USA) Carnegie Hall Corporation 8811 Seventh Avenue New York, New York 10019 Kenneth J. Bialkin Partner Director (USA) Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, New York 10022 Edward H. Budd Retired Chairman Director (USA) Travelers Insurance Companies One Tower Square Hartford, Connecticut 06183 Joseph A. Califano, Jr. Chairman & Chief Executive Officer Director (USA) The Center on Addiction & Substance Abuse at Columbia University 152 West 57th Street New York, New York 10019 Douglas D. Danforth Executive Associates Director (USA) One PPG Place Suite 2210 Pittsburgh, Pennsylvania 15222 (Page 17 of 22 Pages) James Dimon President & Chief Operating Officer Director & Executive Officer (USA) Travelers Group Inc. 388 Greenwich Street New York, New York 10013 Leslie B. Disharoon Former Chairman, President & Chief Director (USA) Executive Officer Monumental Corporation 2 Chittenden Lane Owings Mills, Maryland 21117 The Honorable Gerald R. Ford Former President of the United States Director (USA) Post Office Box 927 Rancho Mirage, California 92270 Thomas W. Jones Vice Chairman Director & Executive Officer (USA) Travelers Group Inc. 388 Greenwich Street New York, New York 10013 Ann Dibble Jordan Consultant Director (USA) Former Director of Social Services, University of Chicago Medical Center 4610 Kenmore Drive, N.W. Washington, DC 20007 Robert I. Lipp Vice Chairman Director & Executive Officer (USA) Travelers Group Inc. 388 Greenwich Street New York, New York 10013 Michael T. Masin Vice Chairman & President - International Director (USA) GTE Corporation One Stamford Forum Stamford, Connecticut 06904 (Page 18 of 22 Pages) Deryck C. Maughan Vice Chairman Director (Great Britain) Travelers Group Inc. 388 Greenwich Street New York, New York 10013 Dudley C. Mecum Managing Director Director (USA) Capricorn Management 30 East Elm Street Greenwich, Connecticut 06830 Andrall E. Pearson Chairman & Chief Executive Officer Director (USA) Tricon Global Restaurants, Inc. 660 Steamboat Road Greenwich, Connecticut 06830 Frank J. Tasco Retired Chairman Director (USA) Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, New York 10036 Linda J. Wachner Chairman, President & Chief Director (USA) Executive Officer Warnaco Group Inc. 90 Park Avenue New York, New York 10016 Sanford I. Weill Chairman & Chief Executive Officer Director & Executive Officer (USA) Travelers Group Inc. 388 Greenwich Street New York, New York 10013 Joseph R. Wright, Jr. Chairman & Chief Executive Officer Director (USA) AMTEC, Inc. 599 Lexington Avenue New York, New York 10022-6030 (Page 19 of 22 Pages) Arthur Zankel Co-Managing Partner Director (USA) First Manhattan Company 437 Madison Avenue New York, New York 10022 Steven D. Black Vice Chairman & Chief Operating Officer Executive Officer (USA) Smith Barney Inc. 388 Greenwich Street New York, New York 10013 Michael A. Carpenter Executive Vice President Executive Officer (USA) Travelers Group Inc. One Tower Square Hartford, Connecticut 06183 Charles J. Clarke Chairman & Chief Executive Officer - Executive Officer (USA) Commercial Lines Travelers Property Casualty Corp. One Tower Square Hartford, Connecticut 06183 (Pages 20 of 22 Pages) EX-99.2 3 JOINT FILING AGREEMENT EXHIBIT 99.2 Joint Filing Agreement (Pursuant to Rule 13d-1(f)) In accordance with Rule 13d-1(f) promulgated under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including amendments thereto) with respect to the 9%/7% convertible preferred stock, par value $.01 per share, of Search Financial Services, Inc. and further agree that this Joint Filing Agreement be included as an exhibit to such joint filing. Each party to this Joint Filing Agreement expressly authorizes Arthur C. Roselle, Vice President of R-H Capital Inc. to file on such party's behalf any and all amendments to such statement. Each such party undertakes to notify Arthur C. Roselle, Vice President of R-H Capital Inc. of any changes giving rise to an obligation to file an amendment to Schedule 13D and it is understood that in connection with this Statement and all amendments thereto each such party shall be responsible only for information supplied by such party. In evidence thereof, the undersigned, being duly authorized, hereby execute this Agreement this day of December, 1997. R-H CAPITAL PARTNERS, L.P. By: R-H/TRAVELERS, L.P. its general partner By: R-H CAPITAL, INC. its general partner DATED: December 22, 1997 By: /s/ Kenneth T. Millar --------------------------------- Kenneth T. Millar Executive Vice President and Managing Director R-H/TRAVELERS, L.P. By: R-H CAPITAL, INC. its general partner DATED: December 22, 1997 By: /s/ Kenneth T. Millar --------------------------------- Kenneth T. Millar Executive Vice President and Managing Director (Page 21 of 22 Pages) R-H CAPITAL, INC. DATED: December 22, 1997 By: /s/ Kenneth T. Millar --------------------------------- Kenneth T. Millar Executive Vice President and Managing Director SALOMON SMITH BARNEY HOLDINGS INC. DATED: December 22, 1997 By: /s/ Howard M. Darmstadter --------------------------------- Name: Howard M. Darmstadter Title: Assistant Secretary TRAVELERS GROUP INC. DATED: December 22, 1997 By: /s/ Stephanie B. Mudick --------------------------------- Name: Stephanie B. Mudick Title: Assistant Secretary (Pages 22 of 22 Pages) -----END PRIVACY-ENHANCED MESSAGE-----