SCHEDULE 14A


                                 (RULE 14A-101)


                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION


           Proxy Statement Pursuant to Section 14(a) of the Securities
                      Exchange Act of 1934 (Amendment No.1)



Filed by the registrant [x]
Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement.       [ ] Confidential, for use of the
                                           Commission only (as permitted
                                           by Rule 14a-6(e)(2)).

[ ] Definitive proxy statement.

[x] Definitive additional materials.

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.


                         Allstate Financial Corporation
    ------------------------------------------------------------------------
              (Name of the Registrant as Specified In Its Charter)

    ------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)


Payment of filing fee (check the appropriate box):

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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:

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2. Aggregate number of securities to which transaction applies:

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3. Per unit price or other underlying value of transaction  computed pursuant to
Exchange  Act Rule  0-11  (Set  forth the  amount  on which  the  filing  fee is
calculated and state how it was determined):

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4. Proposed maximum aggregate value of transaction:

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5. Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange  Act Rule
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previously.  Identify the previous filing by registration  statement  number, or
the Form or Schedule and the date of its filing.

1.  Amount Previously Paid:

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4.  Date Filed:
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ALLSTATE FINANCIAL CORPORATION                                     NEWS
2700 S. Quincy Street, Suite 540, Arlington, VA 22206           RELEASE



FOR IMMEDIATE RELEASE

                                              Contact: Craig Fishman
                                                       President and
                                                       Chief Executive Officer
                                                       (703) 931-2274


                         ALLSTATE FINANCIAL CORPORATION
                  ANNOUNCES RULING IN PROXY CONTEST LITIGATION


     Arlington, Virginia - May 8, 1998 - Allstate Financial Corporation (NASDAQ:
ASFN)  announced  today that the United  States  District  Court for the Eastern
District of Virginia denied the Company's motion for partial summary judgment in
its suit  against  Value  Partners,  Ltd.  The Company  had sued Value  Partners
alleging,  among other  things,  that  318,050  shares of Allstate  common stock
acquired  in late 1995 and early 1996 were not  entitled  to be voted  under the
Virginia  Control Share  Acquisition  statute at the Company's  upcoming  annual
meeting of  shareholders  to be held on May 12, 1998.  The court  granted  Value
Partners' motion for partial summary judgment and held that the Virginia Control
Share Acquisition statute does not apply to Allstate.


     Craig Fishman,  President and Chief Executive  Officer of Allstate  stated:
"We are very disappointed in the Court's ruling. The annual meeting will proceed
as scheduled and all  shareholders  will have the  opportunity to choose between
the  slate  proposed  by our  Board  of  Directors  and that  proposed  by Value
Partners."


     Allstate Financial  Corporation provides funding to small- and medium-sized
companies by purchasing and monitoring portions of their accounts receivable and
by making asset-based loans secured by accounts receivable, inventory, equipment
and  other  assets.   Allstate  Factors,   a  division  of  Allstate   Financial
Corporation,  is engaged  in  traditional  non-recourse  factoring  of  accounts
receivable.


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