<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULES 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(AMENDMENT NO. 2)(1)
NATIONAL AUTO CREDIT, INC
(NAME OF ISSUER)
Common Stock, $.05 par value
(TITLE OF CLASS OF SECURITIES)
632900 10 6
(CUSIP NUMBER)
Judith A. Boyle, 2525 East Camelback Road, Ste. 1150, Phoenix AZ, 85016
602-522-3200
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
November 13, 1998
(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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [X]
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
(1) 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 the disclosures provided in a prior cover page.
The information required in 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).
Page 1
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SCHEDULE 13D, AMENDMENT NO. 2
CUSIP NO. 632900 10 6
- --------------------------------------------------------------------------------
1 Names of Reporting Persons
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Ernest C. Garcia II
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
(b)/ /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) /X/
(See Item 2)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,630,630 (Item 5)
----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 104,000 (Item 5)
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,630,630 (Item 5)
----------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
104,000 (Item 5)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,734,630 (Item 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.6% (Item 5)
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14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*See Instructions Before Filling Out Page 2
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SCHEDULE 13D, AMENDMENT NO. 2
CUSIP NO. 632900 10 6
- --------------------------------------------------------------------------------
1 Names of Reporting Persons
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
VERDE INVESTMENTS, INC.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
(b)/ /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) /X/
(See Item 2)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Arizona
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NUMBER OF 7 SOLE VOTING POWER
SHARES
----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 104,000 (Item 5)
----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
----------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
104,000 (Item 5)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
104,000 (Item 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.4% (Item 5)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*See Instructions Before Filling Out Page 2
<PAGE> 4
CUSIP NO. 632900 10 6 13D, Amendment No. 2
Item 1 SECURITY AND ISSUER.
TITLE OF CLASS OF SECURITIES: Common Stock, $.05 par value ("Common
Stock")
ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES: NATIONAL AUTO CREDIT,
INC. ("NAC")
30000 Aurora Road
Solon, OH 44139
Item 2 IDENTITY AND BACKGROUND.
(a) NAME OF PERSON FILING:
A. Reporting Person - 1 -- Ernest C. Garcia II ("Reporting Person-1")
B. Reporting Person - 2 -- Verde Investments, Inc. ("Reporting
Person-2") (collectively, "Reporting Persons").
This Schedule 13D, Amendment No. 2 ("Amendment No.2") is jointly filed
by the Reporting Persons pursuant to Rule 13d-(1)(f) promulgated by the
Securities and Exchange Commission ("SEC") under Section 13 of the
Securities Exchange Act of 1934, as amended (the "Act"): (i) Reporting
Person - 1, by virtue of his direct beneficial ownership of Common
Stock of NAC; (ii) Reporting Person - 1, by virtue of his indirect
beneficial ownership of Common Stock via his sole ownership of all of
the common stock of Reporting Person - 2, and (iii) Reporting
Person - 2, by virtue of its direct beneficial ownership of Common
Stock of NAC.
Information with respect to each of the Reporting Persons is given
solely by such Reporting Person, and no Reporting Person assumes
responsibility for the accuracy or completeness of information by
another Reporting Person. By their signature on this Amendment No. 2,
each of the Reporting Persons agrees that this Amendment No. 2 is filed
on behalf of such Reporting Person.
Certain information required by this Item 2 concerning the directors
and executive officers of Reporting Person - 2 is set forth on Schedule
1 attached hereto, which is incorporated herein by reference.
The Reporting Persons may be deemed to constitute a "group" for
purposes of Section 13(d)(3) of the Act. The Reporting Persons
expressly disclaim that they have agreed to act as a group other than
as described in this Amendment No. 2.
(b) ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE, RESIDENCE: For
Reporting Persons -- 2525 East Camelback Road, Suite 1150
Phoenix, Arizona 85016.
Also, see Schedule 1 attached hereto.
(c) PRINCIPAL OCCUPATION OR EMPLOYMENT AND THE NAME, PRINCIPAL BUSINESS
AND ADDRESS OF CORPORATION IN WHICH EMPLOYMENT IS CONDUCTED:
A. For Reporting Person - 1 -- Chairman and Chief Executive Officer of
Ugly Duckling Corporation, used automobile retail sales and finance
company, 2525 E. Camelback Rd, Suite 500, Phoenix, AZ 85016; (2)
Chairman, Chief Executive Officer and President of Cygnet Financial
Corporation ("Cygnet"), providing various financial services primarily
to the sub-prime segment of the automobile finance industry; (3)
President, sole director and sole shareholder of Verde Investments,
Inc./ Reporting Person-2, an investment company involved in real estate
and other types of investments.
B. For Reporting Person - 2 -- See Information set forth under this
Item 2. Also, see Schedule 1 attached hereto. Cygnet's and Reporting
Person-2's addresses for their principal businesses and principal
offices are the same as the address provided under Item 2(b).
(d) WHETHER DURING LAST FIVE YEARS, SUCH PERSON CONVICTED IN A CRIMINAL
PROCEEDING (EXCLUDING TRAFFIC VIOLATIONS OR SIMILAR MISDEMEANORS) AND,
IF SO, GIVE THE DATES, NATURE OF CONVICTION, NAME AND LOCATION OF
COURT, ANY PENALTY IMPOSED, OR OTHER DISPOSITION OF THE CASE: During
the past five years, none of the Reporting Persons nor, to the best
knowledge of such persons, any of the persons named in Schedule 1 to
this Amendment No. 2, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors). However, see
the following summary, which pertains solely as to Reporting Person - 1
-- Prior to 1992 Reporting Person-1 was involved in various real
estate, securities, and banking ventures. Arising out of two
transactions in 1987 between Lincoln Savings and Loan Association
("Lincoln") and entities controlled by the Reporting Person, the
Resolution Trust Corporation ("RTC"), which ultimately took over
Lincoln, asserted that Lincoln improperly accounted for the
transactions and that Reporting Person-1's participation in the
transactions facilitated the improper accounting. Facing severe
financial pressures, Reporting Person-1 agreed to plead guilty to one
count of bank fraud, but in light of his cooperation with authorities
both before and after he was charged, was sentenced to only three years
probation, which has expired, was fined $50 (the minimum fine the court
could assess), and during the period of his probation, which ended in
1996, was banned from becoming an officer, director or employee of any
federally-insured financial institution or a securities firm without
governmental approval. In separate actions arising out of this matter,
Reporting Person-1 agreed not to violate the securities laws, and filed
for bankruptcy both personally and with respect to certain entities he
controlled. The bankruptcies were discharged by 1993.
(e) WHETHER DURING THE LAST FIVE YEARS, SUCH PERSON WAS 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 A
JUDGMENT, DECREE OR FINAL ORDER ENJOINING FUTURE VIOLATIONS OF, OR
PROHIBITING OR MANDATING ACTIVITIES SUBJECT TO, FEDERAL OR STATE
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CUSIP NO. 632900 10 6 13D, Amendment No. 2
SECURITIES LAWS OR FINDING ANY VIOLATION WITH RESPECT TO SUCH LAWS;
AND, IF SO, IDENTIFY AND DESCRIBE SUCH PROCEEDINGS AND SUMMARIZE THE
TERMS OF SUCH JUDGMENT, DECREE OR FINAL ORDER: During the past five
years, none of the Reporting Persons nor, to the best knowledge of such
persons, any of the persons named in Schedule 1 to this Amendment No.
2, was a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which such person was or
is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to, federal
or state securities laws or finding any violation with respect to such
laws. However, for Reporting Person-1 see the summary under Item 2(e),
above.
(f) CITIZENSHIP: Reporting Person-1 United States of America; and
Reporting Person-2 Arizona. Also, see Schedule 1 attached hereto.
Item 3 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
To date, personal funds (Reporting Person-1) and working capital funds
(Reporting Person-2) have been used to purchase NAC securities at an
approximate total cost of $3,135,065 ($3,015,305 and $119,760 of
purchases by Reporting Person-1 and Reporting Person-2, respectively).
Included in the preceding totals is a total of $283,065 of purchases of
NAC securities by the Reporting Persons generally between the October
28, 1998 effective date filing of Schedule 13D, Amendment No. 1 and the
filing of this Schedule 13D, Amendment No. 2 ("Amendment No. 2")
("Interim Purchases"). Reporting Person-1 made Interim Purchases
totaling $163,305 and Reporting Person-2 made Interim Purchases totaling
$119,760. These Interim Purchases are set forth in more detail under
Item 5(c) of this Amendment No. 2. No borrowings or other types of
consideration other than cash has been used to date for these purchases.
If and when future purchases of NAC securities are made, the Reporting
Persons may use a variety of sources of funds; however, the Reporting
Persons have no present plan, arrangement, or understanding in
connection with sources of funds for future purchases of the securities.
Item 4 PURPOSE OF TRANSACTION.
The Reporting Persons' purposes for the acquisitions of the NAC
securities may include, without limitation, plans or proposals such as
the following: (1) dispositions of the NAC securities through sales,
transfers and other means of disposing of the securities; (2) sale or
transfer of assets of NAC or any of its subsidiaries; (3) a change in
the present board of directors or management of NAC; (4) change in the
capitalization of NAC; (5) changes in NAC's charter, bylaws or other
corporate documents and instruments; (6) causing a class of securities
of NAC to be delisted or not traded on an exchange, system or
association; (7) causing a class of securities of NAC to become
eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended; (8) a corporate
transaction, such as a merger, reorganization or liquidation involving
NAC or any of its subsidiaries; (9) a joint venture, partnership or
management arrangement impacting NAC, or any of its subsidiaries and/or
affiliate entities or persons; (10) acquisitions of additional
securities of NAC; (11) other changes in NAC's business or corporate
structure; and (12) other actions similar to any of those listed above.
Item 5 INTEREST IN SECURITIES OF THE ISSUER.
(a) AGGREGATE NUMBER AND PERCENTAGE OF SECURITIES BENEFICIALLY OWNED:
(1) Aggregate number - 2,734,630(total); and (2) percent of class of
securities - 9.6%(total)(1). Reporting Person-1 is the direct
beneficial owner of 2,630,630 shares of Common Stock, and the indirect
beneficial owner of 104,000 shares of Common Stock owned by Reporting
Person-2 (see Item 2), together representing the approximate 9.6% and
2,734,630 shares of NAC Common Stock. Except for the 2,630,630 shares
of Common Stock owned directly by Reporting Person -1, Reporting
Person -1 disclaims beneficial ownership of all shares of Common Stock
held by Reporting Person-2.
By virtue of the relationship between Reporting Person-1 and
Reporting Person-2 described in Item 2, Reporting Person-1 may be
deemed to possess indirect beneficial ownership of the shares of Common
Stock beneficially owned by Reporting Person-2. The filing of this
Amendment No. 2 by Reporting Person-1 and Reporting Person-2 shall
not be construed as an admission that either Reporting Person-1 or
Reporting Person-2 is, for the purpose of Section 13(d) or 13(g) of
the Act, the beneficial owner of any securities covered by this
Amendment No. 2.
Reporting Person-2 is the direct beneficial owner of 104,000 shares
of Common Stock, representing .4% of NAC's Common Stock.
(b) NUMBER OF SHARES AS TO WHICH SUCH PERSON HAS:
Reporting Person-1 has the sole power to vote or direct the vote of
the 2,630,630 shares of Common Stock beneficially owned by Reporting
Person-1. By virtue of his relationship to Reporting Person-2 (see
Item 2), Reporting Person-1 may be deemed to indirectly share the
power to vote or direct the vote of 104,000 shares of Common Stock
owned directly by Reporting Person-2. Reporting Person-1 disclaims
beneficial ownership of all shares of Common Stock held by Reporting
Person-2.
Reporting Person-2 has the sole power to dispose of or direct the
disposition of the 104,000 shares of Common Stock beneficially owned by
Reporting Person-2. By virtue of the relationship between Reporting
Person-1 and Reporting Person-2 (see above and Item 2), Reporting
Person-2 may be deemed to share with Reporting Person-1 the power to
dispose of or direct the disposition of 104,000 shares of Common Stock.
- --------
(1) Ownership percentage of Common Stock is based upon the common shares
outstanding per the Issuer's October 31, 1997 Form 10-Q (28,547,944 shares
of Common Stock outstanding at November 28, 1997). The Reporting Persons
believe this is the most current public document on file with the SEC (the
Issuer has filed a Form 12B-25 to extend the filing of its Form 10-K for the
fiscal year ended January 31, 1998).
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CUSIP NO. 632900 10 6 13D, AMENDMENT No. 2
(c) TRANSACTIONS IN THE CLASS OF SECURITIES REPORTED ON THAT WERE
EFFECTED DURING THE PAST 60 DAYS OR GENERALLY SINCE THE MOST RECENT
FILING ON SCHEDULE 13D, WHICHEVER IS LESS (2).
<TABLE>
<CAPTION>
REPORTING PERSON DATE OF AMOUNT OF PRICE PER HOW TRANSACTION
TRANSACTION SECURITIES SHARE ($) WAS EFFECTED
PURCHASED (#)
---------------- ----------- ------------- ---------- -----------------
<S> <C> <C> <C> <C>
Mr. Garcia 11/6/98 100,000 1.045 Through a private
transaction, purchase
via a broker
Mr. Garcia 10/20/98 2,000 1.1 Through a private
transaction, purchase
via E-Trade
Mr. Garcia 10/20/98 1,500 1.05 Through a private
transaction, purchase
via E-Trade
Mr. Garcia 10/20/98 3,000 1.125 Through a private
transaction, purchase
via E-Trade
Mr. Garcia 10/20/98 3,500 1.25 Through a private
transaction, purchase
via E-Trade
Mr. Garcia 11/11/98 13,500 1.25 Through a private
transaction, purchase
via E-Trade
Mr. Garcia 11/12/98 19,500 1.15 Through a private
transaction, purchase
via E-Trade
Mr. Garcia 11/12/98 7,000 1.14 Through a private
-------- ------ ---- transaction, purchase
via E-Trade
Subtotal - Mr. Garcia 150,000
=======
Verde 11/11/98 21,000 1.11 Through a private
transaction, purchase
via E-Trade
Verde 11/11/98 19,000 1.15 Through a private
transaction, purchase
via E-Trade
Verde 11/11/98 10,000 1.08 Through a private
transaction, purchase
via E-Trade
Verde 11/12/98 25,000 1.16 Through a private
transaction, purchase
via E-Trade
Verde 11/13/98 29,000 1.20 Through a private
-------- ------ ---- transaction, purchase
via E-Trade
Subtotal - Verde 104,000
-------
TOTAL - Mr. Garcia & Verde 254,000
===== =======
</TABLE>
The total number of shares of Interim Purchases represent less than 1% of NAC's
shares of Common Stock outstanding(2).
(d) None, not applicable.
(e) Not applicable.
Item 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
None, to the best knowledge of the Reporting Persons.
Item 7 MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99.1 Agreement Re Joint Filing of
Schedule 13D, Amendment No. 2
- --------------
(2) The most recent Schedule 13D Amendment No.1, was filed with the SEC
effective October 28, 1998 ("Amendment No. 1"). Amendment No. 1 described
transactions by the Reporting Persons in NAC securities as of the filing
date. This Schedule 13D, Amendment No. 2 describes transactions by the
Reporting Persons in NAC securities that occurred subsequent to the filing
of Amendment No. 1.
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CUSIP NO. 632900 10 6 13D, AMENDMENT NO. 2
SIGNATURE:
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
November 20, 1998 November 20, 1998
----------------- -----------------
(Date) (Date)
ERNEST C. GARCIA II VERDE INVESTMENTS, INC.
By: /S/ ERNEST C. GARCIA II By: /S/ ERNEST C. GARCIA II
----------------------- -----------------------
ERNEST C. GARCIA II
Its: As An Individual Its: President
----------------------- -----------------------
(Title) (Title)
Page 6
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Schedule 1 to
Schedule 13D, Amendment No. 2
=============================
CUSIP No. 632900 10 6
Reporting Person - 2/Verde Investments, Inc.
Re: Item 2 of Schedule 13D, Amendment No. 2
- -------------------------------------------
Executive Officers and
Directors Information for Reporting Person - 2
-----------------------------------------------
Name(1) Position w/Reporting Person-2
- ----- -----------------------------
Ernest C. Garcia II Director, President
& Sole Shareholder
Steven P. Johnson(2) Vice President/
General Counsel/
Secretary
Randall Andrus Vice President/
Real Estate
Nancy V. Young Treasurer
(1) Each person's is a citizen of the United States. Each persons principal
office and principal business address is the same as that listed under
Item 2(b) of Amendment No.2.
(2) In addition to the listed positions, Mr. Johnson is the Senior Vice
President and General Counsel of both Ugly Duckling Corporation and Cygnet
Financial Corporation. These companies and businesses are described within
Item 2 of Amendment No.2.
<PAGE> 9
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
99.1 Agreement Re Joint Filing of Schedule 13D,
Amendment No. 2
<PAGE> 1
Exhibit 99.1
AGREEMENT RE JOINT FILING OF
SCHEDULE 13D, AMENDMENT No. 2
The undersigned hereby agrees:
(i) Each of them is individually eligible to use the Schedule 13D,
Amendment No. 2 ("Amendment No. 2") to which this Exhibit is attached, and such
Amendment No. 2 is filed on behalf of each of them; and
(ii) Each of them is responsible for the timely filing of such
Amendment No. 2 and any further amendments thereto, and for the completeness and
accuracy of the information concerning such person contained therein; but none
of them is responsible for the completeness or accuracy of the information
concerning the other persons making the filing, unless such person knows or has
reason to believe that such information is inaccurate.
Dated: November 20, 1998
ERNEST C. GARCIA II
By: /s/ ERNEST C. GARCIA II
-------------------------------
Its: As An Individual
VERDE INVESTMENTS, INC.
By: /s/ ERNEST C. GARCIA II
-------------------------------
ERNEST C. GARCIA II
Its: President
