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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
September 1, 1999
(Date of Report - Date of Earliest Event Reported)
NATIONAL AUTO CREDIT, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-11601 34-1816760
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File No.) Identification No.)
30000 AURORA ROAD, SOLON, OHIO 44139
(Address of Principal Executive Offices and Zip Code)
(440) 349-1000
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former name or former address, if changed from last report)
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ITEM 5. OTHER EVENTS.
On September 1, 1999, the Company issued the following press release:
NATIONAL AUTO CREDIT TO PROTECT CORPORATE ASSETS
AND PUBLIC STOCKHOLDERS IN RESPONSE TO MAJORITY STOCKHOLDER EFFORT TO SEIZE
CONTROL
SOLON, Ohio, Sept. 1/PRNewswire/ -- National Auto Credit, Inc. (OTC
Bulletin Board: NAKD) announced today that on August 30, 1999, Sam J.
Frankino, the majority stockholder and former chairman of the company, filed
his written consent as a stockholder, which purports to amend the company's
bylaws to expand the number of directors constituting the board from six to
thirteen and to appoint Peter Zackaroff, David Huber, Philip Sauder, Lorraine
Dodero, Terry Sweitzer, Donald Jasensky and William Maund to the company's
board, effective immediately.
Mr. Zackaroff was the company's executive vice president, general
counsel and secretary from 1988 through 1994. Ms. Dodero is Mr. Frankino's
daughter. Mr. Frankino also nominated himself, William Dodero, Mr. Zackaroff
and Mr. Huber for election to the board at the company's 1999 annual meeting,
now set for September 15, 1999. Mr. Dodero is Mr. Frankino's son-in-law.
Mr. Frankino also filed an action against the company and six present
directors in the Chancery Court for the State of Delaware. In the action, Mr.
Frankino seeks to invalidate the company's existing bylaw not permitting
stockholders to act by written consent; confirm the validity of the bylaw
change purportedly made pursuant to the consent to raise the number of
directors to thirteen; confirm the election to the board of Mr. Frankino's
designees; and award attorney's fees and costs. The Court was also asked to
enter an interim order restricting or prohibiting various corporate
transactions not in the ordinary course of business pending a final
determination of the case on the merits.
The company believes that Mr. Frankino's consent is invalid and
without effect. The company also stated that it intends to vigorously defend
the action, with the objective of protecting the interests of all
stockholders.
Furthermore, the company expressed grave concerns over yet another
attempt by Mr. Frankino and his affiliates to reinstate themselves, seize
control and dominate the affairs and operations of the company, especially in
light of the troubling events that occurred while Mr. Frankino previously
headed management at the company.
As previously reported, the company's prior independent auditors
resigned in early 1998 because, in their view, they could no longer rely on
the representations of the then management of the company, which was led by
Mr. Frankino. In the company's recently issued fiscal 1999 annual report, the
company stated that its previously issued fiscal 1995, 1996 and 1997 financial
statements required restatement (reflecting, among other things, a $91.7
million net loss in fiscal 1998). The restatements were required to correct
accounting that resulted from the failure to properly consider information
available at the time those financial statements were prepared, including
information
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that may not have been considered due to certain errors or irregularities in
certain accounting or corporate records.
The company continues to cooperate with the SEC and the FBI in
connection with their respective on going investigations of the company and
former employees, and maintains dialogue with the plaintiffs in the
stockholder lawsuit arising out of events occurring during Mr. Frankino's
tenure.
The board of directors of the company highlighted that over the last
eighteen months since Mr. Frankino resigned, the company's financial
statements and accounting records have been put in order, and significant
steps have been made toward rebuilding trust and stockholder value, as well as
positioning the company for future growth. This latest attempt by Mr. Frankino
to seize control necessitates further action to protect the company's assets
and the public stockholders.
National Auto Credit, Inc. is a specialized financial services
company that invests primarily in sub-prime, used-automobile consumer loans,
which take the form of installment loans collateralized by the related
vehicle. The company, through its affiliate, NAC, Inc., purchases these loans
from used-automobile dealerships that participate in the company's loan
purchase program.
National Auto Credit also performs the underwriting and collections
functions for all the loans purchased. Its operations enable these dealers to
provide financing to customers who have limited access to more traditional
consumer credit sources or might otherwise be unable to obtain financing.
This release may include statements that constitute forward-looking
statements, usually containing the words "believe," "estimate," "project,"
"expects," or similar expressions. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements inherently involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. By making these forward-looking statements, the company undertakes
no obligation to update these statements for revisions or changes after the
date of this document.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL AUTO CREDIT, INC.
Date: September 3, 1999 By: /s/ Raymond A. Varcho
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Raymond A. Varcho
Vice President, General Counsel
Secretary
