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
Date of report (date of earliest event reported): October 1, 1998
SOUTHERN PACIFIC FUNDING CORPORATION
(Exact name of registrant as specified in its charter)
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California 1-11785 33-0636924
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
4949 Meadows Road, Suite 600
Lake Oswego, OR 97035
(Address of principal executive offices) (Zip code)
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(503) 303-5400
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
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Item 3. Bankruptcy or Receivership.
On October 1, 1998, Southern Pacific Funding Corporation, a California
corporation (the "Registrant"), filed a petition for reorganization under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
District of Oregon (Case No. 398-37613). The Registrant is managing its business
as debtor-in-possession subject to Court approval for certain actions of the
Registrant. See the press release dated October 1, 1998, filed as Exhibit 99.1
hereto and incorporated herein by this reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Registrant's press release dated October 1, 1998.
SIGNATURE
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 thereunto duly authorized.
SOUTHERN PACIFIC FUNDING CORPORATION
Dated: October 1, 1998 By: /s/ E. James Hedemark
Name: E. James Hedemark
Title: Chief Executive Officer
FOR MORE INFORMATION CONTACT:
David Kiser, CPA
Director of Corporate Communications
Southern Pacific Funding Corporation
(503) 303-2280
FOR IMMEDIATE RELEASE:
SOUTHERN PACIFIC FUNDING CORPORATION
FILES PETITION FOR REORGANIZATION,
ARRANGES POST-PETITION FINANCING
LAKE OSWEGO, Ore.--(BUSINESS WIRE)--Oct. 1, 1998 - Southern Pacific Funding
Corporation announced today that the Company has voluntarily filed a petition
for reorganization under Chapter 11 in the United States Bankruptcy Court for
the District of Oregon.
The petition does not involve Southern Pacific Funding's subsidiaries, National
Capital Funding, Inc., Oceanmark Financial Corporation, Home America Financial
Services, Inc., Hallmark America Corp., and its U.K. subsidiary, Southern
Pacific Mortgage Limited. The Chapter 11 case is pending before U.S. Bankruptcy
Court Judge Elizabeth L. Perris and the Company is continuing in business as a
debtor in possession.
Attempts by the Company to negotiate with its warehouse lenders with respect to
recent notices of default were unsuccessful, leaving Southern Pacific Funding
unable to continue to fund mortgage loans in the normal course. Accordingly, the
Company filed the bankruptcy petition in order to obtain an opportunity to
reorganize its affairs under the protection of Chapter 11 and implement its
previously-announced restructuring initiatives. Greenwich Capital Markets, Inc.,
has agreed to provide the Company with post-petition financing consisting of a
$100 million warehouse credit facility and a $12 million working capital line of
credit (of which not more than $7.5 million may be outstanding prior to October
5, 1998). A hearing has been set for later today to obtain court approval of the
financing arrangement with Greenwich Capital. The financing commitment will
expire not later than October 16, 1998, by which time Southern Pacific Funding
hopes to have permanent "debtor-in-possession" financing in place.
E. James Hedemark, Chief Executive Officer, said, "The decision to file under
Chapter 11 was a difficult one. We were forced to take this action as a result
of difficult market conditions in the third quarter. We have concluded that the
best way to protect the value of the Company and its business is to proceed with
the protection of the Court. Chapter 11 allows us to continue operating while we
consider all our strategic alternatives, including a sale of the Company, and
develop a restructuring plan."
Southern Pacific Funding Corporation is a Lake Oswego, Oregon, based specialty
finance company that originates, purchases and sells home equity loans made to
borrowers whose needs are not met by traditional financial institutions.
Southern Pacific Funding and its subsidiaries originate loans throughout the
United States and in the United Kingdom through diversified
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origination channels. The Company's largest shareholder, Imperial Credit
Industries, Inc. (NASDAQ:ICII), currently owns 47% of the Common Stock of
Southern Pacific Funding.
More information may be found on Southern Pacific Funding Corporation on the
Internet @ http://www.sp-funding.com
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