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): April 30, 1999
SOUTHERN PACIFIC FUNDING CORPORATION
(Exact name of registrant as specified in its charter)
California 1-11785 33-0636924
(State or other jurisdiction (Commission File No.) (IRS Employer Identification
of incorporation) No.)
One Centerpointe Drive, Suite 551
Lake Oswego, Oregon 97035
(Address of principal executive offices) (Zip Code)
(503) 684-6316
(Registrant's telephone number, including area code)
Item 5. Other Events.
The Corporation filed a voluntary petition with the United States
Bankruptcy Court for the District of Oregon (the "Bankruptcy Court") under
Chapter 11 of the United States Bankruptcy Code, Case No. 298-37613-elp11, on
October 1, 1998. The Corporation is required to file Monthly Operating Reports
with the Bankruptcy Court pursuant to Bankruptcy Rule 2015. In connection
therewith, attached hereto as Exhibit 99 are the financial statements (omitting
certain schedules) included in the Rule 2015 Report for the Month and Year of
March 1999, filed with the Bankruptcy Court on April 30, 1999.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits:
99 Financial Statements from Rule 2015 Report for the
Month and Year of March 1999
-1-
<PAGE>
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: May 10, 1999 By: /s/ Timothy Breedlove
Name: Timothy Breedlove
Title: Chief Financial Officer
-2-
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
<TABLE>
INCOME STATEMENT (Page 1 of 2) Filing
October 1, 1998
December January February March to Date
------------- ------------- ----------- ------------- -------------
GROSS SALES
<S> <C> <C> <C> <C> <C>
Interest Income $ 133,026 $ 120,039 $ 128,778 $ 147,227 $ 5,710,895
Servicing Income (219,394) 584,778 766,674 1,601,342 2,471,476
Prepayment Penalty Income 967,887 1,232,858 659,343 933,755 4,481,829
Less: Returns and Allowances -
---------- ---------- ---------- ---------- ----------
NET SALES 881,519 1,937,675 1,554,795 2,682,324 12,664,200
COST OF SALES
BEGINNING INVENTORY -
Add: PURCHASES -
Less: ENDING INVENTORY -
---------- ---------- ---------- ---------- ----------
COST OF GOODS SOLD - - - - -
GROSS PROFIT 881,519 1,937,675 1,554,795 2,682,324 12,664,200
OTHER OPERATING EXPENSES:
OFFICER SALARIES/DRAWS 299,637 290,739 214,410 214,465 1,830,367
DIRECT LABOR/SALARIES 364,673 196,131 213,631 196,655 1,941,801
BENEFITS/PAYROLL TAXES 11,991 102,529 53,258 57,025 623,506
SUPPLIES 28,404 4,174 10,529 4,650 83,524
INSURANCE 31,527 28,427 28,427 56,495 154,238
RENT 57,755 51,533 75,159 52,689 760,894
GENERAL AND ADMINISTRATIVE 1,497,692 1,048,984 781,433 1,441,127 5,514,839
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
INCOME STATEMENT (Page 2 of 2) Filing
October 1, 1998
December January February March to Date
----------- ----------- ---------- ----------- ----------
DEPRECIATION/AMORTIZATION 327,568 160,042 160,042 160,042 1,493,317
----------- ----------- ---------- ----------- ----------
TOTAL OPERATING EXPENSES 2,619,247 1,882,559 1,536,889 2,183,148 12,402,486
----------- ----------- ---------- ----------- ----------
NET OPERATING INCOME (LOSS) (1,737,728) 55,116 17,906 499,176 261,714
ADD: OTHER INCOME (2) 38,150 1,030,005 87,303 158,447 1,212,599
LESS OTHER EXPENSES:
INTEREST EXPENSE (517,419) (688,451) (383,113) (459,305) (5,420,753)
OTHER (3) (3,467,844) (1,095,623) (434,491) (1,276,935) (4,439,260)
----------- ----------- ---------- ----------- ----------
TOTAL OTHER EXPENSES (5,684,841) (698,953) (712,395) (1,078,617) (8,385,700)
GAIN/(LOSS) SALE OF ASSETS (544,418) (3,230,938) (64,328) (3,433,218) (3,567,737)
----------- ----------- ---------- ----------- -----------
INCOME (LOSS) BEFORE TAXES (6,229,259) (3,929,891) (776,723) (4,511,835) (11,953,437)
INCOME TAXES 1,145,987 1,176,222 142,025 1,342,484 3,118,383
=========== =========== ========== =========== ===========
NET INCOME (LOSS) $(5,083,272) $(2,753,669) $ (634,698) $(3,169,351) $(8,835,054)
=========== =========== ========== =========== ===========
</TABLE>
(2) Schedule of Other Income attached
(3) Schedule of Other Expense attached
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATIONS
<TABLE>
Filing
October 1, 1998
December January February March to Date
-------------- ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
NET INCOME (LOSS) $(5,083,272) $(2,753,669) $ (634,698) $ (3,169,351) $(12,004,405)
ADJUSTMENTS TO RECONCILE
NET INCOME TO NET CASH:
DEPRECIATION/AMORTIZATION 327,568 281,843 311,607 311,607 2,078,290
(GAIN)LOSS ON SALE OF ASSETS 544,418 3,230,938 64,328 75,033 4,770,012
(INCREASE)DECREASE IN RECEIVABLES (1,375,363) 2,254,471 (392,798) (536,775) 8,922,611
(INCREASE)DECREASE IN INVENTORY (1) 1,005,339 242,557 72,371 6,140,449 301,714,397
INCREASE(DECREASE) IN PAYABLES (457,059) 721,311 211,909 2,116,117 (5,782,364)
OTHER, NET (2) 3,854,169 14,631 719,480 2,905,517 8,952,902
----------- ----------- ----------- ------------ ------------
NET CASH PROVIDED BY OPERATIONS (1,184,200) 3,992,082 352,199 7,842,597 308,651,443
CASH FLOWS FROM INVESTING/FINANCING
(PURCHASE OF)FIXED ASSETS - - - - -
CAPITAL CONTRIBUTIONS - - - - -
LOAN PROCEEDS (SCHEDULE F, NUMBER 6) 125,122 38,960,936 - - 39,086,058
LOAN PRINCIPAL/CAPITAL LEASE (PAYMENTS) (11,538) (38,690,645) (309,021) (4,648,449) (337,975,191)
----------- ----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN CASH (1,070,616) 4,262,373 43,178 3,194,148 9,762,310
BEGINNING CASH 5,263,669 4,193,053 8,455,426 8,498,604 1,930,442
=========== =========== =========== ============ ============
ENDING CASH $ 4,193,053 $ 8,455,426 $ 8,498,604 $ 11,692,752 $ 11,692,752
=========== =========== =========== ============ ============
(1) Mortgage Loans held for Sale
(2) Accrual of Operations of subsidiaries $ 3,467,844 $ 1,095,623 $ 434,491 $ 1,276,935 $ 5,716,197
Residual Loan Interests 258,976 909,933 286,874 1,572,764 3,521,859
Prepaid expenses and other assets, net 127,349 (1,990,925) (1,885) 55,818 (285,154)
=========== =========== =========== ============ ============
$ 3,854,169 $ 14,631 $ 719,480 $ 2,905,517 $ 8,952,902
=========== =========== =========== ============ ============
</TABLE>
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
COMPARATIVE BALANCE SHEET (Page 1 of 2)
<TABLE>
AS OF AS OF AS OF AS OF
12/31/98 01/31/99 02/28/99 03/31/99
-------------- -------------- -------------- --------------
ASSETS
Current Assets:
<S> <C> <C> <C> <C>
Cash $ 4,193,053 $ 8,455,426 $ 8,498,604 $ 11,692,752
Inventory ( Mortgage Loans Held for Sale ) 6,859,174 6,616,617 6,544,246 403,797
Accounts Receivable 96,512,100 94,257,629 94,650,427 95,187,202
(net of bad debts)
Notes Receivable - - - -
Other (attach schedule) 1,535,181 3,149,915 2,993,576 2,816,059
-------------- -------------- -------------- --------------
Total Current Assets 109,099,508 112,479,587 112,686,853 110,099,810
Fixed Assets:
Property and Equipment 7,668,219 1,500,368 1,436,040 1,361,007
Less: Accumulated Depreciation (3,412,619) (408,799) (408,799) (408,799)
-------------- -------------- -------------- --------------
Total Fixed Assets 4,255,600 1,091,569 1,027,241 952,208
Other Assets (attach schedule) 320,152,631 317,174,516 316,299,768 313,260,161
-------------- -------------- -------------- --------------
TOTAL ASSETS $ 433,507,739 $ 430,745,672 $ 430,013,862 $ 424,312,179
============== ============== ============== ==============
LIABILITIES
Postpetition Liabilities:
Accounts Payable $ 41,155 $ 99,496 $ 82,481 $ 145,676
Notes Payable 125,122 38,957,990 38,649,723 34,002,109
Rents and Leases Payable - - - -
Taxes Payable - - - -
Accrued Interest - 78,563 121,742 -
Other 1,239,891 3,095,204 3,419,228 4,072,549
-------------- -------------- -------------- --------------
Total Postpetition Liabilities 1,406,168 42,231,253 42,273,174 38,220,334
Prepetition Liabilities (Noncurrent):
Unsecured Debt 171,637,000 171,606,879 171,609,871 174,472,863
Notes Payable-Secured 151,576,120 111,948,980 111,948,980 111,948,980
Priority Claims:
Taxes 76,332 76,332 76,332 76,332
Wages 1,405,267 1,405,267 1,405,267 1,405,267
Deposits
Other 16,736,430 15,560,208 15,418,183 14,075,699
-------------- -------------- -------------- --------------
Total Prepetition Liabilities 341,431,149 300,597,666 300,458,633 301,979,141
-------------- -------------- -------------- --------------
TOTAL LIABILITIES $ 342,837,317 $ 342,828,919 $ 342,731,807 $ 340,199,475
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
COMPARATIVE BALANCE SHEET (Page 2 of 2)
OWNER EQUITY (DEFICIT) 90,670,422 87,916,753 87,282,055 84,112,704
-------------- -------------- -------------- --------------
TOTAL LIABILITIES AND OWNER EQUITY $ 433,507,739 $ 430,745,672 $ 430,013,862 $ 424,312,179
============== ============== ============== ==============
</TABLE>
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
SCHEDULE F
STATEMENT OF PERSONNEL, INSURANCE AND OPERATIONS
1. PERSONNEL REPORT (required if more than ten employees)
<TABLE>
Full Time Part Time
<S> <C> <C>
Total number of employees at beginning of period 84 -
Number hired during period 4 -
Number terminated or resigned during period 3 -
---------- --------
Total number of employeed on payroll at period end 85 -
</TABLE>
Total Payroll for the period: $ 385,510
Includes payment of severance and retention compensation for terminated
employees
2. INSURANCE - Copies of certificates of insurance must accompany first report.
For subsequent months, explain any changes in insurance coverage:
3. Subsequent to the filing of the petition have any payments been made on
prepetition unsecured debt, except as authorized by the court?
- ----X-------------------------- No.
<TABLE>
<S> <C>
- ------------------------------- Yes. Identify amount, who was paid and date paid: --------------------
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
</TABLE>
4. Provide a narrative report of significant events which may have an effect on
the financial condition of the debtor or any events out of the ordinary
course of business, which have occurred since the period covered by this
report. Attach separate sheet(s) if necessary.
Debtor has entered into a tentative agreement for the sale of its
significant assets which will be noticed and approved in the ordinary course
of the case.
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
STATEMENT OF PERSONNEL, INSURANCE, AND OPERATIONS - Continued
5. If assets, other than inventory sold in the ordinary course of business,
were disposed of during the current month, provide the following information
for each asset (attach separate sheet(s), if necessary):
ENTITY TO WHOM AUTHORIZATION
TRANSFERRED (e.g. notice
(relationship dated ----- or
DESCRIPTION VALUE ON to debtor court order
OF ASSET BOOK BASIS if any) dated -----) Terms
- --------------------------------------------------------------------------------
<PAGE>
STATEMENT OF PERSONNEL, INSURANCE, AND OPERATIONS - Continued
6. For each loan obtained during the current month provide the following
information (attach separate sheet(s), if necessary):
<TABLE>
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMOUNT OF LOAN TERMS OF LOAN
LENDER'S NAME (describe right (interest rate, PROCEDURE FOR
(Relationship to receive future maturity OBTAINING
to debtor, if any) advances, if any) collateral, etc.) AUTHORIZATION
-----------------------------------------------------------------------------------------------------
</TABLE>
7. Statement of Disbursements and Fee paid to the U.S. Trustee pursuant to
Federal Rule of Bankruptcy Procedure 2015(a)(5):
<TABLE>
-----------------------------------------------------------------------------------------------------
QUARTER ENDING TOTAL DISBURSEMENTS FEE PAID
-------------- ------------------- --------
<S> <C> <C>
March 31, 1998 ----------- --------
June 30, 1998 ----------- --------
September 30, 1998 ----------- --------
December 31, 1998 $ 6,857,519 (1) $ 10,000
March 31, 1999 $ 4,081,434 (1) --------
</TABLE>
(1) Excludes servicing disbursements
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
INCOME STATEMENT
SUPPORTING SCHEDULE (2) OTHER INCOME
<TABLE>
Filing
October 1, 1998
December January February March to Date
---------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Insurance Commissions Revenue (Servicing) $ 6,811 $ 20,763 $ 62,373 $ 121,814 $ 113,766
Discount on Early Payoff of Secured Financing 1,000,000 1,000,000
Miscellaneous Refunds Received 31,339 9,242 24,930 36,633 73,903
---------- ---------- ----------- --------- -----------
TOTAL OTHER INCOME $ 38,150 $1,030,005 $ 87,303 $ 158,447 $ 1,187,669
========== ========== =========== ========= ===========
</TABLE>
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
INCOME STATEMENT
SUPPORTING SCHEDULE (3) OTHER EXPENSE
<TABLE>
Filing
October 1, 1998
December January February March to Date
------------- ------------ ---------- ------------ ---------------
Equity in Operations (Losses) of Subsidiaries
<S> <C> <C> <C> <C> <C>
Oceanmark Financial Services $ (1,548,458) $ (246,476) $ 44,856 $ (13,476) $ (1,927,044)
Home America Financial Services (314,202) (32,740) (124,513) (91,500) (661,234)
Hallmark America - - - - (7,265)
National Capital Funding, Inc. - - - - (114,156)
Southern Pacific Mortgage Limited (1,605,184) (816,407) (354,834) (1,171,959) (1,729,563)
------------ ------------ ---------- ------------ --------------
TOTAL OTHER EXPENSE $ (3,467,844) $ (1,095,623) $ (434,491) $ (1,276,935) $ (4,439,262)
============ ============ ========== ============ ==============
</TABLE>
<PAGE>
Southern Pacific Funding Corp. Debtor in Possession
Case No. 398-37613-elp11
RULE 2015 REPORT FOR THE MONTH
AND YEAR MARCH 1999
COMPARATIVE BALANCE SHEET
SUPPORTING SCHEDULES - OTHER ASSETS
<TABLE>
AS OF AS OF AS OF AS OF
12/31/98 01/31/99 02/28/99 03/31/99
-------------- ------------- -------------- -------------
OTHER CURRENT ASSETS
<S> <C> <C> <C> <C>
Prepaid Expenses 1,384,119 2,997,327 2,845,762 2,694,197
Prepaid Lease Deposit 149,052 149,052 149,052 120,874
Prepaid Maintenace Contracts 1,059 880 701 523
Miscellaneous Servicing Accounts 951 2,656 (1,939) 465
------------- ------------- -------------- -------------
TOTAL OTHER CURRENT ASSETS $ 1,535,181 $ 3,149,915 $ 2,993,576 $ 2,816,059
============= ============= ============== =============
OTHER ASSETS
Residual Loan Interests 302,231,415 301,321,482 301,034,608 299,461,844
Mortgage Servicing Rights 7,183,570 7,023,528 6,863,486 6,703,444
Investment in Subsidiaries 9,902,922 8,807,299 8,372,808 7,095,873
Real Estate Owned 834,724 22,207 28,866 (1,000)
------------- ------------- -------------- -------------
TOTAL OTHER ASSETS $ 320,152,631 $ 317,174,516 $ 316,299,768 $ 313,260,161
============= ============= ============== =============
</TABLE>
