<PAGE> 1
As filed with the Securities and Exchange Commission on July 3, 1996
Registration Statement No. 333-07439
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
Amendment No. 1 to
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_________________
LIBERTE INVESTORS INC.
_________________
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 6799 75-1328153
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
600 N. PEARL STREET
SUITE 420, LB #168
DALLAS, TEXAS 75201
(214) 720-8950
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
ROBERT TED ENLOE III
LIBERTE INVESTORS INC.
600 N. PEARL STREET
SUITE 420, LB #168
DALLAS, TEXAS 75201
(214) 720-8950
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
_________________
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=======================================================================================================
Title of Each Class of Proposed Maximum Proposed Maximum
Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Unit Offering Price Registration Fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01
per share . . . . . . . . . . 12,153,658(1) $3.563(2) $43,303,484 $5,665(3)
=======================================================================================================
</TABLE>
(1) The Registrant is filing this Registration Statement in connection with the
reorganization of Liberte Investors, a Massachusetts business trust (the
"Trust"), into the Registrant. In the reorganization, each share of
beneficial interest in the Trust will be converted into one share of the
Registrant's common stock. As of the date of this Registration Statement,
the Trust has 12,153,658 shares of beneficial interest outstanding. This
Registration Statement registers the Trust's distribution of the
Registrant's shares of common stock to the Trust's shareholders in
redemption of their shares of beneficial interest in the Trust.
(2) Pursuant to Rule 457(f) under the Securities Act of 1933, the proposed
maximum offering price of each share of the Registrant's common stock is
estimated to be the average of the high and low sale prices of a share of
beneficial interest in the Trust as of a date five business days before the
initial filing of this Registration Statement. Accordingly, the Registrant
has used $3.563 as such per share price, which is the average of the high
sale price of $3.625 and the low sale price of $3.500 reported on the New
York Stock Exchange for a share of beneficial interest in the Trust on June
27, 1996.
(3) On April 2, 1996, the Trust filed a Preliminary Proxy Statement/Prospectus
concerning the reorganization with the Securities and Exchange Commission.
In connection with that filing, the Trust paid a filing fee of $9,268.
<PAGE> 2
Pursuant to Rule 457(b), the Registrant has deducted this prior payment
when computing the amount of the registration fee owed in connection with
this Registration Statement. Accordingly, the amount of the registration
fee owed is 1/29 of 1% of the proposed maximum aggregate offering price of
$43,303,484, which is $14,933, less the amount previously paid
of $9,268. The Trust paid this fee on behalf of the Registrant with the
initial filing of the Registration Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Dallas, State of Texas, on July 3, 1996.
LIBERTE INVESTORS INC.
By: /s/ Bradley S. Buttermore
-----------------------------------
Name: Bradley S. Buttermore
Title: Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this amendment to the registration statement has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Gene H. Bishop* Director July 3, 1996
- ---------------------------
GENE H. BISHOP
/s/ Bradley S. Buttermore Principal Accounting and July 3, 1996
- --------------------------- Financial Officer
BRADLEY S. BUTTERMORE
/s/ Robert Ted Enloe III* Principal Executive Officer July 3, 1996
- --------------------------- and Director
ROBERT TED ENLOE III
</TABLE>
* Pursuant to a Power of Attorney filed with the initial Registration
Statement.
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2.1 Plan of Reorganization, dated as of April 1, 1996, between the Trust and the Company.*
2.2 Stock Purchase Agreement, dated as of January 16, 1996, between the Trust and the Purchaser (incorporated by
reference to Exhibit 4.1 of the Trust's Current Report on Form 8-K filed with the Commission on January 24,
1996), as amended by the Amendment to the Stock Purchase Agreement, dated as of February 27, 1996, and the Second
Amendment to the Stock Purchase Agreement, dated as of March 28, 1996 (incorporated by reference to Exhibit 2.1
of the Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996).
2.3 Letter Agreement, dated as of April 1, 1996, among the Trust, the Company, and the Purchaser.*
2.4 Confidentiality and Standstill Agreement, dated as of January 16, 1996, between the Trust and the Purchaser
(incorporated by reference to Exhibit 2.2 of the Trust's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996).
2.5 Escrow Agreement, dated as of January 19, 1996, among the Trust, the Purchaser, and Texas Commerce Bank National
Association.*
2.6 The Trust's First Amended Plan of Reorganization, dated December 14, 1993, as modified by the Modification to the
First Amended Plan of Reorganization, dated January 9, 1994 (incorporated by reference to the Trust's Current Report
on Form 8-K filed with the Commission on February 9, 1994).
3.1 The Company's Charter.*
3.2 The Company's Bylaws.*
3.3 The Trust's Declaration of Trust, dated June 26, 1969, restated to give effect to the First Amendment to the
Declaration of Trust, dated September 19, 1969, the Second Amendment to the Declaration of Trust, dated
January 24, 1986, the Third Amendment to the Declaration of Trust, dated January 19, 1989, the Fourth Amendment
to the Declaration of Trust, dated December 18, 1992, the Fifth Amendment to the Declaration of Trust, dated
March 31, 1995, and the Sixth Amendment to the Declaration of Trust, dated November 22, 1995 (incorporated by
reference to Exhibit 3.1 of the Trust's Quarterly Report on Form 10-Q for the quarter ended December
31, 1995).
3.4 Form of the Seventh Amendment to the Trust's Declaration of Trust.*
3.5 The Trust's Bylaws, restated to give effect to the First Amendment to the Bylaws (incorporated by reference to
Exhibit 3.1 of the Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996).
4.1 Form of Registration Rights Agreement to be entered into by the Company and the Purchaser.*
4.2 Stock Option Agreement, dated May 7, 1993, between the Trust and Robert Ted Enloe III (incorporated by reference
to Exhibit 10.22 of the Trust's Annual Report on Form 10-K for the year ended June 30, 1993).
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.3 Form of Agreement Clarifying Registration Rights to be entered into by the Company, the Purchaser, the Enloe
Descendants' Trust, and Robert Ted Enloe III.*
5.1 Opinion of Morris, Nichols, Arsht & Tunnell.
8.1 Opinion of Hughes & Luce, L.L.P.
10.1 Exchange Agent Agreement, dated as of June 13, 1996, between the Company and KeyCorp Shareholder Services, Inc.*
10.2 Form of Indemnification Agreement for the Company's directors and officers and schedule of substantially
identical documents.*
10.3 Retirement Plan for Trustees of the Trust, dated October 11, 1988 (incorporated by reference to Exhibit 10.23 of
the Trust's Annual Report on Form 10-K for the year ended June 30, 1993).
10.4 Promissory Note, dated October 22, 1993, from Robert Ted Enloe III to the Trust (incorporated by reference to
Exhibit 10.1 of the Trust's Quarterly Report on Form 10-Q for the quarter ended December 31, 1993).
10.5 Stock Pledge and Security Agreement, dated October 22, 1993, between Robert Ted Enloe III and the Trust
(incorporated by reference to Exhibit 10.2 of the Trust's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1993), as supplemented by a letter agreement, dated November 13, 1995, between the Enloe
Descendants' Trust and the Trust.*
10.6 Agreement Regarding Registration Rights, Amendment of Stock Option Agreement, and Ratification of Pledge
Agreement, dated as of November 13, 1995, among the Trust, Robert Ted Enloe III, and the Enloe Descendants'
Trust.*
10.7 Asset Disposition Agreement, dated February 28, 1995, between the Trust and ST Lending, Inc. (incorporated by
reference to Exhibit 10.9 of the Trust's Annual Report on Form 10-K for the year ended June 30, 1995).
13.1 The Trust's Annual Report on Form 10-K for the year ended June 30, 1995, as amended.*
13.2 The Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996.*
21.1 A list of the subsidiaries of the Trust.*
23.1 Consent of Bear, Stearns & Co. Inc.*
23.2 Consent of Ernst & Young LLP.*
23.3 Consent of Hughes & Luce, L.L.P.*
23.4 Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 5.1).
24.1 Power of Attorney executed by Gene H. Bishop.*
24.2 Power of Attorney executed by Bradley S. Buttermore.*
24.3 Power of Attorney executed by Robert Ted Enloe III.*
27.1 Financial Data Schedule for the Company's April 1, 1996 Balance Sheet (included only in the EDGAR filing).*
99.1 Form of the Cover Letter.*
99.2 Form of the Notice of the Special Meeting.*
99.3 Form of the Proxy Card.*
99.4 Form of a Letter from the Trust to Brokers.*
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
99.5 Form of a Letter from Brokers to their Clients.
99.6 Form of the Letter of Transmittal.*
99.7 Financial Statement Schedule IV--Mortgage Loans on Real Estate (included in Exhibit 13.1).*
</TABLE>
* Filed with the initial Registration Statement.
<PAGE> 1
EXHIBIT 5.1
[MORRIS, NICHOLS, ARSHT & TUNNELL, LETTERHEAD]
July 1, 1996
Liberte' Investors Inc.
600 North Pearl Street
Suite 420, LB #168
Dallas, TX 75201
Ladies and Gentlemen:
We have acted as Delaware counsel in connection with certain matters
relating to the Registration Statement on Form S-4, (the "Registration
Statement), of Liberte Investors Inc., a Delaware corporation (the "company"),
filed with the securities and Exchange Commission under the Securities Act of
1933, as amended, relating to the issuance by the Company of up to 12,153,658
shares (the "Shares") of the Company's common stock, par value $.01 per share
(the "Common Stock"), including the Prospectus contained therein.
In connection with this opinion, the Company has provided to us and we
have reviewed copies of Amendment No. 1 to the Schedule 14A that constitutes a
part of the Registration Statement, the certificate of incorporation and bylaws
of the Company, the Assignment and Assumption of Stock Purchase Agreement dated
as of April 1, 1996 between Liberte Investors, a Massachusetts business trust
(the "Trust") and the Company, the Written Consent of the
<PAGE> 2
Liberte Investors Inc.
July 1, 1996
Page 2
Board of Directors of the Company in Lieu of Organizational Meeting of the
Board of Directors (the "Directors Consent"), and a form of certificate
representing the Shares. We have also obtained and relied upon a certificate,
dated today, issued by the Secretary of State of the State of Delaware with
respect to the Company's good standing as a Delaware corporation. In connection
with rendering this opinion we have not reviewed any other agreements or
documents of the Company and we have assumed that nothing contained in any such
agreement or document that we have not reviewed is inconsistent with or
contrary to the opinions expressed herein.
We have assumed the genuineness of all signatures on the documents
listed above, the legal capacity of natural persons to execute such documents,
the conformity to original documents of all documents submitted to us as copies,
and the authenticity of the originals of such documents. In addition, we have
assumed (1) the Company will have available for issuance in connection with the
Plan of Reorganization (the "Plan of Reorganization") between the Trust and the
Company set forth in the Registration Statement a number of authorized but
unissued shares of Common Stock not less than the number of Shares and that such
number of Shares will not have been previously subscribed for or otherwise
committed to be issued; (2) the number of outstanding Beneficial Shares of the
Trust as of the Closing (as that term is used in Section 5 of the Plan of
Reorganization) will be equal to the number of Shares and will also be equal to
the sum of (a) the number of Shares
<PAGE> 3
Liberte Investors Inc.
July 1, 1996
Page 3
authorized for issuance in connection with the Plan of Reorganization pursuant
to the Directors Consent, and (b) one thousand; (3) the consideration received
by the Company for the Shares issued pursuant to the Plan of Reorganization
will have a value equal to at least the par value of such Shares; and (4) the
Company has delivered to the Trust certificates in the form provided to us for
the Shares issued pursuant to the Assumption Agreement.
Based upon and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that (1) the Shares have been duly
authorized; (2) those Shares that were issued pursuant to and in accordance
with the terms of the Assumption Agreement were, validly issued, fully paid and
nonassessable; and, (3) upon receipt of the consideration provided for in the
Plan of Reorganization and the Directors Consent, and delivery of a certificate
or certificates representing the Shares to be issued pursuant to such Plan, in
the form provided to us, the Shares to be issued pursuant to the Plan of
Reorganization will be validly issued, fully paid and nonassessable and (4) the
Shares will remain validly issued, fully paid and nonassessable upon
transfer by the Trust to the holders of beneficial interests in the Trust
pursuant to the Plan of Reorganization.
The opinions set forth above are expressed for your benefit and may not
be relied upon by any other person or entity for any purpose without our prior
written consent; provided,
<PAGE> 4
Liberte Investors Inc.
July 1, 1996
Page 4
however, we understand that you wish to file this opinion as an exhibit to the
Registration Statement and we consent thereto and to the reference to our firm
and to this opinion in the "Legal Matters" section of the Registration
Statement.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
------------------------------------
Morris, Nichols, Arsht & Tunnell
<PAGE> 1
EXHIBIT 8.1
[HUGHES & LUCE, L.L.P. LETTERHEAD]
April 1, 1996
Liberte Investors
600 N. Pearl Street
Suite 420, LB #168
Dallas, Texas 75201
Hunter's Glen/Ford, Ltd.
200 Crescent Court, Suite 1350
Dallas, Texas 75202
Re: Reorganization of Liberte Investors and Stock Purchase
Agreement between Liberte Investors and Hunter's Glen/Ford, Ltd.
Ladies and Gentlemen:
You have requested our opinion on certain federal income tax
consequences of two proposed transactions: the reorganization of Liberte
Investors, a Massachusetts business trust (the "Trust"), into a Delaware
corporation called Liberte Investors Inc. (the "Company"), and the issuance by
the Company of 8,102,439 shares of the Company's common stock, par value $.01
per share (the "Common Stock") to Hunter's Glen/Ford, Ltd. (the "Purchaser").
In connection with rendering this opinion, you have asked us to rely on
the following facts. The Trust is a publicly held entity whose shares of
beneficial interest trade on the New York Stock Exchange. The Trust has
12,153,658 shares of beneficial interest outstanding. The Trust has net
operating loss carryovers for federal income tax purposes that it is entitled
to deduct in its current taxable year without limitation (the "NOL
Carryovers"). The Company is a newly formed Delaware corporation formed for the
purposes of this transaction. The Company has 1,000 shares of Common Stock
outstanding, all of which are owned by the Trust. The reorganization (the
"Reorganization") will take place pursuant to a written plan of reorganization
to be entered into between the Trust and the Company identical to the plan of
reorganization that is an exhibit to the Proxy Statement/Prospectus issued by
the Trust and the Company in connection with the proposed transactions (such
Proxy Statement/Prospectus referred to herein as the "Proxy Statement" and such
plan of reorganization referred to herein as the "Plan of Reorganization").
Pursuant to the Plan of Reorganization, (i) the Trust will transfer all of its
assets to the Company, (ii) the Company will assume all of the Trust's
liabilities and issue 12,152,658 shares of Common Stock to the Trust (one share
of Common Stock for each share of
<PAGE> 2
April 1, 1996
Page 2
beneficial interest in the Trust issued and outstanding, less 1,000 shares
already owned by the Trust), and (iii) the Trust will distribute all such
Common Stock to its shareholders in complete liquidation and termination of
the Trust. Immediately after the Reorganization, pursuant to a stock purchase
agreement between the Trust and the Purchaser dated January 16, 1996, as
amended (the "Stock Purchase Agreement"), the Company will issue 8,102,439
shares of Common Stock to the Purchaser in exchange for cash (the "Stock
Purchase"). The Reorganization and the Stock Purchase will occur on a single
day (the "Closing Date"). After the Reorganization and the Stock Purchase, the
Company will have 20,256,097 shares of Common Stock outstanding. The Company
will not have any other securities issued or outstanding.
In rendering this opinion, we have examined executed originals,
counterparts or copies of the Stock Purchase Agreement, the proposed Plan of
Reorganization, the Proxy Statement, the Registration Rights Agreement in the
form attached as an exhibit to the Stock Purchase Agreement (the "Registration
Rights Agreement"), and each of the other documents and agreements specifically
referenced therein as we have considered necessary or appropriate. In
addition, we have examined and relied upon copies of the Forms 10-K that have
been filed by the Trust with the Securities and Exchange Commission and copies
of the Schedules 13D and 13G filed with respect to the Trust with the
Securities and Exchange Commission through the date one day before the date of
this opinion. We also have examined and relied upon originals or copies of such
records, certificates, representation letters and other documents and
instruments as we have considered necessary or appropriate for enabling us to
express the opinions herein set forth (including certificates representing
factual matters we received from the Trust, the Company and the Purchaser, a
representation letter from FMR Corp. to the Trust dated February 29, 1996, and a
representation letter from Jeffrey S. Halis to the Trust dated January 24,
1996). In all such examinations, we have assumed the authenticity and
completeness of all documents submitted to us as originals and the conformity to
originals and completeness of all documents submitted to us as photostatic,
conformed, notarized, or certified copies. Where documents contain factual
representations, we have assumed that the representations are true, correct and
complete.
In rendering this opinion, we are also relying upon the following
assumptions (some of which have been represented to us in writing):
(a) There is no plan or intention on the part of the shareholders
of the Trust, and as of the Closing Date there will be no such plan or
intention, to sell, exchange, or otherwise dispose of a number of shares of the
Company Common Stock to be received by them in the
<PAGE> 3
April 1, 1996
Page 3
Reorganization that would reduce the Trust's shareholders' ownership of Company
Common Stock to a number of shares having a value, as of the Closing Date, of
less than fifty percent (50%) of the value of the outstanding shares of
beneficial interest in the Trust immediately prior to the Reorganization.
(b) Following the Reorganization and the Stock Purchase, the
Company will continue the historic business of the Trust or use a significant
portion of the Trust's historic business assets in a business.
(c) The Company has no plan or intention, and as of the Closing
Date will have no plan or intention, to sell or otherwise dispose of any of the
assets of the Trust acquired in the Reorganization except for dispositions made
in the ordinary course of business.
(d) On the Closing Date, the Common Stock will be the only stock or
other debt or equity security of the Company issued and outstanding (other than
debt securities assumed in the Reorganization which are disclosed in the
Trust's published financial statements), and the Company will not have
outstanding any warrants, options, convertible securities or any other type of
right pursuant to which any person could acquire stock or any other debt or
equity security of the Company. The Company has no plan or intention, and as of
the Closing Date will have no plan or intention, to issue any such instrument
or right.
(e) Excluding the Purchaser and persons whose ownership of shares
of beneficial interest in the Trust is reported on a Schedule 13D or 13G (or
similar schedule) filed with the Securities and Exchange Commission through the
date one day before the date of this opinion ("SEC Schedules"), no individual
or entity (as defined in the Treasury Regulations (the "Tax Regulations")
promulgated under Section 382 of the Internal Revenue Code of 1986, as amended
(the "Code"), hereinafter "Entity") owns, or will own as of the Closing Date,
five percent or more of the outstanding shares of beneficial interest in the
Trust. No individual or Entity who owns five percent or more of the
outstanding shares of beneficial interest in the Trust has increased or
decreased the number of shares of beneficial interest in the Trust it owns
beyond the number reported in the SEC Schedules, nor does, or will (as of the
Closing Date), any person have any immediate or contingent right to acquire any
of the shares of beneficial interest in the Trust owned, or any of the Common
Stock to be received in the Reorganization, by any such individual or Entity
pursuant to a purchase agreement, option, pledge, security agreement or any
other type of instrument, other than pursuant to an option, pledge and/or
security agreement in a typical lending transaction subject to customary
commercial conditions which is described in section 1.382-4(d)(7)(ii) of the
Tax Regulations. No ownership interest in shares of beneficial
<PAGE> 4
April 1, 1996
Page 4
interest in the Trust, and no ownership interest in Common Stock, has been, or
will be as of the Closing Date, structured by any individual or Entity with a
direct or indirect ownership interest in shares of beneficial interest in the
Trust, or in Common Stock, to avoid treating an individual or Entity as a
"5-percent shareholder" of the Trust or the Company within the meaning of
the Tax Regulations, or to permit the Trust or the Company to rely on the
presumption provided in section 1.382-2T(g)(5)(i)(B) of the Tax Regulations,
for a principal purpose of circumventing the limitation of Section 382 of the
Code with respect to the Trust or the Company.
(f) The Purchaser, and each individual or Entity to whom stock
owned by the Purchaser may be directly or indirectly attributed pursuant to
Section 382 of the Code or the Tax Regulations, does not own, and as of the
Closing Date will not own, any shares of beneficial interest in the Trust. As
of the Closing Date, the Common Stock to be acquired by the Purchaser in the
Stock Purchase will be (i) the only Common Stock owned by the Purchaser, (ii)
the only Common Stock whose ownership can be attributed to the Purchaser
pursuant to Section 382 of the Code or the Tax Regulations, and (iii) the only
Common Stock whose ownership can be attributed (pursuant to Section 382 of the
Code or the Tax Regulations) to each individual or Entity to whom stock owned
by the Purchaser may be directly or indirectly attributed pursuant to Section
382 of the Code or the Tax Regulations.
(g) (i) Each transaction contemplated by the Plan of Reorganization
and the Stock Purchase Agreement will be closed in accordance with the terms of
such documents without modification or waiver; (ii) the Plan of Reorganization,
the Stock Purchase Agreement, and the Registration Rights Agreement constitute
the only documents containing the substantive terms of such transactions; and
(iii) the Plan of Reorganization and the Stock Purchase Agreement have been
duly authorized, executed and delivered by all the parties thereto and are
valid and legally enforceable obligations of each of the parties thereto.
(h) FMR Corp., DDJ Capital Management, LLC, Edward W. Rose III, and
Willowwood Partners, L.P. each will deliver a signed representation letter or
certificate to the Trust in substantially the form attached hereto as Exhibits
A, B, C, and D, respectively.
Based upon the foregoing and subject to the assumptions, qualifications
and limitations set forth herein, we are of the opinion that for U.S. federal
income tax purposes:
(1) The Reorganization will constitute a reorganization within the
meaning of Section 368(a) of the Code, and the Trust and the Company each will
be a party to the reorganization within the meaning of Section 368(b) of the
Code;
<PAGE> 5
April 1, 1996
Page 5
(2) No gain or loss will be recognized by the Trust or the Company
upon the transfer of the Trust's assets and liabilities to the Company in
exchange for Common Stock and the liquidation and termination of the Trust as
provided in the Plan of Reorganization;
(3) No gain or loss will be recognized by a holder of shares of
beneficial interest in the Trust on receipt of Common Stock in exchange for
shares of beneficial interest on the Trust;
(4) The Company will succeed to and take into account the NOL
Carryovers pursuant to Sections 381(a) and 381(c)(1) of the Code; and
(5) The issuance of shares of Common Stock to the Trust's beneficial
shareholders in the Reorganization and the issuance of shares of Common Stock to
the Purchaser pursuant to the Stock Purchase Agreement will not cause the NOL
Carryovers to be limited pursuant to Section 382 of the Code as applied to the
Trust or the Company.
The foregoing opinions are subject to the following qualifications and
limitations:
(a) This opinion is based upon present federal income tax law,
including relevant statutes, regulations, and interpretations thereof by the
Internal Revenue Service and relevant courts, all of which are subject to
change.
(b) This opinion letter is for the information and benefit of the
addressees hereof and is not to be quoted, referred to, or relied on in whole or
in part by any other person without our prior written consent, other than
references in the Proxy Statement.
(c) This opinion letter is limited to the matters stated herein as of
the date hereof. We disavow any obligation to update this opinion letter or
advise you of any changes in our opinions in the event of changes in applicable
law or facts becoming effective after the date hereof or of any additional or
newly discovered information that is brought to our attention.
(d) The Company may refer to this opinion in the legal matters section
of the Proxy Statement, may refer to and quote this reference to Hughes & Luce,
L.L.P. and this opinion in the Federal Income Taxes Consequences section of the
Proxy Statement, and may file this opinion with the Securities and Exchange
Commission as an exhibit to the Company's Form S-4 Registration Statement to be
filed the week of July 1, 1996.
Very truly yours,
/s/ HUGHES & LUCE, L.L.P.
HUGHES & LUCE, L.L.P.
<PAGE> 6
EXHIBIT 8.1
EXHIBIT A
OPINION OF HUGHES & LUCE, L.L.P.
FMR CORP.
[ADDRESS]
April ___, 1996
Liberte Investors
600 N. Pearl Street, Suite 420
Lock Box 168
Dallas, Texas 75201
Attn: Robert T. Enloe, III
President
Gentlemen:
As you know, FMR Corp. filed with the SEC Amendment No. 1 to Schedule
13D dated March 12, 1996, with respect to Liberte Investors (the "Amendment").
The Amendment reports the Liberte shares of beneficial interest held directly
by the Fidelity Funds and by the Accounts of FMTC after certain acquisitions
and dispositions.
You have requested that I verify certain aspects of the Fidelity
Fund's and the Accounts of FMTC's ownership of Liberte shares in order to
satisfy any duty of inquiry you might have under the Internal Revenue Code. In
order to cooperate with you, this letter sets forth certain statements of fact.
Although we understand that you will be using the statements of fact and making
your own determination with respect to how the Internal Revenue Code applies
with respect to the Fidelity Fund's, the Accounts of FMTC's and their partners'
direct or indirect ownership of Liberte shares, FMR Corp. is not making any
statement with regard to, nor taking any responsibility for, the legal
conclusions that may be drawn from these factual statements, nor is FMR Corp.
making any statement with regard to, or taking any responsibility for, any tax
effects to Liberte which occur as a result of the Fidelity Fund's and the
Accounts of FMTC's ownership of Liberte shares.
In a previous letter to you dated February 29, 1996, FMR Corp.
verified that the Liberte shares reported as owned by the Fidelity Funds in the
Schedule 13D originally filed November 22, 1994 were owned by a Delaware
limited partnership (the "Fidelity Partnership") and that the Liberte shares
reported in that Schedule 13D as owned by the Accounts of FMTC were owned by a
Bermuda limited partnership (hereinafter, the "FMTC Partnership #1").
<PAGE> 7
Liberte Investors
April ___, 1996
Page 2
Under penalties of perjury, I hereby state as follows:
1. The 60,000 Liberte shares reported in Schedule B to the Amendment as
being sold by one Account (30,000 of such shares reported as being
sold on January 15, 1996 and 30,000 of such shares reported as being
sold on January 16, 1996) were sold by the FMTC Partnership #1. The
382,300 shares reported in the Amendment are owned by the FMTC
Partnership #1.
2. The 225,600 Liberte shares reported in Schedule B to the Amendment as
being purchased by one Account (such shares being reported as
purchased in various amounts between January 15, 1996 and February 29,
1996) were purchased by a separate single entity which is a Cayman
Island corporation (the "FMTC Corporation") all of the nonvoting stock
of which (representing 99% of the equity) is owned by a Delaware
limited partnership (the "FMTC Partnership #2"). The partners of the
FMTC Partnership #2 are investors who became partners through a
private placement offering. The FMTC Partnership #2 is not the same
partnership as the FMTC Partnership #1 or the Fidelity Partnership.
3. FMR Corp.'s affiliates transferred their general partner interests in
the Fidelity Partnership and the FMTC Partnership #2 and their voting
stock interest in the FMTC Corporation to DDJ Capital Management, LLC
and its affiliates, and terminated their investment management
agreements with those partnerships.
4. FMTC Corporation's decision to purchase Liberte Shares was made based
on its separate investment philosophy and goals and portfolio
planning. Although each of the Fidelity Partnership, the FMTC
Partnership #1 and the FMTC Corporation had a common portfolio
manager, and although Fidelity Management & Research Company and FMTC
may have simultaneously entered purchase orders on behalf of several
funds or investment accounts, FMTC Corporation's decision to purchase
Liberte shares was not based upon the fact that the Fidelity
Partnership or FMTC Partnership #1 already owned, or would or would
not also be purchasing, Liberte shares.
5. Assuming that the Liberte shares owned by the FMTC Corporation were
attributed to the Fidelity Partnership #2, and assuming that the
Liberte shares owned by the Fidelity Partnership and the FMTC
Partnership #1 and the Liberte shares attributed to the FMTC
Partnership #2 -- but only
<PAGE> 8
Liberte Investors
April ___, 1996
Page 3
such shares -- were attributed to, and considered as owned by, their
respective partners in proportion to their percentage interests in the
Fidelity Partnership, the FMTC Partnership #1 or the FMTC Partnership
#2, respectively, and assuming each partner of the Fidelity
Partnership, the FMTC Partnership #1 and the FMTC Partnership #2 was
attributed, and considered to own, all of the Liberte Shares owned by
the Fidelity Partnership, the FMTC Partnership #1, the FMTC
Partnership #2, and the FMTC Corporation that such partner was deemed
to own for purposes of Section 382 of the Internal Revenue Code of
1986, as amended (but only such shares), up until March 1, 1996 (when
FMR Corp.'s affiliates transferred their interests in the Fidelity
Partnership, the FMTC Partnership #2, and the FMTC Corporation to DDJ
Capital Management, LLC and its affiliates), no partner of either the
Fidelity Partnership, the FMTC Partnership #1 or the FMTC Partnership
#2 owned or had owned more than 573,506 Liberte Shares.
Sincerely yours,
<PAGE> 9
EXHIBIT B
DDJ CAPITAL MANAGEMENT LLC
[ADDRESS]
April ___, 1996
Liberte Investors
600 N. Pearl Street, Suite 420
Lock Box 168
Dallas, Texas 75201
Attn: Robert T. Enloe, III
President
Gentlemen:
As you know, DDJ Capital Management, LLC filed a Schedule 13D dated
March 12, 1996 with the SEC with respect to Liberte Investors (the "Schedule
13D"). The Schedule 13D reports Liberte shares of beneficial interest held
directly by The Copernicus Fund, L.P. ("Copernicus") and The Galileo Fund, L.P.
("Galileo").
You have requested that I verify certain aspects of Copernicus' and
Galileo's ownership of Liberte shares in order to satisfy any duty of inquiry
you might have under the Internal Revenue Code. In order to cooperate with you,
this letter sets forth certain statements of fact. Although we understand that
you will be using the statements of fact and making your own determination with
respect to how the Internal Revenue Code applies with respect to Copernicus and
Galileo and their partners' direct or indirect ownership of Liberte shares, DDJ
Capital Management, LLC is not making any statement with regard to, nor taking
any responsibility for, the legal conclusions that may be drawn from these
factual statements, nor is DDJ Capital Management, LLC making any statement
with regard to, or taking any responsibility for, any tax effects to Liberte
which occur as a result of Copernicus and Galileo's ownership of Liberte shares.
Under penalties of perjury, I hereby state as follows:
1. 535,000 of the Liberte shares reported in the Schedule 13D are
owned by Copernicus, which is a single entity which is a
______________ limited partnership. Copernicus is not the same
partnership referred to in paragraph 2 below.
2. 225,600 of the Liberte shares reported in the Schedule 13D are
owned by Galileo, which is a single entity which is a
_____________ limited partnership. Galileo is not the same
partnership referred to in paragraph 1 above.
<PAGE> 10
Liberte Investors
March ___, 1996
Page 2
3. Assuming that the Liberte shares owned by Copernicus and
Galileo -- but only such shares -- are attributed to, and
considered as owned by, their respective partners in
proportion to their percentage interests in Copernicus and
Galileo, respectively, and assuming each partner of Copernicus
and Galileo is attributed, and considered to own, all of the
Liberte shares owned by Copernicus and Galileo that such
partner is deemed to own for purposes of Section 382 of the
Internal Revenue Code of 1986, as amended (but only such
shares), on and after March 1, 1996, no partner of either
Copernicus or Galileo has owned more than 573,506 Liberte
shares.
Sincerely yours,
<PAGE> 11
EXHIBIT C
REPRESENTATION CERTIFICATE
OF
EDWARD W. ROSE III
Edward W. Rose III ("Rose") hereby makes the following representations
to Hughes & Luce, L.L.P. ("H&L") in connection with the opinion of H&L that is
being delivered to Liberte Investors, a Massachusetts business trust (the
"Trust"), and Hunter's Glen/Ford, Ltd. (the "Purchaser") with respect to
certain federal income tax consequences of the reorganization (the
"Reorganization") of the Trust into a Delaware corporation called Liberte
Investors Inc. (the "Company"), and the issuance by the Company (the "Stock
Purchase") of 8,102,439 shares of the Company's common stock, par value $.01
per share (the "Common Stock") to the Purchaser. The undersigned hereby
certifies that H&L may rely on the representations set forth herein in
rendering its opinion.
1. As of the date hereof, Rose, his parents, his wife and her
parents, his children, grandchildren and other lineal descendants, and any
trust for any of their benefit (the "Rose Family"), do not own any more or any
less shares of beneficial interest in the Trust other than those shares
disclosed as owned by a member of the Rose Family in the Schedule 13D,
Amendment No. 8, with respect to the Trust filed by Rose and Willowwood
Partners, L.P. with the Securities and Exchange Commission on February 7, 1996.
2. As of the Closing Date, no person will have an immediate or
contingent right to acquire any of the Common Stock to be received in the
Reorganization by any member of the Rose Family pursuant to a purchase
agreement, option, pledge, security agreement or any other type of instrument,
other than pursuant to an option, pledge and/or security agreement in a typical
lending transaction subject to customary commercial conditions which is
described in section 1.382-4(d)(7)(ii) of the Tax Regulations.
IN WITNESS WHEREOF, I have executed this Representation Certificate as
of the 1st day of April, 1996.
Edward W. Rose III
________________________________
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<PAGE> 12
EXHIBIT D
REPRESENTATION OF CERTIFICATE
OF
WILLOWWOOD PARTNERS, L.P.
Willowwood Partners, L.P. ("Willowwood") hereby makes the following
representations to Hughes & Luce, L.L.P. ("H&L") in connection with the
opinion of H&L that is being delivered to Liberte Investors, a Massachusetts
business trust (the "Trust"), and Hunter's Glen/Ford, Ltd. (the "Purchaser")
with respect to certain federal income tax consequences of the reorganization
(the "Reorganization") of the Trust into a Delaware corporation called Liberte
Investors Inc. (the "Company"), and the issuance by the Company (the "Stock
Purchase") of 8,102,439 shares of the Company's common stock, par value $.01
per share (the "Common Stock") to the Purchaser. The undersigned hereby
certifies that he is a general partner of the Purchaser and that he is
authorized to execute and deliver this Certificate for and in the name of the
Purchaser and that H&L may rely on the representations set forth herein in
rendering its opinion. To the extent this Certificate covers matters not within
the primary responsibility of the undersigned, the undersigned has reviewed
such matters with, and relied on, the other partners, employees and/or other
agents or the Purchaser having primary responsibility with respect thereto.
1. As of the date hereof, Willowwood does not own any more or any
less shares of beneficial interest in the Trust other than those shares
disclosed as owned by Willowwood in the Schedule 13D, Amendment No. 8, with
respect to the Trust filed by Edward W. Rose III and Willowwood with the
Securities and Exchange Commission on February 7, 1996.
2. As of the Closing Date, no person will have an immediate or
contingent right to acquire any of the Common Stock to be received in the
Reorganization by Willowwood pursuant to a purchase agreement, option, pledge,
security agreement or any other type of instrument, other than pursuant to an
option, pledge and/or security agreement in a typical lending transaction
subject to customary commercial conditions which is described in section 1.382-
4(d)(7)(ii) of the Tax Regulations, and other than pursuant to rights the
partners of Willowwood may have pursuant to Willowwood's Agreement of Limited
Partnership.
IN WITNESS WHEREOF, I have executed this Representation Certificate as
of the 1st day of April, 1996.
Willowwood Partners, L.P.
By: ________________________________
Name: ______________________________
Its: General Partner
-1-
<PAGE> 1
EXHIBIT 99.5
LIBERTE INVESTORS
SPECIAL MEETING OF THE SHAREHOLDERS
ON AUGUST 15, 1996
To Our Clients:
We have enclosed the following documents relating to a special
meeting of the shareholders of Liberte Investors (the "Trust") on August 15,
1996 to vote upon: (i) the amendment to Section 8.2 of the Declaration of Trust
(as amended, the "Declaration of Trust") to enable the Trust to reorganize into
a Delaware corporation (the "Company"), (ii) the approval of a Plan of
Reorganization, under which the Trust will reorganize into the Company, and
(iii) the approval of a Stock Purchase Agreement, under which the Company will
sell shares of its common stock to Hunter's Glen/Ford, Ltd., an affiliate of
Mr. Gerald J. Ford, or a permitted assignee.
1. A Cover Letter from the Trust's Chief Executive Officer.
2. A Notice of the Special Meeting of Shareholders.
3. A Proxy Statement/Prospectus.
4. A Proxy Card.
5. A copy of the Trust's Annual Report on Form 10-K for the year
ended June 30, 1995, as amended.
6. A copy of the Trust's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996.
The Proxy Card is enclosed for your information only because
only the registered holders of the beneficial shares in the Trust may vote at
the meeting. As the registered holder of your shares, we request your
instructions concerning how you wish us to vote them. Please instruct us
concerning your wishes by completing this form and returning it to us in the
enclosed self-addressed envelope.
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<S> <C> <C>
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INSTRUCTIONS WITH RESPECT TO THE SPECIAL MEETING OF
THE SHAREHOLDERS OF LIBERTE INVESTORS
1. With respect to Proposal 1 concerning the proposal to amend Section 8.2 of the Declaration of Trust to
eliminate the requirement that an entity into which the Trust reorganizes have features similar to the Trust, and
permit such entity to have perpetual existence and broad operating authority, the undersigned instructs you to vote:
[ ] FOR approval of the [ ] AGAINST approval [ ] ABSTAIN from voting
amendment of the amendment for approval of the amendment
2. With respect to Proposal 2 concerning the proposal to approve the Plan of Reorganization, under which the
Trust will reorganize into a Delaware corporation, the undersigned instructs you to vote:
[ ] FOR approval of [ ] AGAINST approval [ ] ABSTAIN from voting for approval of
the Plan of Reorganization the Plan of Reorganization the Plan of Reorganization
3. With respect to Proposal 3 concerning the proposal to approve the Stock Purchase Agreement, under which
the Company will sell shares of Common Stock to the Purchaser that will constitute approximately 40% of the outstanding
shares immediately after the sale, the undersigned instructs you to vote:
[ ] FOR approval of [ ] AGAINST approval [ ] ABSTAIN from voting for approval of
the Stock Purchase Agreement the Stock Purchase Agreement the Stock Purchase Agreement
NAME:
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SIGNATURE: DATE:
----------------------------------------- -------------
TITLE (IF NOT AN INDIVIDUAL):
----------------------------------------
Unless otherwise indicated, these instructions shall be for all of the beneficial shares in the Trust that the
signatory beneficially owns.
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