<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- -----
SECURITIES EXCHANGE ACT OF 1934
FOR TRANSITION PERIOD FROM TO
----------- ----------
COMMISSION FILE NUMBER 1-6802
LIBERTE INVESTORS INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 75-1328153
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
600 N. PEARL ST., SUITE 420 75201
DALLAS, TEXAS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (214) 720-8950
Liberte Investors
(Former name, former address, and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- -------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES X* NO
------- -------
* The registrant's confirmed plan of reorganization under Chapter 11 of the
Bankruptcy code did not provide for the distribution of securities.
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of registrant's common stock $.01 par value as
of the close of business on November 12, 1996: 20,256,097 shares.
<PAGE>
LIBERTE INVESTORS INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition
September 30, 1996 and June 30, 1996............... 3
Consolidated Statements of Operations
Three Months Ended September 30, 1996 and 1995..... 4
Consolidated Statements of Cash Flows
Three Months Ended September 30, 1996 and 1995..... 5
Notes to Consolidated Financial Statements......... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.................................. 11
Item 2. Changes in Securities.............................. 11
Item 3. Defaults upon Senior Securities.................... 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information.................................. 12
Item 6. Exhibits and Reports on Form 8-K................... 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIBERTE INVESTORS INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
------------- -----------
<S> <C> <C>
Assets
Unrestricted cash and cash equivalents $ 50,000,927 $27,245,594
Restricted cash and cash equivalents 58,694 58,325
------------- -----------
Total cash and cash equivalents 50,059,621 27,303,919
Notes receivable, net 1,332,081 1,331,390
Foreclosed real estate held for sale 3,450,148 3,475,790
Accrued interest and other receivables 68,299 63,875
Other assets 687,840 1,179,277
------------- -----------
Total assets $ 55,597,989 $33,354,251
============= ===========
Liabilities and Stockholders' Equity
Liabilities
Accrued and other liabilities $ 347,590 $ 502,078
Stockholders' Equity
Common stock, $.01 par value,
50,000,000 shares authorized,
20,256,097 shares issued and outstanding 202,561 --
Shares of Beneficial Interest, no par value,
unlimited authorization, 12,423,208 shares
issued, 12,153,658 shares outstanding,
net of 269,550 shares held in treasury -- 32,852,173
Additional paid-in capital 309,490,145 --
Retained earnings (254,442,307) --
------------- -----------
Total stockholders' equity 55,250,399 32,852,173
------------- -----------
Total liabilities and stockholders' equity $ 55,597,989 $33,354,251
============= ===========
</TABLE>
See notes to unaudited consolidated financial statements.
3
<PAGE>
LIBERTE INVESTORS INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Income
Interest-bearing deposits in banks $ 480,519 $ 304,482
Notes receivable interest 39,499 120,420
Gain on sale of foreclosed real estate -- 6,840
Other 12,671 68,130
----------- -----------
Total income 532,689 499,872
----------- -----------
Expenses
Insurance 80,189 52,068
Compensation and employee benefits 66,291 100,100
Legal, audit and advisory fees 52,752 255,958
Foreclosed real estate operations 34,671 61,234
Provision for loan losses 380 --
General and administrative 42,448 60,176
----------- -----------
Total expenses 276,731 529,536
----------- -----------
Net income (loss) $ 255,958 $ (29,664)
=========== ===========
Net income (loss) per share
of Common Stock (Beneficial Interest in 1995) $.02 $(.00)
Weighted average number of shares
of Common Stock (Beneficial Interest in 1995) 16,204,878 12,153,658
</TABLE>
See notes to unaudited consolidated financial statements.
4
<PAGE>
LIBERTE INVESTORS INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
---------------------------
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating
activities:
Net income (loss) $ 255,958 $ (29,664)
Adjustments to reconcile
net income (loss) to
net cash provided
by (used in) operating
activities:
Amortization of discount
on notes receivable (4,730) --
Increase in accrued
interest and other
receivables (4,424) (28,557)
Decrease (increase)
in other assets 71,252 (2,163)
(Decrease) increase in accrued
and other liabilities (154,488) 32,007
Gains from disposition of
foreclosed real estate -- (6,840)
----------- -----------
Net cash provided by (used in)
operating activities 163,568 (35,217)
----------- -----------
Cash flows from investing activities:
Collections on notes receivable 4,039 128,415
Collections on RPI note receivable -- 118,773
Sales of foreclosed real estate 25,642 68,403
(Increase) decrease in restricted
cash investments (369) 375
----------- -----------
Net cash provided by
investing activities 29,312 315,966
----------- -----------
Cash flows from financing activities:
Issuance of newly issued shares
of Common Stock to Hunter's Glen 23,091,951 --
Capitalization of acquisition costs (529,498) --
----------- -----------
Net cash provided by
financing activities 22,562,453 --
----------- -----------
Net increase in unrestricted cash and
cash equivalents 22,755,333 280,749
Unrestricted cash and cash equivalents
at beginning of period 27,245,594 20,576,517
----------- -----------
Unrestricted cash and cash equivalents
at end of period $50,000,927 $20,857,266
=========== ===========
Schedule of non-cash investing
activities:
Reclassification of acquisition
costs to additional paid-in capital $ 420,185 $ --
Charge-offs to allowance for
possible losses, net -- 10,392,517
</TABLE>
See notes to unaudited consolidated financial statements.
5
<PAGE>
LIBERTE INVESTORS INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED SEPTEMBER 30, 1996)
Note A - Organization
In April 1996, Liberte Investors, a Massachusetts business trust (the "Trust"),
formed Liberte Investors Inc., a Delaware corporation (the "Company"). At a
special meeting of the shareholders of the Trust held on August 15, 1996 (the
"Special Meeting"), the Trust's shareholders approved the reorganization of the
Trust into the Company (the "Reorganization"). To effect the Reorganization,
the Trust contributed its assets to the Company and received all of the
Company's common stock, par value $.01 per share ("Shares" or "Common Stock")
outstanding at the time of the Reorganization, which the Trust then distributed
to its shareholders in redemption of all outstanding shares of beneficial
interest in the Trust (a "Beneficial Share"). The Company assumed all of the
Trust's outstanding liabilities and obligations. Immediately thereafter, the
Trust was terminated.
Unless otherwise indicated, the information contained in the Form 10-Q which
relates to periods prior to August 16, 1996 is information relating to the
Trust, and information relating to periods on and after August 16, 1996 is
information relating to the Company.
Note B - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X and therefore do not include all of the information and footnotes
necessary for a fair presentation of financial condition, results of operations,
and cash flows in conformity with generally accepted accounting principles. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended September 30, 1996, are not
necessarily indicative of the results that may be expected for the fiscal year
ending June 30, 1997.
The accompanying financial statements include the accounts of the Company and
LNC Holdings, Inc., a wholly-owned subsidiary whose sole asset is approximately
40 acres of land located in Arlington, Texas. All intercompany balances and
transactions have been eliminated.
Note C - Stock Purchase Agreement
On January 16, 1996, the Trust entered into a Stock Purchase Agreement (as
amended, the "Stock Purchase Agreement") with Hunter's Glen/Ford, Ltd., a Texas
limited partnership ("Hunter's Glen"), pursuant to which the Trust agreed to
sell 8,102,439 newly issued Shares to Hunter's Glen for $23,091,951,
representing a purchase price of $2.85 per Share (the "Purchase"). The Purchase
was approved by the Trust's shareholders at the Special Meeting and consummated
on August 16, 1996. After the Purchase, Hunter's Glen owns 40% of the
outstanding Shares. Mr. Gerald J. Ford is a general partner of Hunter's Glen
and is the sole shareholder of Ford Diamond Corporation, the only other general
partner of Hunter's Glen.
Immediately prior to the sale of the Shares pursuant to the Stock Purchase
Agreement, the Trust reorganized into the Company, which succeeded to all of the
Trust's assets and liabilities. Upon such reorganization, shareholders of the
Trust became shareholders of the Company on a share for share basis and Mr. Ford
became the Chief Executive Officer and Chairman of the Board of the Company.
6
<PAGE>
Note D - Registration Rights
In connection with the Purchase, Hunter's Glen and the Company entered into a
Registration Rights Agreement (the "Purchaser Registration Rights Agreement"),
pursuant to which Hunter's Glen and certain subsequent holders of the shares of
Common Stock (the "Hunter's Glen Shares") acquired in the Purchase were granted
certain registration rights with respect to such shares until (i) such shares
have been sold pursuant to a resale registration statement filed with the
Securities and Exchange Commission, (ii) such shares have been sold under the
safe-harbor provision of Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act"), or (iii) such shares have been otherwise transferred and
the Company has issued new stock certificates representing such shares without a
legend restricting further transfer. The holders of not less than 20% of the
Hunter's Glen Shares may require the Company to file a shelf registration
statement registering their sale of such shares. The Company will be required
to maintain the effectiveness of such registration statement for two years. In
addition, the holders of not less than 20% of the Hunter's Glen Shares may make
two demands upon the Company to register their sale of such shares in
underwritten offerings, provided that the shares to be sold have a fair market
value in excess of $5.0 million. Finally, the holders of the Hunter's Glen
Shares may require the Company to register the sale of their shares if the
Company proposes to file a registration statement under the Securities Act for
its account or the account of its securityholders, other than a registration
statement concerning a business combination, an exchange of securities or an
employee benefit plan. The holders of these registration rights may exercise
them at any time during the period beginning on August 16, 1997 and ending when
the holders of such shares own an aggregate of less than 5% of the outstanding
Shares and are no longer affiliates of the Company under the United States
federal securities laws. The Company will bear all of the expenses of these
registrations, except any underwriters' commissions, discounts and fees, and the
fees and expenses of any legal counsel to the holders of the Hunter's Glen
Shares.
At the closing of the Purchase, Hunter's Glen, the Company and certain other
persons entered into an Agreement Clarifying Registration Rights (the "Agreement
Clarifying Registration Rights"). Under this agreement, the registration rights
that the Trust had previously extended to 400,000 Beneficial Shares owned by the
Enloe Descendants' Trust were extended to the 759,000 Shares that the Enloe
Descendants' Trust, Mr. Robert Ted Enloe, III and his wife owned upon the
consummation of the Reorganization and the Purchase. The Agreement Clarifying
Registration Rights also defined the relationship between these registration
rights and the registration rights extended under the Purchaser Registration
Rights Agreement. The Agreement Clarifying Registration Rights generally
permits Hunter's Glen to require the Company to register the sale of its shares
in connection with any exercise of demand registration rights by the Enloe
Descendants' Trust, and permits the Enloe Descendants' Trust, Mr. Enloe and his
wife to require the Company to register the sale of their shares in connection
with any exercise of demand registration rights by Hunter's Glen. In addition,
this Agreement provides that the Enloe Descendants' Trust, Mr. Enloe, his wife
and Hunter's Glen will not publicly sell their Shares during the period
beginning ten days before the filing of a registration statement in connection
with certain underwritten offerings and ending ninety days after the effective
date of such registration statement. Finally, The Agreement Clarifying
Registration Rights provides that the registration rights with respect to the
Shares held by the Enloe Descendants' Trust, Mr. Enloe and his wife will be
transferable to the subsequent holders of such shares.
NOTE E - Share Transfer Restrictions
The Company's Certificate of Incorporation (the "Charter") contains prohibitions
on the transfer of the Shares to avoid limitations on the use of the net
operating loss carryforwards and other federal income tax attributes that the
Company inherited from the Trust. The Charter generally prohibits any transfer
of Shares, any other subsequently issued voting stock or stock that
participates in the earnings or growth of the Company, and certain options with
respect to such Shares or stock, if the transfer of such Shares or stock would
cause any group or person to own 4.9% or more of the outstanding shares of,
increase the ownership
7
<PAGE>
position of any person that already owns 4.9% or more (by aggregate value) of
the outstanding shares of such stock, or cause any person to be treated like the
owner of 4.9% or more (by aggregate value) of the outstanding shares of such
stock for tax purposes. Transfers in violation of this prohibition will be void,
unless the Board of Directors consents to the transfer. If void, upon demand by
the Company, the purported transferee must return the shares to the Company's
agent to be sold, or if already sold the purported transferee must forfeit some,
or possibly all, of the sale proceeds. In addition, in connection with certain
changes in the ownership of the holders of the Company's shares, the Company may
require the holder to dispose of some or all of such shares. For this purpose,
"person" is defined broadly to mean any individual, corporation, estate, debtor,
association, company, partnership, joint venture, or similar organization.
Note F - Foreclosed Real Estate Held For Sale
At September 30, 1996, the Company held assets to be disposed of consisting of
foreclosed real estate in the form of developed single-family lots and land.
The September 30, 1996, carrying amount of these assets was $3,450,000. The
carrying value of the single family lots was $635,000 at September 30, 1996.
The remaining balance of the Company's foreclosed real estate consists of 14
parcels of land totaling approximately 603 acres in San Antonio, Texas.
Note G - Reclassifications
Certain reclassifications were made in previously issued financial statements to
conform to the September 30, 1996 presentation.
Note H - Commitments and Contingencies
At September 30, 1996, the Company had commitments for indemnification of
development bond issuers and other guarantees totaling $102,400.
The Company's wholly owned subsidiary, LNC Holdings, Inc., is the owner of
approximately 40 acres of land located in Arlington, Texas which is encumbered
by local property tax liens of $876,000. The Company believes that the tax
liens will ultimately be repaid from the proceeds of the sale of all or a
portion of the encumbered property.
Cash and cash equivalents at September 30, 1996, included restricted cash of
$58,694 for unpaid claims related to the Trust's previous bankruptcy. At June
30, 1996, restricted cash included $58,325 for such claims.
The Company is involved in routine litigation incidental to its business, which,
in the opinion of management, will not result in a material adverse impact on
the Company's financial condition, results of operations, or cash flows.
Note I - Federal Income Taxes
Though the Company had net income for the three months ended September 30, 1996,
no tax liability has been recognized. At June 30, 1996, the Company had, for
federal tax purposes, net operating loss carryforwards in excess of $225 million
which expire at various times between the years 2005 and 2011 and which are in
sufficient amount to mitigate any significant tax liability for fiscal year
1997.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the three months ended September 30, 1996 was $255,958, compared
to a net loss of $29,664 for the same period in 1995. The substantial change in
operating results for the three months was due to various factors discussed
below.
Interest income related to interest-bearing deposits in banks increased to
$481,000 for the three months ended September 30, 1996 from $304,000 for the
same period in 1995. This increase is due to a growth in the balance of
unrestricted cash and cash equivalents to $50.0 million for the three months
ended September 30, 1996, from $20.9 million for the same period in 1995. The
increase in unrestricted cash and cash equivalents is primarily due to the
repurchase of the Resurgence Properties, Inc. ("RPI") note receivable by RPI for
$4.1 million on June 27, 1996 and the sale of 8,102,439 shares of newly issued
Common Stock for $23.1 million to Hunter's Glen. See Note C - Notes to
Consolidated Financial Statements.
Notes receivable interest income decreased to $39,000 for the three months ended
September 30, 1996 from $120,000 for the same period in 1995, as a result of a
lower outstanding balance of notes receivable. Notes receivable decreased to
$1.3 million for the three months ended September 30, 1996 from $5.5 million for
the same period in 1995. The reduction in notes receivable is primarily due to
the repurchase of the RPI note receivable by RPI for $4.1 million on June 27,
1996 representing 98.75% of the outstanding balance of the RPI note in a
negotiated transaction between the Trust and RPI.
The gain on sale of foreclosed real estate for the three months ended September
30, 1995 of $6,800 represents proceeds received from the sale of foreclosed
real estate in excess of its carrying value.
Other income decreased to $13,000 for the three months ended September 30, 1996
from $68,000 for the same period in 1995. Other income for the three months
ended September 30, 1995 primarily consisted of cash collections on impaired
loans which had no carrying value. There were no such collections during the
three months ended September 30, 1996.
Insurance expense increased to $80,000 for the three months ended September 30,
1996, as compared to $52,000 for the same period in 1995. The increase is
primarily due to increased premiums related to Directors' and Officers'
insurance resulting from an increase in the coverage amount as required by the
Stock Purchase Agreement.
Compensation and employee benefits decreased by $34,000 from $100,000 during the
three months ended September 30, 1995 to $66,000 for the same period in 1996.
The decrease is due to a reduced compensation package for the Trust's Chief
Financial Officer, Robert Ted Enloe III, beginning in the last quarter of fiscal
1996, as well as, the resignations of the Company's six employees, including Mr.
Enloe, on August 31, 1996.
Legal, audit and advisory fees were $53,000 for the three months ended September
30, 1996, a decrease of $203,000 from the same period in 1995. Prior period
activity included expenses incurred by the Trust related to potential
acquisition candidates.
Foreclosed real estate operation expenses decreased $26,000 from $61,000 for the
three months ended September 30, 1995 to $35,000 for the same period in 1996.
The decrease is due to a reduction in the size of the real estate portfolio from
sales of operating real estate properties during fiscal 1996. Foreclosed real
estate operations includes property taxes and costs to maintain the properties.
9
<PAGE>
General and administrative expenses were reduced to $42,000 for the three months
ended September 30, 1996 compared to $60,000 for the same period in 1995. Prior
year activity included expenses related to a retirement benefit for one of the
Trust's directors which was fully accrued during the second quarter of fiscal
1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal funding requirements are operating expenses, including
legal, audit, and advisory expenses expected to be incurred in connection with
evaluation of potential acquisition candidates and other strategic
opportunities. The Company anticipates that its primary sources of funding
operating expenses are principal and interest collections on notes receivable,
proceeds from the sale of foreclosed real estate, income on cash and cash
equivalents, and cash on hand.
As described in Note C to the financial statements, the Trust entered into an
agreement and subsequently consummated the sale of newly issued Shares to
Hunter's Glen. The proceeds from this sale were $23.1 million. Management
believes that the additional cash will assist the Company in its efforts to
expand its business through acquisitions. Hunter's Glen is an affiliate of Mr.
Gerald J. Ford, who became the Chief Executive Officer and Chairman of the Board
of the Company following the Trust's reorganization into the Company and the
sale of the Shares to Hunter's Glen.
SHARE TRANSFER RESTRICTIONS
In order to avoid limitations on the use of the Company's tax attributes, the
Company's Certificate of Incorporation prohibits the transfer of the Shares, any
other subsequently issued voting stock or stock that participates in the
earnings or growth of the Company, and certain options with respect to such
Shares or stock, if the transfer of such Shares or stock would cause any group
or person to own 4.9% or more of the outstanding shares, or increase the
ownership position of any person or group that already owns 4.9% or more of the
outstanding shares of such stock, or cause any person or group to be treated
like the owner of 4.9% or more of the outstanding shares of such stock for tax
purposes. For this purpose, "person" is defined broadly to mean any individual,
corporation, estate, debtor, association, company, partnership, joint venture,
or similar organization. See Note E - Notes to Consolidated Financial
Statements.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
In April 1996, Liberte Investors, the Trust, formed Liberte Investors
Inc., the Company. At the Special Meeting of the shareholders of the
Trust held on August 15, 1996, the Trust's shareholders approved the
Reorganization of the Trust into the Company. To effect the
Reorganization, the Trust contributed its assets to the Company and
received all of the Company's Common Stock outstanding at the time of
the Reorganization, which the Trust then distributed to its shareholders
in redemption of all Beneficial Shares. The Company assumed all of the
Trust's outstanding liabilities and obligations. Immediately thereafter,
the Trust was terminated. Upon such reorganization, shareholders of the
Trust became shareholders of the Company on a share for share basis.
At the Special Meeting, the Trust's shareholders also approved the Stock
Purchase Agreement pursuant to which the Company subsequently sold
8,102,439 newly issued shares of Common Stock to Hunter's Glen at a
purchase price of $2.85 per share. The Purchase was consummated on
August 16, 1996. Mr. Gerald J. Ford, who is the Company's Chief
Executive Officer and Chairman of the Board, is a general partner of
Hunter's Glen and is the sole shareholder of Ford Diamond Corporation,
the only other general partner of Hunter's Glen. As such, Mr. Ford
possesses sole voting and investment control over the shares of Common
Stock owned by Hunter's Glen.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
A special meeting of the Trust's shareholders was held by the Trust on
August 15, 1996 for the purpose of voting on three proposals. The
proposals, including the results of the voting, are as follows:
Proposal No. 1. 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 similiar to
the Trust, and permit such entity to have perpetual
existence and broad operating authority.
<TABLE>
<CAPTION>
Percentage of
Number of Outstanding
Benefical Shares Beneficial Shares
---------------- -----------------
<S> <C> <C>
For 8,488,744 69.84%
Against 74,992 .62%
Abstain 40,187 .33%
</TABLE>
11
<PAGE>
Proposal No. 2. Proposal to approve the Plan of Reorganization, under
which the Trust will reorganize into a Delaware
corporation.
<TABLE>
<CAPTION>
Percentage of
Number of Outstanding
Benefical Shares Beneficial Shares
---------------- -----------------
<S> <C> <C>
For 8,474,909 69.73%
Against 98,818 .81%
Abstain 30,196 .25%
</TABLE>
Proposal No. 3. Proposal to approve the Stock Purchase Agreement, under
which the Company sold 8,102,439 shares of Common Stock
to Hunter's Glen which shares will constitute
approximately 40% of the outstanding shares of Common
Stock immediately after the sale.
<TABLE>
<CAPTION>
Percentage of
Beneficial Shares
Number of Represented
Benefical Shares at the Meeting
---------------- -----------------
<S> <C> <C>
For 8,451,709 98.23%
Against 114,937 1.34%
Abstain 37,277 .43%
</TABLE>
The total number of Beneficial Shares voted on Proposals No. 1, 2, and 3
was 8,603,923 equal to approximately 70.79% of the outstanding Beneficial
Shares.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27.1 Financial Data Schedules (included only in the EDGAR filing).
(b) Reports on Form 8-K:
On September 3, 1996, the Company filed a report on Form 8-K to report that
on August 15, 1996, the Trust's shareholders approved an amendment to the
Trust's Declaration of Trust permitting it to reorganize into the Company,
the reorganization of the Trust into the Company, and the sale of
8,102,439 newly issued shares of the Company's Common Stock to Hunter's
Glen. On August 16, 1996, the Trust consummated its reorganization and
closed the sale to Hunter's Glen.
12
<PAGE>
It is anticipated that the Company will file a report on Form 8-K on
November 18, 1996 to report the change in independent accountants of the
Company from Ernst & Young LLP ("E&Y") to KPMG Peat Marwick LLP. No report
of E&Y on the Company's financial statements for either of the past two
fiscal years contained an adverse opinion or a disclaimer of opinion, or
was qualified or modified as to uncertainity, audit scope or accounting
principles. Further, there were no disagreements with E&Y on any matter of
accounting principles or practices, financial statement disclosure or
auditing scope of procedure, which disagreements, if not resolved to the
satisfaction of E&Y, would have caused it to make reference to the subject
matter of the disagreements in its reports.
13
<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 thereunder duly authorized.
LIBERTE INVESTORS INC.
November 13, 1996 By: /s/ Gerald J. Ford
------------------------------------------------
Gerald J. Ford
Chief Executive Officer and Chairman of the Board
November 13, 1996 By: /s/ Melinda G. Heika
------------------------------------------------
Melinda G. Heika
Principal Accounting Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS DATED AS OF SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 50,059,621
<SECURITIES> 0
<RECEIVABLES> 2,088,220
<ALLOWANCES> 0
<INVENTORY> 3,450,148
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 55,597,989
<CURRENT-LIABILITIES> 347,590
<BONDS> 0
0
0
<COMMON> 202,561
<OTHER-SE> 55,047,838
<TOTAL-LIABILITY-AND-EQUITY> 55,597,989
<SALES> 0
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<INCOME-CONTINUING> 255,958
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<NET-INCOME> 255,958
<EPS-PRIMARY> .02
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</TABLE>
