<PAGE>
===========================================================================
UNITED STATES 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: December 12, 1997
-----------------
ATLANTIC CENTRAL ENTERPRISES LIMITED
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Bermuda 0-21891 [Not Applicable]
- -----------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File No.) Identification No.)
Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (441) 295-2244
--------------
(Not Applicable)
- -----------------------------------------------------------------------------
(Former name or former address, if changed since last report)
===========================================================================
<PAGE>
ATLANTIC CENTRAL ENTERPRISES LIMITED
ITEM 5. OTHER EVENTS.
Management of Atlantic Central Enterprises Limited (the
"Company") discovered for the first time on December 12, 1997 that its
former U.S. counsel, Kevin J. Quinn of Santa Monica, California,
fraudulently caused 960,000 newly issued and freely-tradable shares of
the Company's common stock to be issued to Mr. Quinn, his affiliate or
to his brokerage account in Vancouver, Canada, during the period from
March 25, 1997 through July 31, 1997. This information was discovered
by the Company in the course of assembling data from the Company's
transfer agent for the Company's audited financial statements. As a
result, records of the transfer agent indicate there are currently
2,662,396 shares outstanding of the Company's common stock including
the 960,000 shares issued without consideration at Mr. Quinn's
fraudulent instructions and without the prior authorization or
knowledge of the Company's board of directors and management.
This discovery follows the termination in 1997 of Mr. Quinn's
relationship with the Company. Mr. Quinn acted as U.S. corporate and
securities counsel to the Company and its predecessor, Pharma Patch
PLC, from 1993 until approximately June 1997. The Company learned of
an article in the November 1997 issue of the California Bar Journal
reporting that Kevin J. Quinn had been suspended from the practice of
law in 1993 as a result of a 1992 felony conviction for embezzlement
and that he was permanently disbarred by the California State Bar in
September 1997. Those facts had not been previously disclosed to any
officers or directors of Pharma Patch PLC from the time of its
inception in 1993 or to management of Atlantic Central since its
inception in 1996.
When confronted with these disclosures, recent correspondence
from Mr. Quinn to the Company's new counsel does not deny his 1992
conviction, his 1993 suspension from the practice of law or that he
was disbarred in September 1997. The California Bar court is quoted in
the California Bar Journal article as stating that other acts of Mr.
Quinn, unrelated to the Company, "clearly involved moral turpitude and
dishonesty" and "they are of the most grievous and reprehensible
nature. In fact, in reviewing past attorney discipline precedents, it
is difficult to find one as serious as (Quinn's) misdeeds in the
(embezzlement) matter alone." The Company notes that notwithstanding
his suspension from the practice of law since 1993, Mr. Quinn
continues to be listed as a practicing attorney in California by the
Martindale-Hubbell Law Directory.
Principal officers of Pharma Patch and Atlantic Central during
Mr. Quinn's representation of the Company, Messrs. Murray D. Watson
and Kenneth G. Howling, former Chief Executive Officer and former
Chief Financial Officer of Pharma Patch and Atlantic Central,
respectively, jointly stated "We were both surprised and horribly
shocked to learn that Kevin Quinn had been suspended from the practice
of law sometime in 1993 and has abused his position of trust to
misappropriate the Company's securities. In addition to serving as
U.S. counsel, he served initially as an officer and later as a
director of both corporations until resigning from those positions
effective June 4, 1997. We did not suspect there were any problems
with Kevin until a source in the United States noticed and provided us
with a copy of the November 1997 California Bar Journal article."
-2-
<PAGE>
The Vancouver brokerage firm that is reported to have received
all or most of the fraudulently issued shares advised the Company last
Friday that it currently has no position in the Company's securities.
The Company's transfer agent likewise has confirmed that none of the
original registered owners of those shares are currently listed as
record owners of the Company's common stock. This information leads
the Company to believe, at present, that the fraudulently issued
securities all were sold for Mr. Quinn's account, and the Company is
continuing its investigation.
The Company has demanded full restitution from Mr. Quinn of all
legal fees and expenses previously paid for Mr. Quinn's account and an
accounting and restitution or damages for the fraudulently issued
shares. It has authorized legal counsel to immediately institute
appropriate legal proceedings and intends to vigorously prosecute its
claims.
Patrick J. Rooney, President of Atlantic Central, has been
travelling abroad for several months and could not be contacted for
comment. During his absence, Messrs. Larry F. Lang and Jeffrey
Dickson are serving as an acting committee for the office of the Chief
Executive Officer. Mr. Howling resigned as the Company's Chief
Financial Officer on November 14, 1997 to accept another employment
offer, and Allan W. Leppik has been appointed Vice President of
Finance and Chief Financial Officer to replace Mr. Howling.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) EXHIBITS: The following exhibits are filed with this Report.
# Indicates exhibit filed with this Report
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ ---------------------------------------------------
<S> <C>
# 99 Registrant's Press Release dated December 16, 1997.
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: December 16, 1997
ATLANTIC CENTRAL ENTERPRISES LIMITED
(Registrant)
By: /s/ Allan W. Leppik
-----------------------------
Allan W. Leppik,
Vice President of Finance
and Chief Financial Officer
-3-
ATLANTIC CENTRAL ENTERPRISES, LTD.
FOR IMMEDIATE RELEASE
- ---------------------
ATLANTIC CENTRAL ENTERPRISES DISCOVERS FRAUDULENT CONDUCT
OF FORMER U.S. COUNSEL
Hamilton, Bermuda, December 16, 1997 -- Atlantic Central
Enterprises Limited (NASD Bulletin Board Symbol "ALCN") announced it
discovered at the end of last week that its former U.S. counsel, Kevin
J. Quinn of Santa Monica, California, fraudulently caused 960,000
newly issued and freely-tradable shares of the Company's common stock
to be issued to Mr. Quinn, his affiliate or to his brokerage account
in Vancouver, Canada, during the period from March 25, 1997 through
July 1997. This information was discovered by the Company in the
course of assembling data from the Company's transfer agent for the
Company's audited financial statements. As a result, records of the
transfer agent indicate there are currently 2,662,396 shares
outstanding of the Company's common stock, including the 960,000
shares issued without consideration at Mr. Quinn's fraudulent
instructions and without the prior authorization or knowledge of the
Company's board of directors and management.
This discovery follows the termination during 1997 of Mr. Quinn's
relationship with the Company. Mr. Quinn acted as U.S. corporate and
securities counsel to the Company and its predecessor, Pharma Patch
PLC, from 1993 until approximately June 1997. The Company recently
learned of an article in the November 1997 issue of the California Bar
Journal reporting that Kevin J. Quinn had been suspended from the
practice of law in 1993 as a result of a 1992 felony conviction for
embezzlement, and that he was permanently disbarred by the California
State Bar in September 1997. Those facts had not been previously
disclosed to any officers or directors of Pharma Patch PLC from the
time of its inception in 1993 or to management of Atlantic Central
since its inception in 1996.
The California Bar court is quoted in the Bar Journal article as
stating that other acts of Mr. Quinn, unrelated to the Company,
"clearly involved moral turpitude and dishonesty" and "they are of the
most grievous and reprehensible nature. In fact, in reviewing past
attorney discipline precedents, it is difficult to find one as serious
as (Quinn's) misdeeds in the (embezzlement) matter alone." The
Company notes that notwithstanding his suspension from the practice of
law since 1993, Mr. Quinn continues to be listed as a practicing
attorney in California by the Martindale-Hubbell Law Directory.
Principal officers of Pharma Patch and Atlantic Central during
Mr. Quinn's representation of the Company, Messrs. Murray D. Watson
and Kenneth G. Howling, former Chief Executive Officer and former
Chief Financial Officer of Pharma Patch and Atlantic Central,
respectively, jointly stated "We were both surprised and horribly
shocked to learn that Kevin Quinn had been suspended from the practice
of law sometime in 1993 and has abused his position of trust to
misappropriate the Company's securities. In addition to serving as
<PAGE>
Page 2
Press Release -- Atlantic Central Enterprises Limited
U.S. counsel, he served initially as an officer and later as a
director of both corporations until resigning from those positions
effective June 4, 1997. We did not suspect there were any problems
with Kevin until a source in the United States noticed and provided us
with a copy of the November 1997 California Bar Journal article."
Patrick J. Rooney, President of Atlantic Central, has been
travelling abroad and could not be contacted for comment. During his
absence, Messrs. Larry F. Lang and Jeffrey Dickson are serving as an
acting committee for the office of the Chief Executive Officer.
The Vancouver brokerage firm that is reported to have received
all or most of the fraudulently issued shares advised the Company last
Friday that it currently has no position in the Company's securities.
The Company's transfer agent likewise has confirmed that none of the
original registered owners of those shares are currently listed as
record owners of the Company's common stock. This information leads
the Company to believe, at present, that the fraudulently issued
securities all were sold for Mr. Quinn's account, and the Company is
continuing its investigation.
The Company has demanded full restitution from Mr. Quinn of all
legal fees and expenses previously paid for Mr. Quinn's account and an
accounting and restitution or damages for the fraudulently issued
shares. It has authorized legal counsel to immediately institute
appropriate legal proceedings and intends to vigorously prosecute its
claims.
Atlantic Central Enterprises Limited
Contact at (714) 831-0400
William M. Curtis, Special Counsel
