<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Wilshire Financial Services Group Inc.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
971867106
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(CUSIP Number)
Wilshire Real Estate Investment Trust Inc.
1776 S.W. Madison Street
Portland, Oregon 97205
(503) 223-5600
with a copy to:
Daniel E. Titelbaum, Esq.
Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, California 94104
(415) 772-6000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 10, 1999
-------------
(Date of Event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
(Continued on following pages)
(Page 1 of 12 pages)
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
- ---------------------------- ------------------------------------
CUSIP No. 971867106 Page 2 of 12 Pages
- ---------------------------- ------------------------------------
<S> <C> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wilshire Real Estate Investment Trust Inc.
EIN: 52-2081138
- ------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX, IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
- ------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
Maryland
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7 SOLE VOTING POWER
None
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NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED 2,874,791
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BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH None
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,874,791
- ------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,874,791
- ------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
- ------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.35%
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14 TYPE OF REPORTING PERSON*
CO
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE,
AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
<TABLE>
<CAPTION>
CUSIP No. 971867106 Page 3 of 12 Pages
- ---------------------------- ------------------------------------
<S> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wilshire Real Estate Partnership, L.P.
EIN: 93-1236269
- ------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX, IF A MEMBER OF A GROUP*
(a) [X]
(b) [_]
- ------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS OR
2(d) OR 2(e)
- ------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Delaware
- ------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
None
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NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED 2,874,791
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BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH None
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10 SHARED DISPOSITIVE POWER
2,874,791
- ------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,874,791
- ------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
- ------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.35%
- ------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE,
AND THE SIGNATURE ATTESTATION.
<PAGE>
INTRODUCTION
This Schedule 13D is filed by Wilshire Real Estate Investment Trust Inc., a
corporation formed under the laws of the State of Maryland ("WREI"), and
Wilshire Real Estate Partnership, L.P., a limited partnership formed under the
laws of the State of Delaware ("WREP" and together with WREI, the "Reporting
Persons").
Item 1. Security and Issuer
Common Stock, par value $0.01
Wilshire Financial Services Group Inc.
1776 S.W. Madison Street
Portland, Oregon 97205
Item 2. Identity and Background
Name: Wilshire Real Estate Investment Trust Inc.
State of Organization: Maryland
Business: Diversified financial services company
Address: 1776 S.W. Madison Street
Portland, Oregon 97205
Criminal convictions: None.
Civil proceedings: None.
Name: Wilshire Real Estate Partnership, L.P.
State of Organization: Delaware
Business: Operating partnership of WREI
Address: 1776 S.W. Madison Street
Portland, Oregon 97205
Criminal convictions: None.
Civil proceedings: None.
WREI is the general partner and holder of 99.9% of the partnership interests of
WREP. The name, address, present principal occupation and citizenship of each of
the executive officers and members of the Board of Directors of WREI are set
forth on Schedule 1 hereto.
Item 3. Source and Amount of Funds or Other Consideration
June 10, 1999 was the effective date of the Prepackaged Plan of
Reorganization under Chapter 11 Title 11, United States Code, 11 U.S.C.
(S)(S) 101 et seq. (the "Plan") of Wilshire Financial Services Group
-- ---
Inc.(as reorganized from and after the effective date of the Plan, the
"Issuer"). At the effective date, the Reporting Persons acquired
2,874,791 shares (the "Shares") of the common stock, par value
<PAGE>
$.01 per share (the "New Common Stock") of the Issuer upon conversion,
under the Plan, of a total of $21,408,333, in principal plus accrued
but unpaid interest, of the Issuer's 13% Series B Notes due 2004, and a
total of $8,486,755 in principal amount of unsecured intercompany
receivables.
Item 4. Purpose of Transaction
The Reporting Persons acquired the Shares under and by virtue of the
terms of the Plan. The Reporting Persons are presently evaluating what
actions, if any, to take with respect to their holdings in the Issuer and
have hired a financial advisor for that purpose. In particular, the
Reporting Persons are evaluating whether to acquire more shares of New
Common Stock of the Issuer, maintain their current holdings, or sell some
or all of their current holdings of New Common Stock.
In January, 1999 WREP, the Issuer and Wilshire Acquisitions Corporation, a
Nevada corporation wholly-owned by the Issuer ("WAC") entered into an
agreement under which WREP agreed to provide a $5,000,000 interim credit
facility to the Issuer, bearing interest at a rate of 12% per year and
maturing on February 29, 2004. The Issuer and the Reporting Persons
entered into a letter agreement dated January 19, 1999 (the "Financing
Agreement"), under which WREP agreed to provide a debtor-in-possession
term credit facility (the "DIP Facility") in the aggregate principal
amount of up to $10,000,000 to the Issuer, of which $5,000,000 has been
funded and used by the Issuer to repay the interim credit facility
referred to above. The DIP Facility is secured by liens on the capital
stock of WAC held by the Issuer and the capital stock of First Bank of
Beverly Hills, F.S.B., a federally-chartered savings institution wholly-
owned by WAC
<PAGE>
("First Bank"). The DIP Facility bears interest at a rate of 12% per year
and matures on February 29, 2004.
Additionally, under the Financing Agreement, on the effective date of the
Plan WREI acquired $8,486,754 in principal amount of the Issuer's 6%
Convertible PIK Notes due 2006 (the "New Notes") in exchange for
obligations representing unsecured intercompany receivables owed by the
Issuer to the Reporting Persons. WREI may elect to convert the New Notes
into New Common Stock upon receipt of a notice of redemption of the New
Notes by the Issuer.
WREI has proposed to convert the New Notes and the $5,000,000 outstanding
under the DIP Facility into New Common Stock as set forth in the letter to
independent directors of WREI dated May 11, 1999, a copy of which is
attached hereto as Exhibit 4(1).
Pursuant to an Order by the Director of the Office of Thrift Supervision
("OTS") dated May 20, 1999, the Reporting Persons intend to file with the
OTS, on or before June 19, 1999, a holding company application in
connection with their acquisition of New Common Stock under the Plan. The
Reporting Persons do not presently plan to rebut the presumption of
control contained in 12 C.F.R. Section 574.4.
Andrew A. Wiederhorn serves as Chairman of the Board and Chief Executive
Officer of both the Issuer and the WREI. Lawrence A. Mendelsohn serves as
a director and President of both the Issuer and WREI. Chris Tassos serves
as Executive Vice President and Chief Financial Officer of both the Issuer
and WREI. Bo G. Aberg serves as Senior Vice President, Europe of both the
Issuer and WREI.
Except as set forth above, the Reporting Persons do not presently have any
plan or proposal to:
(a) acquire additional securities of the Issuer, or dispose of securities
of the Issuer;
(b) conduct any extraordinary corporate transaction, such as a merger,
reorganization or liquidation, with respect to the Issuer;
(c) sell or transfer a material amount of the assets of the Issuer or of
any of its subsidiaries;
(d) change the present board of directors or management of the Issuer,
including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the board;
(e) make any material change in the present capitalization or dividend
policy of the Issuer;
(f) cause any other material change in the Issuer's business or corporate
structure;
(g) change the Issuer's charter, bylaws or instruments corresponding
thereto or take other actions which may impede the acquisition of control
of the Issuer by any person;
(h) cause a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) cause a class of equity securities of the Issuer to become eligible
for termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended; or
<PAGE>
(j) take any action similar to those enumerated above.
Item 5. Interest in Securities of Issuer
The aggregate number of securities and percentage of the class of
securities of the Issuer beneficially owned by each Reporting Person named in
Item 2, as well as the number of securities as to which such person is deemed to
have sole power to vote or to direct the vote, shared power to vote or to direct
the vote, sole power to dispose or to direct the disposition, or shared power to
dispose or direct the disposition, is set forth in the following table:
<TABLE>
<CAPTION>
Power to Vote Power to Dispose
------------- ----------------
No. of Percent of
------ ----------
Person Securities Sole Shared Sole Shared Class
------ ---------- ---- ------ ---- ------ -----
Beneficially
------------
Owned
-----
<S> <C> <C> <C> <C> <C> <C>
Wilshire Real Estate 2,874,791 0 2,874,791 0 2,874,791 14.35%
Investment Trust Inc.
Wilshire Real Estate 2,874,791 0 2,874,791 0 2,874,791 14.35%
Partnership, L.P.
Andrew A. Wiederhorn 0 24,047 0 24,047 0 *
Lawrence A. Mendelsohn 0 9,553 0 9,553 0 *
Chris Tassos 0 62 0 62 0 *
Bo G. Aberg 0 * 0 * 0 *
David C. Egelhoff 0 * 0 * 0 *
Jordan D. Schnitzer 0 0 0 0 0 0
Patrick Terrell 0 0 0 0 0 0
</TABLE>
(a) The Reporting Persons acquired their shares of New Common Stock on
June 10, 1999, the effective date of the Plan. The Issuer issued those
shares directly to WREP. The transaction was effected in the State of
Delaware.
(b) Not applicable.
(c) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
The Reporting Persons intend to work with a financial advisor to
evaluate whether they should dispose of their currently owned shares of New
Common Stock, maintain their current holdings, or acquire additional
shares.
Item 7. Material to Be Filed as Exhibits
Exhibit 4(1): Letter to independent directors of WREI dated May 11,
1999.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: June 10, 1999 Wilshire Real Estate Investment Trust Inc.
By: /s/ Andrew A. Wiederhorn
-------------------------
Andrew A. Wiederhorn
Title: Chief Executive Officer
Wilshire Real Estate Partnership, L.P.
By: Wilshire Real Estate Investment Trust
Inc.
Its: General Partner
By: /s/ Andrew A. Wiederhorn
-------------------------
Andrew A. Wiederhorn
Title: Chief Executive Officer
<PAGE>
List of Exhibits
----------------
Exhibit No. Description Page
- ----------- ----------- ----
4(1) Letter to independent directors of 11
WREI dated May 11, 1999.
<PAGE>
Schedule 1
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Wilshire Real Estate Investment Trust Inc.
Directors and Executive Officers
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<TABLE>
<CAPTION>
Present Principal Principal Business and
----------------- ----------------------
Name and Address Title Occupation Address
- ---------------- ----- ---------- -------
<S> <C> <C> <C>
Andrew A. Wiederhorn Chairman and Director and c/o WREI
Chief Executive Officer of WREI 1776 S.W. Madison Street
Officer, Treasurer Portland, OR 97205
and Secretary
Lawrence A. Mendelsohn Director and Director and c/o WREI
President Officer of WREI 1776 S.W. Madison Street
Portland, OR 97205
David C. Egelhoff Director President, c/o WREI
Macadam Forbes, 1776 S.W. Madison Street
Inc. Portland, OR 97205
Jordan D. Schnitzer Director President, Jordan c/o WREI
Schnitzer Properties 1776 S.W. Madison Street
Portland, OR 97205
President, Harsch
Investment
Properties, LLC
Patrick Terrell Director Director, B.S. c/o WREI
Medical, United 1776 S.W. Madison Street
Soil Recycling, Portland, OR 97205
Microwave, Inc.,
and Lakeside
Associates
Chris Tassos Executive Vice Officer of WREI c/o WREI
President and 1776 S.W. Madison Street
Chief Financial Portland, OR 97205
Officer
Bo G. Aberg Senior Vice Officer of WREI c/o WREI
President, Europe 1776 S.W. Madison Street
Portland, OR 97205
</TABLE>
<PAGE>
Exhibit 4(1)
[WREI Letterhead]
May 11, 1999
Ms. Elizabeth F. Aaroe Mr. Edward Foehl
Principal Systran Financial Services Corporation
Fisher Consulting, LLC 10220 SW Greenberg Road, Suite 551
8181 SW Edgewater, West Portland, OR 97223
Wilsonville, OR 97070
Mr. Robert Deutschman Mr. Daniel A. Markee
Cappello Group, Inc. Senior Vice President
1299 Ocean Avenue, Suite 306 LendSource, Inc.
Santa Monica, CA 90401 566 Prairie Center Drive, Suite 201
Eden Prairie, MN 55344
Mr. Larry B. Faigin
President
GreenPark Group, LLC
3030 Old Ranch Parkway, Suite 450
Seal Beach, CA 90740
Elizabeth and Gentlemen,
As you know, Wilshire Real Estate Investment Trust Inc. and its subsidiary
Wilshire Real Estate Partnership L.P. (together "WREI") are the third-largest
shareholder post-Effective Date in Wilshire Financial Services Group Inc.
("WFSG"). WREI also has a $5 million DIP loan secured by the stock of First
Bank of Beverly Hills, F.S.B. (the "Bank") and approximately $8.55 million 6%
seven-year PIK note due from WFSG.
WREI, in an effort to assist in increasing the value of WFSG, would like
you to consider the following proposal:
1) WREI would convert its $5 million DIP facility into new common
stock of WFSG at a rate equivalent to 70% of post-Effective Date book value
per share of WFSG.
2) WREI would convert its approximately $8.55 million 6% seven-year
PIK note, which WREI currently carries at a 13% discount rate or
approximately $5.7 million into new common stock of WFSG at 70% of post-
Effective Date book value per share of WFSG. WREI proposes that the dollar
amount of PIK note to be converted would be its current carrying value
rather than its face value.
<PAGE>
Ms. Elizabeth F. Aaroe
Mr. Robert Deutschman
Mr. Larry B. Faigin
Mr. Edward Foehl
Mr. Daniel A. Markee
May 11, 1999
Page 2
Currently WFSG pays 12% interest on the $5 million DIP loan or
approximately $600,000 per year. WFSG has already paid to WREI the March,
April, and May interest payments on the DIP loan and the next payment is due
June 1. WFSG will also be paying (or PIKing) approximately $500,000 of interest
per year on the PIK note. Given WFSG's restructuring and cash-tight position,
WREI would rather see WFSG conserve or invest its cash instead of paying
interest to WREI. If WREI were to convert these two liabilities to equity, WFSG
would significantly reduce its interest burden and have a larger equity capital
base. Additionally, WFSG would free up its pledged shares of the Bank with
which it could potentially raise funds in the future independently of WREI.
This conversion of the notes (DIP and PIK) would also help further eliminate the
perceived ongoing affiliate transactions problem between our companies, which
seems to plague our respective stock prices. The independent directors of WREI
would like to discuss this matter further with a representative of the
prospective independent directors of WFSG at your earliest convenience. I have
been appointed as the representative for WREI. I will have Andy arrange some
potential meeting dates for us to discuss this proposal.
Very truly yours,
/s/ Patrick Terrell
Patrick Terrell
Director
cc: Andrew Wiederhorn
Lawrence Mendelsohn
Jonathan Cleveland
David Egelhoff
Jordan Schnitzer
James Waggoner
Mark Peterman
Bennett Murphy
