SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 12, 1999
Wilshire Real Estate Investment Inc.
(Exact name of registrant as specified in its charter)
Maryland 0-23911 52-2081138
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
1310 SW 17th Street, Portland, OR 97201
(Address of principal executive offices)(Zip Code)
(503) 721-6500
(Registrant's telephone number, including area code)
Item 4. Changes in Registrant's Certifying Accountant.
On November 12, 1999, the Board of Directors of Wilshire Real Estate
Investment Inc., a Maryland corporation (the "Company") appointed the firm of
Ernst & Young LLP to replace Arthur Andersen LLP as the principal accountant to
audit the Company's financial statements. Arthur Andersen LLP was replaced due
to a potential conflict of interest with the services it performs for Wilshire
Realty Services Corporation ("WRSC"), the Company's former manager, and Wilshire
Financial Services Group Inc. ("WFSG"), the parent of WRSC.
The Company recently decided to become internally managed and has resulted
in disputes between the Company, on the one hand, and WRSC and WFSG, on the
other. The Company's business and investment affairs had been managed by WRSC
pursuant to a management agreement and the Company had received managerial and
administrative services from WRSC thereunder.
The report of Arthur Andersen LLP on the financial statements of the
Company for the past year (the Company was formed on October 24, 1997, commenced
operations on April 6, 1998 and was audited for the one year ended December 31,
1998) did not contain an adverse opinion or a disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope or accounting principles,
except that, in its report dated March 19, 1999, Arthur Andersen LLP included a
matter-of-emphasis paragraph stating "As discussed in Note 1, Wilshire Realty
Services Corporation, a wholly owned subsidiary of Wilshire Financial Services
Group Inc. ("WFSG"), is the manager of the Company. Furthermore, Wilshire Credit
Corporation ("WCC"), an affiliate of WFSG, provides loan servicing and real
property management services to the Company. On March 3, 1999, WFSG filed a
voluntary prepackaged petition for relief under Chapter 11 of the U.S.
Bankruptcy Code. The WFSG plan of reorganization includes the transfer of
servicing operations conducted by WCC to a newly formed subsidiary of WFSG. As
discussed in Note 12, the Company has also entered into several transactions
with these affiliated entities." During the period from the Company's inception,
October 24, 1997, through November 12, 1999 there were no disagreements with
Arthur Andersen LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Arthur Andersen LLP, would
have caused it to make reference to the subject matter of the disagreement in
connection with its report on the financial statements of the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibits.
99.1 Letter dated November 12, 1999 from Arthur Andersen LLP.
SIGNATURES
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 hereunto duly authorized.
WILSHIRE REAL ESTATE INVESTMENT INC.
Date: November 12, 1999 By:/s/ Lawrence Mendelsohn
Lawrence Mendelsohn
President
By:/s/ Chris Tassos
Chris Tassos
Executive Vice President and
Chief Financial Officer
Exhibit 99.1
November 12, 1999
Office of the Chief Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir/Madam:
We have read Item 4 included in the Form 8-K dated November 12, 1999 of Wilshire
Real Estate Investment Inc. to be filed with the Securities and Exchange
Commission and are in agreement with the statements contained therein.
Very truly yours,
ARTHUR ANDERSEN LLP
cc: Chris Tassos, CFO, Wilshire Real Estate Investment Inc.
