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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
ALFA LEISURE, INC.
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(Name of Subject Company [Issuer])
ALFA LEISURE, INC.
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(Name of Person(s) Filing Statement)
Common Stock, no par value
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(Title of Class of Securities)
015394109
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(CUSIP Number of Class of Securities)
Karen Nicolai Winnett, Esq.
Oppenheimer Wolff & Donnelly LLP
500 Newport Center Drive, Suite 700, Newport Beach, California 92660;
949/719-6000
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(Name, address and telephone number of person authorized to receive notice and
communications on behalf of the person(s) filing statement)
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ITEM 1. SECURITY AND SUBJECT COMPANY
The class of equity securities to which this statement relates is
common stock, no par value (Common Stock"). The name of the subject company is
Alfa Leisure, Inc. ("Company") and the address of its principal office is 13501
5th Street, Chino, California 91710.
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to the tender offer dated April 30, 1998 by
Johnnie R. Crean. Mr. Crean's business address is 13501 5th Street, Chino,
California 91710.
ITEM 3. IDENTITY AND BACKGROUND
(a) This statement is filed by Alfa Leisure, Inc. The business address
of Alfa Leisure, Inc. is 13501 5th Street, Chino, California 91710.
(b) The Company leases its manufacturing facilities and executive
offices from Hercules Land Holding, Inc., a California corporation of which Mr.
Crean is the sole shareholder. The Company pays monthly rent of $12,932 pursuant
to a five (5) year lease with three (3) options to extend for three (3) years
each. The lease provides the Company with the option to acquire the property and
facilities at any time during the lease term at the market value as determined
by appraisal by an MAI certified appraiser. Based on an informal market survey,
the Company believes that the monthly rental rate for the property and
facilities is consistent with local market rates. Prior to the acquisition of
the property and facilities by Hercules Land Holding, Inc., Mr. Crean had leased
the property and facilities for $8,324 per month pursuant to a December 19, 1980
lease and subleased the property to the Company. During the fiscal year ended
April 30, 1997 and 1996, the Company paid lease payments of $11,977 per month to
Mr. Crean.
Mr. Crean borrows money from and repays money to the Company from time
to time. During the fiscal years ended April 30, 1997 and 1996, the largest
amounts of money which Mr. Crean owed to the Company on any one date were
$439,792 and $402,390, respectively. A portion of Mr. Crean's obligation to the
Company is represented by an unsecured promissory note in the amount of $402,390
which bears interest at the rate of nine percent (9%) per annum. It is
anticipated that the amount of Mr. Crean's indebtedness to the Company will
fluctuate during fiscal year 1998.
The Company has collateralized Mr. Crean's personal indebtedness of
$184,000 to a third party lender with a deed of trust on a 1.4 acre lot which is
used as the parking lot for the Company's Chino, California manufacturing
facility. Mr. Crean transferred this property to the Company in 1989 subject to
the existing debt which was structured on an interest only basis.
Mr. Crean has personally guaranteed the Company's $2,000,000 line of
credit with Merlin Financial, Inc. Purchaser's personal guaranty of the
Company's Promissory Note dated March 31, 1992 is secured by a pledge of all of
Purchaser's shares of Common Stock and by Mr. Crean's interest in the
above-referenced lease for the Company's facilities in Chino, California.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) The Company is not advising holders of the securities being sought
by the bidder to accept or reject the offer. The Company is expressing no
opinion and is remaining neutral toward the tender offer.
(b) While the Board of Directors of the Company (other than Mr. Crean
who abstained from voting) believes that the value of the Company's shares
exceeds the tender offer price, an investment in the common stock of the Company
is an illiquid investment. Depending upon the individual financial circumstances
and investment goals of a shareholder, a shareholder may benefit from selling
the shares of common stock at the tender offer price as a means of liquidating
the shareholder's investment. A shareholder choosing to accept the tender offer
price will not have the opportunity to participate in any future growth of the
Company but will have the opportunity to use the proceeds from the sale of the
shares for other investment opportunities which may be more or less favorable
than retaining the shares of common stock of the Company.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
No persons or class of persons will be employed, retained or
compensated by the Company or by any person on behalf of the Company, to make
solicitations or recommendations to security holders.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
(a) On April 24, 1998, Mr. Crean purchased 12,000 shares of common
stock from a stockholder of the Company who is not an affiliate of Mr. Crean or
the Company at a purchase price of $.50 per share. The purchase was made at the
request of the stockholder.
On April 27, 1998, Mr. Crean purchased 23,000 shares of common stock
from a stockholder of the Company who is not an affiliate of Mr. Crean or the
Company at a purchase price of $.50 per share. The purchase was made at the
request of the stockholder.
(b) The Company has been informed that no executive officer, director
or affiliate of the Company intends to tender to the bidder securities of the
class of securities being sought by the bidder which are held of record or
beneficially by such persons.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) There is no negotiation being undertaken or underway in response to
the tender offer which relate to or would result in:
(i) an extraordinary transaction, such as a merger or
reorganization, involving the Company or its subsidiaries;
(ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries;
(iii) a tender offer for or other acquisition of securities by or
of the Company; or
(iv) any material change in the present capitalization or dividend
policy of the Company.
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(b) Inapplicable
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Inapplicable
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
(a) Inapplicable
(b) Inapplicable
(c) Loan Agreement, Promissory Note, Security Agreement, UCC-1,
Assignment of Sublease, Certificate of Borrower, Guaranty, Pledge Agreement,
Escrow Letter, Lease Assignment and Stock Assignment Separate From Certificate
incorporated by reference from schedule 14D-1 filed by Purchaser on May 12,
1994, Exhibit 11(c).
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: May 20, 1998 ALFA LEISURE, INC.
By: /s/ Johnnie R. Crean
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Johnnie R. Crean, President
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