UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _______)*
Fairfield Communities, Inc.
_________________________________________________________________
(Name of Issuer)
Common Stock, $.01 par value per share
_________________________________________________________________
(Title of Class of Securities)
304231301
________________________________________________________________
(CUSIP Number)
James F. Mosier, Corporate Secretary and General Counsel
Physicians Insurance Company of Ohio
13515 Yarmouth Drive, NW
Pickerington, Ohio 43147
(614) 864-7100
_________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 18, 1994
_________________________________________________________________
(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(b)(3) or (4), check the following box. _____
Check the following box if a fee is being paid with the statement
__X__. (A fee is not required only if the reporting person:
(1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
CUSIP NO. 304231301 Page 2 of 8 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Physicians Insurance Company of Ohio
#31-0889180
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*:
(a)_____ (b)_____
3. SEC USE ONLY:
4. SOURCE OF FUNDS*:
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e):
_____
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Ohio
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON
WITH:
7. SOLE VOTING POWER: 1,184,000
8. SHARED VOTING POWER: 0
9. SOLE DISPOSITIVE POWER: 1,184,000
10. SHARED DISPOSITIVE POWER:0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
1,184,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*:
_____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
9.9%
14. TYPE OF REPORTING PERSON*:
IC
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
Item 1. Security and Issuer
This statement relates to the Common Stock ("Common Stock"), $.01
par value per share, of Fairfield Communities, Inc. ("Issuer").
The address of the principal executive offices of Issuer is 2800
Cantrell Road, Little Rock, Arkansas 72202.
Item 2. Identity and Background
(a) Physicians Insurance Company of Ohio ("PICO")
(b) PICO's business address is 13515 Yarmouth Drive, NW,
Pickerington, Ohio 43147.
(c) PICO's principal business is selling professional liability
insurance to physicians in the State of Ohio.
(d) There are no criminal convictions during the last five
years.
(e) There were no civil proceedings resulting in a judgment,
decree, or official order enjoining future violations or
mandating activities subject to federal or state securities
laws.
(f) Ohio
Item 3. Source and Amount of Funds or Other Consideration
PICO purchased the Common Stock with generally available funds
from working capital. No part of these funds was borrowed. The
total purchase price amounted to $5,328,000.00. PICO purchased
the shares of Common Stock reported herein from Lehman Brothers
Inc.; Lehman Brothers Inc. acquired the shares as a result of two
separate Stipulations approved by the U.S. Bankruptcy Court for
the Central District of California. The Stipulations resolved
the claims of Lehman Brothers Inc. for the repayment of margin
loans.
Item 4. Purpose of Transaction
PICO has acquired the Common Stock of the Issuer in order to
obtain an equity position in the Issuer. PICO believes the
Common Stock of the Issuer has the potential for appreciation in
price.
(a) PICO agreed to purchase 1,184,000 shares of Common Stock of
the Issuer as reported herein; depending on the
satisfaction of several contingencies, PICO may purchase an
additional 494,726 shares of Common Stock of the Issuer
within nine months.
(b)-(j) Not applicable.
Item 5. Interest in Securities of the Issuer
(a) PICO has purchased 1,184,000 shares of Common Stock of the
Issuer. This amounts to 9.9% of the shares of Common Stock
outstanding. As described in Item 4 of Schedule 13D above,
PICO may purchase 494,726 additional shares of Common Stock
of the Issuer; if this purchase occurs, PICO would own
14.03% of the shares of Common Stock outstanding.
(b) PICO has the sole power to vote or to direct the vote of
and sole power to dispose or direct the disposition of all
shares of Common Stock purchased by PICO.
(c) PICO reached agreement on March 18, 1994 to purchase
1,184,000 shares of Common Stock of the Issuer at a price
of $4.50 per share. This transaction was a private
placement in which Lehman Brothers Inc. sold 1,184,000
shares of Common Stock to PICO.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings, or
Relationships with Respect to Securities of the Issuer
PICO agreed to purchase 1,184,000 shares of Common Stock of the
Issuer; depending on the satisfaction of several contingencies,
PICO may purchase an additional 494,726 shares of Common Stock of
the Issuer, as described in the attached Exhibit 1.
Item 7. Material to be Filed as Exhibits
The letter agreement dated March 16, 1994 between PICO and Lehman
Brothers Inc., which was fully executed on March 18, 1994, is
attached hereto as Exhibit 1 and incorporated by reference.
Signatures
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.
March 24, 1994
/s/ James F. Mosier
James F. Mosier
General Counsel and Secretary
Physicians Insurance Company of Ohio
EXHIBIT 1
March 16, 1994
VIA FACSIMILE AND AIRBORNE EXPRESS
Lehman Brothers Inc.
Attn: Mr. John S. Levy
Managing Director
3 World Financial Center
New York, New York 10285
RE: Sale of Fairfield Communities, Inc.
("Fairfield") Common Stock Acquired from
Pacific Southwest Properties and Tre Scalini Inc.
Chapter 7 Estates
Gentlemen:
This letter agreement will confirm the understanding and
agreement between Physicians Insurance Company of Ohio ("PICO")
and Lehman Brothers Inc. ("Lehman") as follows:
WHEREAS, Lehman is the beneficial and legal owner of 1,678,726
shares of Common Stock, par value $.01 per share, of Fairfield
Communities, Inc. (the "Securities"), representing approximately
14.03% of the outstanding shares of Fairfield on the basis of the
amount of shares estimated to be issued upon the resolution of
claims and the distribution of shares under Fairfield's plan of
reorganization.
WHEREAS, Lehman has the sole power to vote and dispose of all of
the Securities. Lehman became vested with the right to receive
the Securities upon and subject to the resolution of certain
matters pending in the U.S. Bankruptcy Court in the Eastern
District of Arkansas (particularly, an adversary proceeding
between the respective indenture trustees of two series of bonds
issued by the Company prior to its Chapter 11 bankruptcy).
Lehman obtained the rights to receive the Securities as a result
of two separate stipulations (the "Stipulations"), approved by
the U.S. Bankruptcy Court for the Central District of California,
entered with the Chapter 7 trustees of the estates of Tre
Scalini, Inc. and Pacific Southwest Properties, Inc. The
Stipulations resolve the claims of Lehman for the repayment of
margin loans made to the debtors of the two estates. The
Stipulations were ordered approved by the U. S. Bankruptcy Court
during March of 1993 and the time period for filing appeals has
lapsed.
WHEREAS, upon the terms and subject to the conditions of this
letter agreement, PICO desires to purchase from Lehman all of its
Securities and Lehman desires to sell such Securities to PICO.
NOW, THEREFORE, we (PICO) and you (Lehman) agree as follows:
1. PICO agrees to purchase all of the Securities (1,678,726
shares) from Lehman at a purchase price of $4.50 per share.
Lehman agrees to transfer good and marketable title to such
Securities and confirms that there are no encumbrances,
liens, equities or claims against such Securities which
have been created by Lehman.
2. The parties agree that PICO's purchase of the Securities
shall occur in two stages as follows:
2.1 Lehman will initially transfer and deliver
approximately 1,184,000 shares (representing just under
10% of the outstanding Fairfield shares) as soon as
practicable following the date of this letter agreement
(the "First Closing").
2.2 Lehman will transfer and deliver all of the remaining
Securities (approximately 494,726 shares) as soon as
PICO receives approval to do so from the Office of
Thrift Supervision ("OTS") or at such time as OTS
approval is no longer required (the "Second Closing").
PICO agrees to use its reasonable efforts to seek such
approval as promptly as possible and to notify Lehman
as soon as such approval is received or is no longer
required. Lehman's obligation to transfer and deliver
the remaining Securities at the Second Closing shall,
if required by the Stipulations, be subject to the
consent of David Haberbush, the permanent trustee in
the above-mentioned Chapter 7 bankruptcy proceedings;
in this connection, PICO acknowledges that such consent
may be required if, at the time of the Second Closing,
the $4.50 per share purchase price is less than 70% of
the market value of the Fairfield stock. In addition,
Lehman's obligation to transfer and deliver the
remaining Securities at the Second Closing shall
terminate nine months from the date hereof, unless
Lehman has previously received notice from PICO that
such Securities can be purchased by PICO or unless such
termination date is extended by mutual agreement of the
parties.
2.3 At each such Closing, Lehman will sell, assign and
transfer to PICO all of its right, title and interest
in the Securities to be sold, together with all
requisite endorsements and/or documents necessary to
effect such transfer, upon receipt of payment from PICO
in the amount of $4.50 per share.
3. In connection with our purchase of the Securities, PICO
confirms that:
3.1 PICO understands that the Securities have not been
registered under the Securities Act of 1933, as amended
(the "Act"), and are being sold to it in a transaction
that is exempt from the registration requirements of
that Act.
3.2 Any information PICO desires concerning the Securities,
Fairfield, or any other matter relevant to its decision
to purchase the Securities is or has been made
available to it (including, without limitation, a copy
of the Stipulations),
either in reports filed by Fairfield under the
Securities Exchange Act of 1934 or otherwise, and it
has conducted its own due diligence and has not relied
on any representations of Lehman or any of its
directors, officers or representatives in making the
decision to invest in the Securities.
3.3 For purposes of the above-described transaction, PICO
is an "accredited investor" as that term is defined in
Rule 501(a) of Regulation D under the Act, and has such
knowledge and experience in financial and business
matters as to be capable of evaluating the merits and
risks of an investment in the Securities and is able to
bear the economic risk of investment in the Securities.
3.4 The Securities were not offered or sold to PICO by any
form of general solicitation or general advertising.
3.5 PICO will only sell or otherwise transfer the
Securities pursuant to the registration provisions of
the Act or in one or more transactions exempt from the
registration requirements of the Act.
3.6 PICO acknowledges that, so long as appropriate,
certificates for the Securities may bear a legend
restricting their transfer except pursuant to the
registration provisions of the Act or an applicable
exemption therefrom.
3.7 PICO acknowledges that the Securities are restricted
and cannot be transferred unless subsequently
registered under the Act or an exemption from the
registration requirements of that Act is available or
sold in a transaction where legal counsel has opined
that such transfer is permissible, and it understands
that neither Fairfield nor Lehman is required to cause
the registration of the Securities under the Act.
3.8 The consideration being provided to our purchase of the
above Securities is not being furnished, in whole or in
part, either directly or indirectly, from assets of any
"employee pension benefit plan" as that term is defined
under the Employee Retirement Income Security Act of
1974, as amended.
4. Miscellaneous.
4.1 Further Assurances. The parties agree to execute such
additional instruments or documents as either party may
reasonably deem necessary or desirable in connection
with the sale and transfer of the Securities.
4.2 Survival. The covenants and agreements contained
herein shall survive the execution and delivery of this
agrement, the delivery of the Securities and the
consideration given therefor and shall contain in full
force and effect.
4.3 Binding Effect; Benefits. This agreement shall be
binding upon and shall inure to the benefit of all the
parties hereto and their respective heirs, legal
representatives, successors and permitted assigns,
provided, however, that this Agreement may not be
assigned by PICO without the prior written consent of
Lehman.
4.4 Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State
of New York, without regard to the principles thereof
regarding conflicts of laws.
4.5 Amendments. This Agreement may be modified or amended
only by an instrument in writing signed by PICO and
Lehman.
4.6 Complete Agreement. This Agreement constitutes the
entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements and
understandings, oral and written, with respect to such
transactions.
4.7 Counterparts. This Agreement may be executed in two or
more counterparts, which together shall constitute a
single binding agreement.
If the foregoing correctly sets forth our agreement and
understanding, please so indicate in the space provided for that
purpose below, whereupon this letter shall constitute a binding
agreement as of the date hereof.
Sincerely,
PHYSICIANS INSURANCE COMPANY OF OHIO
By: ________________________________
John E. Albers, MD
President and CEO
ACCEPTED AND AGREED:
LEHMAN BROTHERS INC.
By: __________________________
John S. Levy
Managing Director
By: __________________________
Samuel M. Wasserman
Managing Director
