<PAGE> 1
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: June 19, 1996
EMERGENT GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
South Carolina 0-8909 57-0513287
- ------------------------ ----------- ----------------------
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification Number)
Suite 750, 15 South Main Street, Greenville, South Carolina 29601
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (864) 235-8056
The Exhibit Index appears on page 4 hereof.
1
<PAGE> 2
ITEM 5. OTHER EVENTS
By letter dated May 31, 1996, Emergent Group, Inc. ("Emergent") was
informed that First Greensboro Home Equity, Inc. and First Greensboro Home
Equity of Arkansas, Inc. (collectively, "First Greensboro") were terminating
their agreement (the "Agreement") with certain Emergent subsidiaries. A copy of
this letter is attached hereto as Exhibit 99.1.
This termination is expected to have a material adverse effect on
Emergent's loan originations. During 1995 and the first quarter of 1996,
approximately 44.5% and 48.7%, respectively, of Emergent's total loans were
originated through First Greensboro.
In its May 31, 1996 letter, First Greensboro has offered to pay the
sum of $5,058,548.00 for its breach of contract, which represents what it
contends to be the amount owing under the Agreement as a result of such
termination. Emergent disagrees with this position and has declined to accept
this amount. Emergent believes that as a result of the breach of contract by
First Greensboro, it has or will sustain much greater damages than the amount
offered, and further believes that under South Carolina law, it is entitled to
such additional damages to the extent that such damages can be demonstrated.
Emergent intends to take appropriate steps to collect the $5,058,548 and such
greater damages, although no assurance can be given that Emergent will be
successful in its efforts to collect more than the amount offered.
Except for such termination, the contract with First Greensboro would
have terminated, if not renewed, on December 31, 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of the Businesses Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Exhibits.
99.1 Letter of First Greensboro Home Equity, Inc.
2
<PAGE> 3
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.
EMERGENT GROUP, INC.
June 19, 1996 By: /s/ John M. Sterling, Jr.
-------------------------------------
John M. Sterling, Jr.
President and Chief Executive Officer
3
<PAGE> 4
EXHIBIT INDEX
99.1 Letter of First Greensboro Home Equity, Inc.
4
<PAGE> 1
EXHIBIT 99.1 FIRST GREENSBORO HOME EQUITY, INC.
HOME OFFICE
First Greensboro Executive Centre
4830 Koger Boulevard
Greensboro, NC 27407
Office 910-855-4825
Fax 910-299-8226
May 31, 1996
Mr. Keith Giddens, CEO
Mr. Dennis W. Canupp, COO
Emergent Mortgage Corp.
208 Garvin Street, P.O. Box 998
Pickens, SC 29671
Dear Keith and Dennis:
As I previously advised you, First Greensboro Home Equity, Inc. feels
that it must terminate the Revised and Restated Agreement dated January 1, 1996
between it and Emergent Mortgage Corp. and various affiliated corporations. We
have enjoyed our mutually profitable arrangement with Emergent over the past
two years, and our termination of the Agreement is the result of a change in
direction of our company rather than any dissatisfaction with the relationship.
First Greensboro will of course, honor the termination provisions of the
Agreement. Pursuant to Section 10(b), we submit to you with this letter our
check in the amount of $5,058,548.00 in full satisfaction of our obligations
under the Agreement. The amount of the payment is calculated based on the
12-month period beginning June 1, 1995 and ending on the date hereof.
As you know, First Greensboro has been negotiating with a major
regional bank holding company regarding its purchase of an equity interest in
the Company. On May 30, 1996, we entered into a Stock Acquisition Agreement
with Centura Banks, Inc., whereby Centura will purchase from the Company and
its shareholders shares representing approximately 49% of the equity of the
Company. For your information, a copy of the Stock Acquisition Agreement is
enclosed.
From our previous conversations, we are aware that you believe that
Emergent has a right of first refusal with respect to this transaction under
Section 6(b)(vi) of our Agreement. We do not believe this to be the case. By
its terms, implementation of that section requires the execution by the
shareholders of First Greensboro of the Agreement. In fact, to our knowledge
no shareholders ever signed the Agreement. Therefore, the provisions of that
paragraph are void.
However, if you are interested in purchasing a 49% interest in First
Greensboro, we shall entertain any proposal that you choose to present to us on
or before June 10, 1996.
First Greensboro intends to cooperate with Emergent in terminating our
relationship. Therefore, we are open to a "workout" period during which you
would continue to purchase our loans following termination of the Agreement.
We shall be happy to discuss any suggestions you wish to make in this regard.
Sincerely,
FIRST GREENSBORO HOME EQUITY, INC.
W. C. Jordan, Jr.
5
