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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) APRIL 26, 1996
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SEARCH CAPITAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-9539 41-1356819
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
700 N. PEARL STREET, SUITE 400
DALLAS, TEXAS 75201-7490
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 965-6000
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On May 3, 1996 Search Capital Group, Inc. ("Search") made an
announcement in the form of a press release that the U.S. District Court,
Northern District of Texas, Dallas Division, approved the shareholders class
action suit settlement described in Search's Annual Report on Form 10-K/A for
the fiscal year ended September 30, 1995. A copy of such press release is
attached as an exhibit to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not Applicable
(B) PRO FORMA FINANCIAL INFORMATION.
Not Applicable
(C) EXHIBITS.
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
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99.1 Press Release of Search Capital Group, Inc., dated December 23, 1994.
99.2 Final Judgment and Order of Dismissal filed with the United States
District Court for the Northern District of Texas, Dallas Division.
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SIGNATURE
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.
SEARCH CAPITAL GROUP, INC.
By: /s/ Robert D. Idzi
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Robert D. Idzi,
Executive Vice President and
Chief Financial Officer
Dated: May 13, 1996
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release of Search Capital Group, Inc., dated December 23, 1994.
99.2 Final Judgement and Order of Dismissal filed with the United States
District Court for the Northern District of Texas, Dallas Division.
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EXHIBIT 99.1
[SEARCH CAPITAL GROUP, INC. LETTERHEAD]
Contact: Bill Robertson
Stern, Nathan & Perryman
(214) 373-1601
or
George C. Evans
Chairman, President & CEO
Search Capital Group, Inc.
FOR IMMEDIATE RELEASE: May 3,1996
SEARCH CAPITAL OBTAINS FINAL COURT APPROVAL OF CLASS ACTION
SETTLEMENT
DALLAS, Texas -- Search Capital Group, Inc. (Search) today announced the
U.S. District Court, Northern District of Texas, Dallas Division, has
approved the shareholders class action suit settlement announced in June 1995.
George C. Evans, Search chairman, president and chief executive
officer, said, "This settlement of O'Shea et al. constitutes a practical
business decision on Search's part and we are very pleased that the court has
rendered its approval.
"The court's final order enables us to complete the distribution
of common stock due our former noteholders under our recently completed
debt-to-equity exchange plan," he said.
As previously announced, the terms of the settlement provide for a total
payment of $2,900,000, including $287,500 in cash and Search common shares
valued at $2,612,500.
Based on the average OTC Bulletin Board bid/ask price of the stock during
the 30 days prior to April 26, 1996, Search will issue 1,848,000 common
shares to the Class. The plaintiffs' attorneys are entitled to receive a
maximum of one-third of the total settlement as payment of their fees, plus
reimbursement of 100% of their expenses. Amounts due to class members
(or claimants) will be determined after disposition of proof of claims
forms, which must be submitted by July 1, 1996.
Evans said that the court found that the settlement is fair, reasonable
and adequate. The settlement covers Search, its prior officers and directors,
and an underwriting firm involved in the public offering of Search's common
stock.
Search Capital Group is a specialized financial services
company engaging in the purchase and management of used motor vehicle
receivables. Search shares (SRCG:OB) are traded on the OTC Bulletin Board.
# # #
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EXHIBIT 99.2
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
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)
ELLEN O'SHEA, et al., )
)
Plaintiffs, ) CIVIL ACTION CAUSE NO.
) 3:94-CV-1428-J
v. )
)
SEARCH CAPITAL GROUP, INC., et al., )
) CONSOLIDATED WITH
Defendants and, )
Third Party Plaintiffs, )
)
v. ) CIVIL ACTION CAUSE NOS.:
) 3:94-CV-1452-J; and
MIKE MUSGROVE and ) 3:94-CV-1494-J
MITCH MUSGROVE, )
)
Third Party Defendants, )
)
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FINAL JUDGMENT AND ORDER OF DISMISSAL
This matter having come before the Court for hearing, pursuant to the
Order of this Court, dated February 2, 1996, on the application of the Settling
Parties for approval of the settlement provided for in a Stipulation of
Settlement and its exhibits, dated as of October 25, 1995 (collectively the
"Stipulation") and due and adequate notice having been given to the Class
defined below as required in the Order, and the Court having considered all
papers filed and proceedings, and good cause appearing therefore, IT IS HEREBY
ORDERED, ADJUDGED, AND DECREED that:
FINAL JUDGMENT AND ORDER OF DISMISSAL Page 1
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1. This Court has jurisdiction over the subject matter of this Litigation
and over all parties to this Litigation, including all members of the Class (as
defined in the Stipulation).
2. Pursuant to Rule 23 of the Federal Rules of Civil Procedure
and Section 3(a)(1) of the Securities Act of 1933, this Court hereby approves
the settlement provided for in the Stipulation. The Court further finds that
the settlement is, in all respects, fair, reasonable, and adequate to the
"Class." Solely for the purposes of the settlement provided for in the
Stipulation, this Court finds that this action may be maintained as a class
action and hereby certifies as the Class:
All persons who purchased the common stock of Search
Capital Group, Inc. ("Search") from December 10, 1993
to and including July 5, 1994 ("Class Period").
Excluded from the Class are Defendants, members of
the Defendant Underwriter Class (as identified in the
Amended and Consolidated Complaint and the
Stipulation), members of immediate families of the
Individual Defendants, any entity in which any
Defendant has or had a controlling interest and the
officers and directors of any of the Defendants.
3. As set forth in the Stipulation of Settlement dated as of October
25, 1995, the Settlement provided for in the Stipulation has been determined to
be $2,900,000 payable in (a) common shares of Search Capital Group, Inc. which
shall be paid by the issuance by Search Capital Group, Inc. of 1,848,000 shares
of the common stock of Search Capital Group, Inc. and (b) cash In the amount of
$287,500.00 on or before ten (10) days after the Effective Date of this
Settlement, as defined in the Stipulation.
4. The settlement provided for in the Stipulation, including the
respective contributions, releases, and Class Settlement Stock issued to the
persons identified
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in the Stipulation and its exhibits, in accordance with Section 3(a)(10) of the
Securities Act of 1933, is fair, reasonable, and adequate as to each of the
Parties, and the settlement provided for in the Stipulation and its exhibits is
hereby finally approved in all respects, and the Parties are hereby directed to
consummate and perform its terms.
5. Except as to any individual claim of those persons (identified on
Exhibit B hereto) who have validly and timely requested exclusion from the
Class, the Court hereby dismisses with prejudice and without costs (except as
otherwise provided in the Stipulation) the Litigation (as defined in Paragraph
1 of the Stipulation) against the Released Persons (as defined in Paragraph
V.1.20 of the Stipulation).
6. Upon the Effective Date of the settlement, each and every Released
Claim (as defined in Paragraph V.1.19 of the Stipulation) of each and every
Class Member, except those who have validly requested exclusion from the Class,
whether or not such Class Member has filed a Proof of Claim and Release, and
the named Plaintiffs are and shall be deemed to be conclusively released as
against the Released Persons (as defined in Paragraph V.1.20 of the
Stipulation). "Released Claims" shall mean all claims (including "Unknown
Claims" as defined in Paragraph V.1.25 of the Stipulation), demands, rights,
liabilities, and causes of action of every nature and description whatsoever,
known or unknown, asserted or that might have been asserted, including, without
limitation, any claims of violations of federal or state securities laws, and
any federal or state law claims of fraud, intentional misrepresentation,
negligent misrepresentation, negligence, gross negligence, breach of duty of
care and/or breach of duty of loyalty, fraud, breach of fiduciary duty, or
violations of any state or federal
FINAL JUDGMENT AND ORDER OF DISMISSAL Page 3
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statutes, rules or regulations, by any Class Member against the Released
Persons arising out of, relating to, or in connection with either: (i) a Class
Member's purchase(s) of Search common stock during the Class Period; or (ii) the
facts, transactions, events, occurrences, acts, disclosures, statements,
omissions or failures to act which were alleged or could have been alleged in
the Plaintiffs' First Amended and Consolidated Complaint ("Complaint") in this
Litigation.
7. All Class Members, except those who have validly requested exclusion
from the Class, are hereby forever barred and enjoined from prosecuting any of
the Released Claims against any of the Released Persons.
8. The notice given to the Class of the settlement provided for in the
Stipulation and the other matters set forth therein was the best notice
practicable under the circumstances, including individual notice to all members
of the Class who could be identified through reasonable effort. Such notice
provided due and adequate notice of those proceedings and of the matters set
forth therein, including the proposed settlement provided for in the
Stipulation, to all persons entitled to such notice, and such notice fully
satisfied the requirements of Rule 23 of the Federal Rules of Civil Procedure
and the requirements of due process.
9. All claims for contribution, indemnification or reimbursement,
however denominated, against any of the Settling Defendants, the Underwriter
Defendants, Third Party Defendants or against non-settling defendant Hein +
Associates arising under federal or state law, including those based in tort,
contract, or statute, or any other body of law, in favor of persons, including
Settling Defendants, the Underwriter Defendants, Third Party Defendants, or the
non-settling defendant, who are asserted
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to be or who may be joint tortfeasors or wrongdoers, however denominated, with
any of the Settling Defendants, the Underwriter Defendants or Third Party
Defendants or non-settling defendant are extinguished, discharged, satisfied.
barred, and enjoined. Should any parts of the case involving the non-settling
defendant be tried, and monetary damages be awarded to Plaintiffs for the joint
liability of any or all defendants, non-settling defendant Hein + Associates is
entitled to a credit, on all federal and state law claims, for the settlement
described in the Stipulation of Settlement. The credit shall be determined in
accordance with the proportionate share rule described in McDermott, Inc. v.
AmClyde, 114 S. Ct.1461 (1994), viz.: (i) in the trial of plaintiffs' claims
against non-settling defendant Hein + Associates, the jury will determine, by
percentage, the proportionate share of responsibility for each of the Settling
Defendants, the settling Third Party Defendants, and non-settling defendant
Hein + Associates, (ii) any damages found by the jury will be reduced by the
percentage of responsibility the jury finds attributable to the Settling
Defendants and the settling Third Party Defendants, and (iii) judgment may be
entered against non-settling defendant Hein + Associates for only the remaining
damages, if any, in accordance with the percentage of responsibility the jury
finds attributable to Hein + Associates. The Settling Defendants are forever
discharged and the Court finds that this Settlement is fundamentally fair and
equitable.
10. This Court expressly finds and determines that there is no just
reason for delay in the entry of this Order as a Final Judgment approving the
Stipulation of Settlement and dismissing with prejudice on the merits, without
costs, as to the defendants Search Capital Group, Inc., Daniel E. Staub, Scott
A. Carlson, Richard L.
FINAL JUDGMENT AND ORDER OF DISMISSAL Page 5
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Morgan, Jim D. Schultz, Lloyd E. Adams, Sam B. Myers, Jr., Perry W. Cloud, Jr.,
and A. Brean Murray, and Brean Murray, Foster Securities, Inc. (the "Settling
Defendants"), the Amended and Consolidated Complaint filed under Civil Action
No. 3:94-CV-1428-J (the "Action"), in the United States District Court for the
Northern District of Texas (Dallas Division), and as to Mitch Musgrove and Mike
Musgrove (the "Third Party Defendants"), all complaints against such settling
Third Party Defendants filed in the Action, and dismissing with prejudice all
claims asserted in the Action against the Settling Defendants or the Third
Party Defendants based on the facts alleged in the Complaint on behalf of
plaintiffs and on behalf of members of the plaintiff class or by the third
party plaintiffs against the Third Party Defendants. Accordingly, the Clerk of
this Court is hereby expressly ORDERED AND DIRECTED to enter this Order as a
Final Judgment pursuant to Fed. R. Civ. P. 54(b).
11. Without affecting the finality of this Judgment in any way, this
Court hereby retains continuing jurisdiction over (a) implementation of the
Settlement; (b) disposition of the Settlement Fund; (c) hearing and determining
applications for Plaintiffs' attorneys' fees and expenses (including fees and
costs of experts and/or consultants); (d) all parties for the purpose of
enforcing and administering the settlement provided for in the Stipulation; and
(e) the continuing prosecution of claims against Hein + Associates as well as
any other non-settling defendant.
12. In the event that the settlement does not become effective in
accordance with the terms of the Stipulation, then this Judgment shall be
rendered null and void and shall be vacated and, in such event, all orders
entered and releases delivered in connection herewith shall be null and void.
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