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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3 )*
FINET HOLDINGS CORPORATION
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(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
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(Title of Class of Securities)
317922201
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(CUSIP Number)
Mr. Bruce G. Wilcox
Cumberland Associates
1114 Avenue of the Americas
New York, New York 10036
(212) 536-9700
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 31, 1996
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(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 . (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-l(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).
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SCHEDULE 13D
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CUSIP No. 317922201
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1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Cumberland Associates
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
2,350,000
NUMBER OF SHARES
BENEFICIALLY OWNED --------- -------------------------------------------------
8 SHARED VOTING POWER
BY EACH REPORTING
0
PERSON WITH --------- -------------------------------------------------
9 SOLE DISPOSITIVE POWER
2,350,000
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
2,350,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
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14 TYPE OF REPORTING PERSON*
PN, IA
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*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.
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This Amendment No. 3, which is being filed on behalf of
Cumberland Associates, a New York limited partnership, pursuant to Rule 13d-2
under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
relates to the common stock, par value $.01 per share (the "Common Stock" or the
"Shares"), of Finet Holdings Corporation (the "Company"), and amends and
supplements the Schedule 13D, originally filed with the Securities and Exchange
Commission (the "Commission") on February 6, 1995, as amended and supplemented
by Amendment No. 1, filed with the Commission on March 21, 1995, and as further
amended and restated pursuant to Item 101(a)(2)(ii) of Regulation S-T by
Amendment No 2, filed with the Commission on November 13, 1995.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 is hereby amended by inserting the following text
after the last paragraph of such Item:
On April 21, 1997, the Company issued directly to Cumberland
Partners 1,850,000 shares of Common Stock (the "Issuance") pursuant to the terms
of a letter agreement between the Company and Cumberland Associates dated March
5, 1997 (the "Letter Agreement"), a copy of which is attached hereto as Exhibit
10 and incorporated herein by reference, setting forth certain agreements
between the parties with respect to a voluntary recapitalization of the Company
(the "Recapitalization"). In consideration of the Issuance, Cumberland
Associates agreed, in accordance with the terms of the Letter Agreement, to the
cancellation of $800,000 in principal amount outstanding in favor of Cumberland
Partners under the Convertible Debenture.
As additional consideration for the cancellation of the
Convertible Debenture, the Company agreed to issue to Cumberland Partners, in
accordance with the terms of the Letter Agreement, warrants to acquire
approximately 200,000 shares of Common Stock (the "Private Placement Warrants")
upon successful completion of a contemplated private placement (the "Private
Placement") of up to 4,000,000 shares of Common Stock to be completed by the
Company on or before May 15, 1997, as part of the Recapitalization. Due to the
contingent nature of this arrangement, and the fact that successful completion
of the Private Placement is not within the control of Cumberland Associates or
Cumberland Partners, the shares of Common Stock underlying the Private Placement
Warrants are not currently included in the number of shares beneficially owned
by Cumberland Associates. Cumberland
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Associates intends to amend its Schedule 13D in the event that the Company
issues Private Placement Warrants to Cumberland Partners to acquire a number of
shares representing one (1) percent or more of the outstanding shares of Common
Stock.
Item 5. Interest in Securities of the Issuer
Items 5(a), (b) and (c) are hereby amended and restated in
their entirety as follows:
(a) Cumberland Associates is the beneficial owner of
2,350,000 shares of Common Stock. Cumberland Associates owns indirectly (through
Cumberland Partners) 2,350,000 shares of Common Stock, representing 9.5% of the
24,772,317 issued and outstanding shares of Common Stock.
(b) Cumberland Associates has the sole power to vote or to
direct the vote and the sole power to dispose or to direct the disposition of
2,350,000 shares of Common Stock.
(c) Prior to December 31, 1996, the Company effected a
one-for-two reverse split (the "Reverse Split") of its outstanding shares of
Common Stock, thereby reducing pro rata the number of shares of Common Stock
beneficially owned by Cumberland Associates. After the Reverse Split, Cumberland
Associates was the beneficial owner of 3,500,000 shares of Common Stock.
On December 31, 1996, the Company and Cumberland Partners
entered into a Redemption Agreement, a copy of which is attached hereto as
Exhibit 11 and incorporated herein by reference, whereby the Company agreed to
redeem (the "Redemption") 3,000,000 post-split shares of Common Stock held by
Cumberland Partners for an aggregate purchase price of $180,000. On the same
date, the Company delivered payment to Cumberland Partners in exchange for the
release of the shares by Cumberland Partners to the Company. The aggregate
consideration represents a purchase price by the Company of $.06 per share of
Common Stock. After the Redemption, Cumberland Associates was the beneficial
owner of 500,000 shares of Common Stock.
On April 21, 1997, the Company issued directly to Cumberland
Partners 1,850,000 shares of Common Stock pursuant to the terms of the Letter
Agreement. In consideration of the Issuance, Cumberland Associates agreed, in
accordance with the terms of the Letter Agreement, to the
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cancellation of $800,000 in principal amount outstanding in favor of Cumberland
Partners under the Convertible Debenture. The aggregate consideration represents
a purchase price by Cumberland Partners of $.43 per share of Common Stock. After
the Issuance, Cumberland Associates became the beneficial owner of 2,350,000
shares of Common Stock.
Other than as set forth in this Item 5(c), Cumberland
Associates has effected no transactions in the Common Stock during the last 60
days.
Item 6 Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Item 6 is hereby amended by inserting the following text
after the last paragraph of such Item:
Pursuant to the terms of the Letter Agreement described more
fully in Item 3 above, the Company issued to Cumberland Partners 1,850,000
shares of Common Stock. Pursuant to the Redemption Agreement described more
fully in Item 5 above, the Company redeemed from Cumberland Partners 3,000,000
shares of Common Stock.
Item 7 Material to be Filed as Exhibits
Exhibit 10. Letter Agreement, dated March 5, 1997, between
Finet Holdings Corporation and Cumberland Associates.
Exhibit 11. Redemption Agreement, dated as of December 31,
1996, by and between Finet Holdings Corporation and Cumberland Partners.
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SIGNATURES
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Dated: May 1, 1997
CUMBERLAND ASSOCIATES
By: /s/ Bruce G. Wilcox
Bruce G. Wilcox
General Partner
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EXHIBIT 10
FINET HOLDINGS CORPORATION
235 Montgomery Street, #750
San Francisco, CA 94104
415/658-4150 Fax: 415/658-4150
March 5, 1997
Via Fax 212 768-2572
Mr. Bruce Wilcox
Cumberland Associates, 38th Floor
1114 Avenue of the Americas
New York, NY 10036
Dear Bruce:
In accordance with our agreement, the time has come to convert the
Cumberland Partners $800,000 debenture to equity. This letter will confirm that,
pursuant to our recent discussions regarding the accrued interest and penalty
interest due, we have mutually agreed that the Company will issue 1,850,000
shares of its common stock as consideration for the conversion of the debenture
and all accrued interest of Finet's common stock. I will direct our transfer
agent to issue those shares in the name of Cumberland Partners. Once you have
received the shares, you will release your security interest. Additionally, when
Finet completes its current equity financings, in accordance with our agreement,
the Company will issue to Cumberland warrants for the purchase of the Company's
common stock in the amount of the greater of 200,000 or 25% of the number as are
issued to Commonwealth Associates pursuant thereto, under identical terms.
Please indicate below your concurrence with these actions:
I assent to the conversion of Cumberland Partners $800,000 convertible debenture
and accrued interest to Finet common stock under the terms stated above.
/s/ Bruce G. Wilcox Date: 3/6/97
Bruce G. Wilcox
Bruce, I want to take this opportunity to thank you for your
substantial assistance and cooperation in helping Finet complete its voluntary
recapitalization. Literally, we could not have done it without you.
Sincerely,
/s/ Jan Hoeffel
Jan Hoeffel, President
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EXHIBIT 11
REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT entered into as of the 31st day of December
1996 by and between Finet Holdings Corporation, a Delaware corporation ("Finet")
and Cumberland Partners, a New York partnership ("Cumberland") provides:
RECITALS
A. Cumberland held of record six million (6 million) shares of the
Common Stock of Finet. Those shares have been subjected to a reverse split of
one for two, thereby causing Cumberland to now hold of record three million (3
million) of said shares (the "Shares").
B. Finet is willing and able to redeem the Shares for a price of one
hundred eighty thousand dollars ($180,000) to be paid on or before January 30,
1997, and Cumberland desires to have the Shares redeemed.
C. The Purpose of this Agreement is to set forth the understanding
of the parties relative to the matters outlined above.
AGREEMENT
For good and valuable consideration the parties hereto hereby agree as
follows:
1. Recitals
The above Recitals are incorporated herein by this reference.
2. Redemption
Finet represents and warrants that, pursuant to the Delaware
Corporation Laws, it is able to redeem the Shares and does hereby agree to pay,
on or before January 30, 1997, the sum of $180,000 for the Shares. The sum shall
be paid in United States dollars and shall be delivered by means satisfactory to
Cumberland.
3. Title To The Shares - Delivery
Cumberland represents and warrants that it has clear title to the
Shares and that there are no liens or other encumbrances that would cloud said
title and, further, that it will deliver the Shares, duly endorsed, at the time
of the receipt of the payment of $180,000, clear and free of any liens or
encumbrances.
4. Miscellaneous
This Agreement will be binding on the successors of the parties,
may not be assigned and may be signed by use of facsimile transmission.
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IN WITNESS WHEREOF, the parties hereto have signed hereon as of the day
and year first above written.
Finet Holdings Corporation
By /s/Jan Hoeffel
Its President
Cumberland Partners
By /s/ Bruce G. Wilcox
Its General Partner
