SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. __)(1)
North East Insurance Company
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(Name of Issuer)
Common Stock, par value $1.00 per share
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(Title of Class of Securities)
659164107
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(CUSIP Number)
Kenneth L. Henderson
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Tel. No.: (212) 541-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 29, 1997
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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 /_/.
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.
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(1) 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 (the "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).<PAGE>
CUSIP No. 659164107 13D Page 2 of 5 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
The Foothold Fund, L.P. (52-1662880)
_______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /_/
(b) /X/
_______________________________________________________________________________
3 SEC USE ONLY
_______________________________________________________________________________
4 SOURCE OF FUNDS*
WC
_______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) /_/
_______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
_______________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 215,000
SHARES __________________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
_________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 215,000
_________________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
_____________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
215,000
_____________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* /_/
_____________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.2%
_____________________________________________________________________________
14 TYPE OF REPORTING PERSON*
PN
_____________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT
Item 1. Security and Issuer.
This statement on Schedule 13D (the "Schedule 13D") relates to the shares
of Common Stock, par value $1.00 per share (the "Common Shares"), of North East
Insurance Company, a Maine corporation ("North East").
The principal executive offices of North East are located at 482 Payne
Road, Scarborough, Maine 04074.
Item 2. Identity and Background.
This Schedule 13D is being filed by The Foothold Fund, L.P. ("Foothold"),
a New York limited partnership, with a principal business and principal office
located at 408 Route 22, Unit 2, North Salem, New York 10560.
The sole general partner of Foothold is The Foothold Management Corp.
("Foothold Management"), a New York corporation. The address of the principal
business and principal office of Foothold Management is 408 Route 22, Unit 2,
North Salem, NY 10560. Foothold and Foothold Management are principally
engaged in investing in various publicly-traded companies.
Mr. Peter A. Russ is the President, sole director and sole shareholder of
Foothold Management. The business address of Mr. Peter A. Russ, a United
States citizen, is 408 Route 22, Unit 2, North Salem, NY 10560 and his present
principal employment is as a securities analyst with Shelby Cullom Davis & Co.,
L.P., a securities brokerage firm, with an address at 609 Fifth Avenue, New
York, NY 10017.
None of Foothold, Foothold Management or Peter A. Russ has, during the
last five (5) years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or been a party to a civil proceeding
resulting in its or his being subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, the federal or state securities laws or finding any violations with respect
to such laws.
Item 3. Source and Amount of Funds.
The purchase price for the 215,000 Common Shares purchased by Foothold was
$419,250.00. The funds used by Foothold to purchase such Common Shares were
obtained from the working capital of Foothold.
Item 4. Purpose of Transaction.
Foothold is acquiring the Common Shares for investment purposes and not
for the purpose of acquiring control of North East. Foothold does not have any
current plans or proposals which relate to or would result in any of the events
described in Items (a) through (j) of Item 4 of Schedule 13D. Depending on
market and other considerations, Foothold may elect to acquire additional
Common Shares or other securities of North East or to dispose of all or a
portion of the Common Shares or other securities it may hereinafter acquire.
Item 5. Interest in the Securities of the Issuer
Pursuant to the terms of a Memorandum of Agreement described in Item 6
below, Foothold has purchased 215,000 Common Shares, representing approximately
7.20% of the outstanding Common Shares. Foothold has sole voting and
dispositive power with respect to all such Common Shares.
Other than Foothold's acquisition of the Common Shares described in this
Schedule 13D, none of Foothold, Foothold Management or Peter Russ, presently
owns any Common Shares or has effected any transaction in the Common Shares
during the past sixty (60) days.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Pursuant to the terms of a Memorandum of Agreement by and between Official
Committee of Unsecured Creditors of American Motor Club, Inc., the duly
constituted and official committee of unsecured creditors of American Motor
Club, Inc. in proceedings captioned In re: American Motor Club, Inc., Case No.
887-70763-2063 and Foothold, dated July 29, 1997, Foothold purchased 215,000
Common Shares for the aggregate purchase price of $419,250.00 The Memorandum
of Agreement was executed at the conclusion of a public auction conducted on
July 29, 1997 at which Foothold was the highest bidder. Pursuant to the terms
of the Memorandum of Understanding, Foothold paid $50,000 at the time of the
public auction and the balance of $369,250 on August 4, 1997.
Except as described in this Item 6, Foothold does not have any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
other person with respect to the securities of North East, including, without
limitation, any agreements concerning (i) transfer or voting of any Common
Shares, (ii) finder's fees, (iii) joint ventures, (iv) loan or option
arrangements, (v) puts or calls, (vi) guarantees of profits, (vii) division of
profits or losses or (viii) the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
Exhibit 7.1 Memorandum of Agreement by and between Official Committee
of Unsecured Creditors of American Motor Club, Inc., the
duly constituted and official committee of unsecured
creditors of American Motor Club, Inc. in proceedings
captioned In re: American Motor Club, Inc., Case No. 887-
70763-2063 and The Foothold Fund, L.P., dated July 29,
1997.
Signature
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.
Dated: August 5, 1997
THE FOOTHOLD FUND, L.P.
By: THE FOOTHOLD MANAGEMENT CORP.,
its General Partner
By: /s/ Peter A. Russ
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Name: Peter A. Russ
Title: President
MEMORANDUM OF AGREEMENT
Agreement made by and between Official Committee of Unsecured
Creditors of American Motor Club, Inc., the duly constituted and official
committee of unsecured creditors of American Motor Club, Inc. in proceedings
captioned In re: American Motor Club, Inc., Case No. 887-70763-260 (hereinafter
"AMC") and The Foothold Fund, LP of New York (hereinafter "Purchaser").
1. By virtue of and in execution of an Order dated April 17, 1997
entered in the Superior Court, Cumberland County, Civil Action Docket Nos. CV-
96-486 and CV-96-549 and pursuant to a Notice of Public Auction for Sale of
Stock of North East Insurance Company published in the Portland Press Herald on
July 8, July 15, and July 22, 1997, and duly posted, the Purchaser hereby
agrees to purchase Two Hundred Fifteen Thousand (215,000) shares of stock of
North East Insurance Company which shares of stock are subject to the aforesaid
Order.
2. The Purchaser shall pay to the AMC the sum of $419,250.00 as
follows: $50,000 at the time of the public auction, which deposit must be
increased to ten percent of the purchase price within two days of the public
sale, which total deposit is nonrefundable, the receipt whereof is hereby
acknowledged by AMC, and the balance at the time of closing by certified or
cashier's check. In the event that Purchaser fails to make the payment of the
balance due within forty-eight hours of notification from AMC that the shares
of North East Insurance Company stock purchased by Purchaser have been issued
to said Purchaser, the deposit of $50,000 (plus the increase to ten percent of
the purchase price) deposited herewith shall be retained by AMC as liquidated
damages. Any interest earned on such deposit as increased shall be retained by
AMC and shall not be applied to the purchase price.
3. At closing, the Purchaser shall pay all expenses of transfer,
including without limitation, any and all taxes associated therewith.
4. If Purchaser shall default in the making of any payment herein
required or shall fail to comply with any term, condition or covenant of this
Memorandum of Agreement, AMC, in addition to any other rights set forth in this
Memorandum of Agreement, shall retain the deposit (as increased) as liquidated
damages, declare Purchaser's rights under this Memorandum of Agreement
terminated and may resell the shares of stock to the next highest bidder or
readvertise the North East Insurance Company shares of stock for sale, at AMC's
option. AMC and Purchaser agree that the damages which would be caused to AMC
by Purchaser's breach of this Memorandum of Agreement are difficult to estimate
accurately and that the deposit amount as increased is a reasonable forecast of
the minimum amount necessary to justly compensate AMC for Purchaser's breach.
5. Purchaser shall not have any right to assign this Memorandum of
Agreement.
6. No term or condition of this Memorandum of Agreement shall be
modified except by agreement in writing executed by AMC and Purchaser.
7. Purchaser acknowledges and agrees that AMC has not made and does
not make any representations or warranties regarding marketability,
tradeability, transferability or any other matter whatsoever pertaining to the
shares of North East Insurance Company stock. Purchaser acknowledges that
Purchaser has been provided with the opportunity to investigate all matters
pertaining to the shares of North East Insurance Company stock.
Notwithstanding anything to the contrary contained herein, all rights relating
to the stock of North East Insurance Company, as set forth in the Order, dated
April 17, 1997, are incorporated herein.
8. This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of Maine.
9. This Memorandum of Agreement represents the entire understanding
of the parties hereto. AMC and Purchaser acknowledge that neither is relying
upon any statement or representation, written or oral, of any party or person
which has not been embodied in this Agreement.
In witness whereof, the parties have hereby set their hands and seals
on July 29, 1997.
OFFICIAL COMMITTEE OF
UNSECURED CREDITORS OF
AMERICAN MOTOR CLUB, INC.
- ----------------------------- By:/s/ Barry Carus
Witness ---------------------------------
Barry Carus, Its Attorney
THE FOOTHOLD FUND, LP
- ----------------------------- By:/s/ Peter Russ
Witness ---------------------------------
Peter Russ, Its General Partner
