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: July 29, 1998
(Date of earliest event reported)
NORTH EAST INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
Maine 0-11184 01-0278387
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) Identification No.)
482 Payne Road, Scarborough, Maine 04074
(Address of principal executive offices) (Zip code)
Registrant's telephone number: (207) 883-2232
ITEM 5. OTHER EVENTS.
SALE OF SHARES BY BALLANTRAE. North East Insurance Company ("NEIC" or the
"Company") has received notice of a sale by Ballantrae Partners, LLC of 810,000
shares of NEIC Common Stock, representing approximately 26.6% of the currently
outstanding shares. According to a Schedule 13D amendment filed by Ballantrae
on July 2, 1998, the sale was consummated on June 29, 1998. Ballantrae
describes the sale as having been made in four separately negotiated private
transactions. According to the filing, Ballantrae has no further ownership of
NEIC Common Stock.
With the sale of its shares, Ballantrae gave notice to the Company of its
termination of the August 22, 1996 standstill agreement with NEIC. Under
Section 5(i) of that agreement, either party may terminate the agreement if
Ballantrae's percentage ownership drops below 10% through transactions
permitted by the agreement. Section 4(a) permits Ballantrae to resell shares in
"a private sale to a person who will not (to Ballantrae's knowledge after
reasonable investigation) thereby own 10% or more of the outstanding NEIC
stock."
NEIC has also received a Schedule 13G filing by Richard H. Konrad, reporting
his purchase of 299,000 shares of NEIC Common Stock, representing approximately
9.8% of the outstanding shares. Mr. Konrad is associated with Lincluden
Management Limited, of Oakville, Ontario. Mr. Konrad's filing contains a
certification that the shares "were acquired and are held in the ordinary
course of business and were not acquired and are not held for the purpose of or
with the effect of changing or influencing the control of the issuer of the
securities and were not acquired and are not held in connection with or as a
participant in any transaction having that purpose or effect."
NEIC has been advised that Mr. Konrad is one of the four purchasers to whom
Ballantrae sold its shares. To the Company's knowledge, the other three
purchasers are The Foothold Fund, L.P. (84,000 shares), Capitol Indemnity
Corporation (299,000 shares), and Everest Partners, L.P. (128,000 shares).
Foothold had previously acquired 215,000 shares of NEIC stock in 1997.
According to an amended Schedule 13D filed by Foothold on July 7, 1998,
Foothold now owns 299,000 NEIC shares, representing approximately 9.8% of the
outstanding NEIC shares. Peter A. Russ, the president of Foothold's general
partner, was elected to the NEIC Board of Directors in May 1998 and was
re-elected to that position at the NEIC Annual Meeting of Shareholders on June
25, 1998.
The Company has received no confirmation of the total shares beneficially owned
by Capitol Indemnity or Everest Partners.
ANNUAL MEETING OF SHAREHOLDERS. At the Annual Meeting of Shareholders held on
June 25, 1998, the shareholders re-elected all members of NEIC's Board of
Directors (consisting of Edward B. Batal, Terence P. Cummings, Robert A.
Hancock, Deborah L. Harmon, Wilson G. Hess, Joseph M. Hochadel, Jonathan S.
Kern, Robert G. Schatz, Bruce H. Suter, Murry N. Gunty, and Peter A. Russ. The
shareholders also rejected a proposed staggered board amendment, ratified the
appointment of auditors, approved a charter amendment to increase the number of
authorized shares of Commmon Stock, and rejected a proposed increase in the
number of authorized shares under NEIC's existing Stock Option Plan.
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.
NORTH EAST INSURANCE COMPANY
Date: July 10, 1998 By: /s/ Robert G. Schatz
President and Chief
Executive Officer
