<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - - ------ EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
OR
- - - ------ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 1-6802
LIBERTE INVESTORS
(Exact name of Registrant as specified in its Charter)
CREATED UNDER DECLARATION OF TRUST 75-1328153
PURSUANT TO THE LAWS OF (I.R.S. Employer
THE COMMONWEALTH OF MASSACHUSETTS Identification No.)
(State or other jurisdiction
of incorporation or organization)
1420 VICEROY DRIVE 75235
DALLAS, TEXAS (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (214) 879-5497
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES X* NO
----- -----
* The registrant's confirmed plan of reorganization did not provide for a
distribution of securities; however, all required documents and reports have
been timely filed by the Registrant both prior to and after confirmation.
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's class of securities as
of November 4, 1994: Shares of Beneficial Interest, no par - 12,423,208 shares.
<PAGE> 2
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
LIBERTE INVESTORS
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheet - September 30, 1994 and June 30, 1994 . . . . . . . . . . . . 3
Consolidated Statement of Operations - Three Months Ended
September 30, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flows - Three Months Ended
September 30, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . 7
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
INDEX TO EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
LIBERTE INVESTORS AND SUBSIDIARY
<TABLE>
<CAPTION>
September 30, 1994 June 30, 1994
(Unaudited) (See Note)
----------- ----------
<S> <C> <C>
Assets
Mortgage loans on real estate:
Earning $ 5,883,633 $ 5,858,648
Nonearning 248,918 272,308
Foreclosed real estate:
Nonearning 23,196,718 25,207,002
----------- -----------
29,329,269 31,337,958
Less: Allowance for possible losses 10,758,652 11,709,395
----------- -----------
18,570,617 19,628,563
Cash and cash equivalents 10,176,978 9,157,640
Restricted cash investments 764,493 623,300
Note receivable - RPI 5,762,453 6,000,000
Accrued interest and other receivables 291,827 324,555
Other assets 418,648 581,919
----------- -----------
$35,985,016 $36,315,977
=========== ===========
Liabilities and Shareholders' Equity
Liabilities
Accrued management fees $ 23,469 $ 19,281
Accrued liabilities 1,575,736 1,382,751
----------- -----------
1,599,205 1,402,032
Shareholders' Equity
Shares of Beneficial Interest, no par value,
unlimited authorization:
12,423,208 issued and outstanding at
September 30, 1994 and June 30, 1994 34,385,811 34,913,945
----------- -----------
$35,985,016 $36,315,977
=========== ===========
</TABLE>
NOTE: The balance sheet at June 30, 1994 has been derived from the audited
financial statements at that date.
See notes to consolidated financial statements.
3
<PAGE> 4
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
LIBERTE INVESTORS AND SUBSIDIARY
<TABLE>
<CAPTION>
Three Months Ended
September 30
--------------------------------
1994 1993
----------- -----------
<S> <C> <C>
Income
Interest $ 244,328 $ 2,075,346
Temporary investment interest 115,180 44,013
Foreclosed real estate and other 101,210 1,366,926
----------- -----------
460,718 3,486,285
----------- -----------
Expenses
Interest -- 4,467,141
Provision for possible losses 510,000 200,000
Management fees 70,621 609,175
Legal and audit 21,754 365,000
Trustees' fees and expenses 13,800 75,393
Foreclosed real estate 98,010 778,584
Debt restructure -- 1,560,398
Other 274,667 885,037
----------- -----------
988,852 8,940,728
----------- -----------
Net loss $ (528,134) $(5,454,443)
=========== ===========
Net loss per Share of
Beneficial Interest $ (.04) $ (.46)
Weighted average number of
Shares of Beneficial Interest 12,423,208 11,773,208
Cash dividends declared per share -- --
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
LIBERTE INVESTORS AND SUBSIDIARY
<TABLE>
<CAPTION>
Three Months Ended
September 30
---------------------------------
1994 1993
----------- ------------
<S> <C> <C>
Operating activities:
Net loss $ (528,134) $(5,454,443)
Noncash expenses and revenues included in net loss:
Provision for possible losses 510,000 200,000
Net change in other receivables, assets and liabilities 708,379 5,427,743
----------- -----------
Net cash provided by operating activities 690,245 173,300
----------- -----------
Investing activities:
Collections on mortgage loans 24,285 8,388,880
Collections on RPI note receivable 237,547 --
Advances on mortgage loans (38,536) (154,460)
Expenditures on foreclosed real estate (60,502) (377,921)
Sales and basis reductions of foreclosed real estate 307,492 3,320,835
Net purchases of restricted cash investments (141,193) (5,199,448)
----------- -----------
Net cash provided by investing activities 329,093 5,977,886
----------- -----------
Financing activities:
Decrease in notes payable -- (4,597,411)
----------- -----------
Net cash used by financing activities -- (4,597,411)
----------- -----------
Net increase in unrestricted cash and cash equivalents 1,019,338 1,553,775
Unrestricted cash and cash equivalents at beginning of period 9,157,640 2,428,902
----------- -----------
Unrestricted cash and cash equivalents at end of period $10,176,978 $ 3,982,677
=========== ===========
Schedule of noncash investing and financing activities:
Charge-offs to allowance for possible losses, net $ 1,460,743 $ 971,582
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
LIBERTE INVESTORS AND SUBSIDIARY
SEPTEMBER 30, 1994
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three months ended September 30, 1994 are not necessarily
indicative of the results that may be expected for the fiscal year ending June
30, 1995. For further information, refer to the financial statements and
footnotes included in the Annual Report on Form 10-K of Liberte Investors for
the fiscal year ended June 30, 1994 and "Item 5. OTHER INFORMATION" included
herein.
The accompanying financial statements include the accounts of Liberte Investors
and Liberte Corp., a wholly-owned subsidiary which is currently inactive. All
intercompany balances and transactions have been eliminated. As used herein,
the "Trust" refers to Liberte Investors and its subsidiary.
On October 25, 1993, the Trust filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code. On November 2, 1993,
the Trust filed with the Bankruptcy Court a disclosure statement and related
plan of reorganization. An order was entered by the Bankruptcy Court
confirming a modified plan of reorganization for the Trust on January 24, 1994.
On April 7, 1994, the Trust emerged from bankruptcy. Pursuant to the plan of
reorganization, certain assets and liabilities were transferred to Resurgence
Properties Inc. ("RPI") and RPI's common stock was distributed to the holders
of the Trust's outstanding subordinated indebtedness in full satisfaction of
such holders' claims against the Trust.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Operations resulted in a loss of $528,134 for the quarter ended September 30,
1994, compared to a loss of $5,454,443 for the same period in fiscal 1994.
Contributing to the smaller loss were decreases in substantially all expenses,
partially offset by a decrease in interest income and foreclosed real estate
income and an increase in the provision for losses. The changes in income and
expense accounts are primarily due to the transfer of assets and liabilities to
RPI upon the Trust's emergence from bankruptcy on April 7, 1994.
Interest income decreased from $2.1 million in the first quarter of fiscal 1994
to $0.2 million in the first quarter of fiscal 1995. The $1.9 million decrease
was the result of a decrease in average earning loans partially offset by an
increase in yield. Average earning loans decreased from $105.4 million with a
yield of 7.81% in the first quarter of fiscal 1994 to $5.8 million with a yield
of 9.24% in the first quarter of fiscal 1995.
Average nonearning loans for the first quarter of fiscal 1995 totaled $268,000
compared to $28.0 million for the comparable period in fiscal 1994. Assuming
that the yield on these loans would have been the same as the yield on earning
loans had they been on earning status, interest income would have been $6,000
higher in the first quarter of fiscal 1995 and $551,000 higher in the first
quarter of fiscal 1994. Also included in interest income in the first quarter
of fiscal 1995 was $108,000 of interest income on the RPI note receivable. The
average balance of the RPI loan was $5.9 million with a yield of 7.29% for the
first quarter of fiscal 1995. The Trust is continuing its efforts to reduce
nonearning assets and improve the operating performance of real estate assets.
Income on foreclosed real estate decreased as a result of all of the Trust's
earning real estate being transferred to RPI upon emergence from bankruptcy.
The Trust committed to fund one new investment origination totaling $686,000
during the quarter ended September 30, 1994. There was no new loan production
during the quarter ended September 30, 1993.
Interest expense for the first quarter of fiscal 1994 included interest on
average debt outstanding of $184.3 million with an average cost of 9.61%. Upon
the Trust's emergence from bankruptcy on April 7, 1994 and as of September 30,
1994, the Trust was debt-free.
The provision for possible losses was $0.5 million in the first quarter of
fiscal 1995 compared to $0.2 million in the first quarter of fiscal 1994. The
allowance for possible losses was $10.8 million at September 30, 1994, compared
to $11.7 million at June 30, 1994 and $53.2 million at September 30, 1993.
While the Trust believes the allowance for possible losses is adequate at
September 30, 1994, management will continue to periodically review the
portfolio using then current information to make the estimates and assumptions
that are used to determine the allowance for loan losses and the valuation of
the real estate acquired in connection with foreclosures or in satisfaction of
loans. These estimates and assumptions are susceptible to significant changes
due to changes in the market conditions upon which they are based.
7
<PAGE> 8
There was no provision for possible losses on mortgage loans in the first
quarter of fiscal 1995 compared to $0.2 million in the first quarter of fiscal
1994.
The provision for possible losses on foreclosed real estate was $0.5 million in
the first quarter of fiscal 1995 compared to no provision for possible losses
on foreclosed real estate in the first quarter of fiscal 1994. The provision
for possible losses on foreclosed real estate in the first quarter of fiscal
1995 is to provide for the charge-off of the entire net asset value on one
particular asset as the result of the expiration of development rights on
certain condominium lots and the Trust's inability to renew those rights. Any
loss incurred upon foreclosure of collateral underlying a loan is charged to
the allowance for possible losses on mortgage loans.
The following is a summary of transactions affecting the Trust's allowance for
possible losses for the three months ended September 30, 1994, compared to the
three months ended September 30, 1993:
<TABLE>
<CAPTION>
Quarter Ended September 30, 1994
-------------------------------------------------
Mortgage Foreclosed
Loans Real Estate Total
------------- ------------- -------------
<S> <C> <C> <C>
Balance July 1, 1994 $ 1,562,921 $ 10,146,474 $ 11,709,395
Provision for possible losses -- 510,000 510,000
Amounts charged off, net of recoveries 45,573 (1,506,316) (1,460,743)
------------- ------------- -------------
Balance September 30, 1994 $ 1,608,494 $ 9,150,158 $ 10,758,652
============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended September 30, 1993
-------------------------------------------------
Mortgage Foreclosed
Loans Real Estate Total
------------- ------------- -------------
<S> <C> <C> <C>
Balance July 1, 1993 $ 17,728,367 $ 36,210,450 $ 53,938,817
Provision for possible losses 200,000 -- 200,000
Amounts charged off, net of recoveries (509,622) (461,960) (971,582)
------------- ------------- -------------
Balance September 30, 1993 $ 17,418,745 $ 35,748,490 $ 53,167,235
============= ============= =============
</TABLE>
Management fees were lower in the first quarter of fiscal 1995 than in the
comparable period in fiscal 1994 because invested assets, upon which the
management fees are based, were lower in the first quarter of fiscal 1995
compared to the first quarter of fiscal 1994. The reduction in legal fees on
troubled assets and foreclosed real estate expense was a result of the transfer
of a substantial amount of foreclosed real estate to RPI upon emergence from
bankruptcy. No debt restructure costs were incurred in the first quarter of
fiscal 1995 compared to $1.6 million in the first quarter of fiscal 1994.
Other operating expense in the first quarter of fiscal 1994 included $366,000
related to the exercising of options to acquire 650,000 Shares of Beneficial
Interest by the Trust's Chief Executive Officer.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Trust expects its liquidity and earnings to continue to be adversely
affected by the current conditions in the real estate market, which has
resulted in, among other things, substantial nonearning assets and a
significant reduction in the availability of real estate financing.
Prior to its emergence from bankruptcy, the Trust's principal funding
requirements were operating expenses, interest expense and the repayment of its
indebtedness. Since emergence from bankruptcy, the Trust is debt-free and its
principal funding requirements are operating expenses. The Trust's primary
sources of funding operating expenses are its collection of principal and
interest on mortgage loans and the note receivable from RPI, consulting fees
and proceeds from the sale of foreclosed property.
Operating activities for the first three months of fiscal 1995 provided
$690,000 of cash compared to $173,000 in the first three months of fiscal 1994.
The table below reflects cash flow from operating activities (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
September 30
---------------------------
1994 1993
------ --------
<S> <C> <C>
Total income $ 461 $ 3,486
Interest expense -- (4,467)
------ --------
Net interest margin 461 (981)
Operating expenses (479) (4,274)
Net change in other receivables, assets
and liabilities 708 5,428
------ --------
Net cash provided by
operating activities $ 690 $ 173
====== ========
</TABLE>
Net cash provided by investing activities for the first three months of fiscal
1995 was $329,000 compared to $5,978,000 in the first three months of fiscal
1994. The table below reflects cash flow from investing activities (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended
September 30
---------------------------
1994 1993
------ --------
<S> <C> <C>
Collections on mortgage loans $ 24 $ 8,389
Collections on RPI note receivable 238 --
Advances on mortgage loans (39) (155)
Sales and basis reductions of foreclosed
real estate 307 3,321
Expenditures on foreclosed real estate (60) (378)
Net purchases of restricted cash
investments (141) (5,199)
------ --------
Net cash provided by investing activities $ 329 $ 5,978
====== ========
</TABLE>
9
<PAGE> 10
Amounts to be advanced under existing commitments increased from no commitments
at June 30, 1994 to $636,614 at September 30, 1994.
Debt was reduced by $4,597,000 in the first three months of fiscal 1994. At
September 30, 1993, the Trust had $83.1 million of senior indebtedness and $100
million of 10 1/2% subordinated notes outstanding. The $100 million of
subordinated notes was satisfied in full upon the Trust's emergence from
bankruptcy on April 7, 1994 and the Trust was released from liability on the
senior indebtedness assumed by RPI.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 25, 1993, the Trust filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy
Court"). On November 2, 1993, the Trust filed with the Bankruptcy Court a
disclosure statement (the "Disclosure Statement") and related Chapter 11 plan
of reorganization (the "Original Plan").
The Disclosure Statement was approved by the Bankruptcy Court on December 16,
1993, and was subsequently circulated to all holders of the Trust's senior
indebtedness, Subordinated Notes and Shares of Beneficial Interest, together
with ballots to accept or reject the Original Plan. The Trust obtained the
requisite consents to the Original Plan in January 1994, and on January 24,
1994, the Bankruptcy Court entered an order confirming a modified plan of
reorganization for the Trust (the "Plan"). On April 7, 1994, the Trust emerged
from bankruptcy. Pursuant to the Plan, certain assets and liabilities were
transferred to RPI and RPI's common stock was distributed to the holders of the
Trust's outstanding subordinated indebtedness in full satisfaction of such
holders' claims against the Trust.
11
<PAGE> 12
ITEM 5. OTHER INFORMATION
REIT STATUS
The Trust does not expect to qualify for taxation as a real estate investment
trust (a "REIT") under the Internal Revenue Code (the "Code") for its fiscal
year ending June 30, 1995. To qualify as a REIT, the Trust must satisfy
various requirements under the Code, including requirements concerning the
nature and composition of its income and assets. Generally, an entity can
qualify as a REIT only if 95% of its gross income constitutes "qualifying
income" as defined in Section 856 of the Code (the "95% Test"). The Trust does
not expect to satisfy the 95% Test for the taxable year ending June 30, 1995
due to its expected receipt of consulting fee income from RPI, which does not
constitute qualifying income. In addition, because more than 5% of the Trust's
gross income during the taxable years ending June 30, 1992 (the "1992 Year")
and June 30, 1993 (the "1993 Year"), consisted of income from an interest rate
swap and because it is uncertain whether income derived from such interest rate
swaps constitutes qualifying income, it is unclear whether the Trust satisfied
the 95% Test for the 1992 Year and the 1993 Year. The Trust believes that such
income should be treated as qualifying income for purposes of the 95% Test. In
addition, an entity qualifies as a REIT as long as the securities of any one
issuer represent less than 5% of the fair value of its total assets at any
fiscal quarter end. At this time, it is uncertain whether the Trust met this
requirement as of June 30, 1994.
If the Trust does not qualify as a REIT in any taxable year, it will be taxed
as a corporation pursuant to Subchapter C of the Code. For the fiscal years
ended June 30, 1992, 1993 and 1994, the Trust incurred a taxable loss;
therefore, it would not have a material tax liability if it did not qualify as
a REIT. In determining its potential liability for tax as a corporation in its
fiscal year ending June 30, 1995, the Trust believes, assuming it does not
undergo an ownership change that would limit the use of net operating loss
carryovers under Section 382 of the Code, that it would be able to utilize its
net operating loss carryovers and other tax benefits to shelter itself from
regular federal income taxation and, in substantial part, from alternative
minimum taxation. However, if the Trust were to undergo an ownership change
(other than an ownership change pursuant to a bankruptcy plan that meets the
requirements of Section 382(1)(5) of the Code), the ability of the Trust to use
its net operating loss carryforwards to offset income earned by the Trust after
the ownership change would be severely limited, as would the Trust's ability to
deduct losses recognized on certain sales of assets occurring after the
ownership change. Accordingly, the Trust believes that, if it ceased to
qualify as a REIT and became taxable as a regular corporation, it could incur
substantial liability for federal income taxes in the event of an ownership
change not meeting the requirements of Section 382(1)(5) of the Code.
If the Trust ceases to qualify as a REIT, funds available for distribution to
shareholders will be reduced by the amount of any tax liability payable by the
Trust to federal tax authorities. Such distributions, if any, will not be
deductible by the Trust in computing its taxable income but will be eligible
for the dividends received deduction for corporate shareholders to the extent
paid out of the Trust's current and cumulative earnings and profits. In
addition, unless entitled to relief under specific statutory provisions, the
Trust will be ineligible for REIT status for the succeeding four taxable years.
The foregoing description is general in character. For a complete description,
reference should be made to the pertinent Code sections and the Regulations
issued thereunder.
12
<PAGE> 13
TRANSFER RESTRICTIONS
In order to preserve the Trust's REIT status under the Code, there are certain
restrictions on the transfer of Shares of Beneficial Interest, with such
exceptions and pursuant to such procedures as are described in the Declaration
of Trust. For the Trust to qualify as a REIT, not more than 50% in value of
its outstanding Shares of Beneficial Interest may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year. The Shares of
Beneficial Interest must be beneficially owned by 100 or more persons during at
least 335 days of a taxable year of 12 months or during a proportionate part of
a shorter taxable year, and certain other requirements as to assets,
distributions and percentages of the Trust's gross income from particular
activities must be met. The Declaration of Trust contains provisions
prohibiting the ownership, directly or indirectly, by five or fewer individuals
of more than 50% in value of the outstanding Shares of Beneficial Interest
during the last half of the Trust's taxable year.
In order to avoid limitations on the use of the Trust's tax attributes, the
Declaration of Trust generally prohibits the transfer of Shares of Beneficial
Interest to any Person who is a holder of 5% or more of the Shares of
Beneficial Interest or to any Person who would become a holder of 5% or more of
the Shares of Beneficial Interest after giving effect to the transfer, directly
or by attribution. "Person" for this purpose is defined broadly to mean any
individual, corporation, estate, debtor, association, company, partnership,
joint venture or similar organization.
If a transfer violates this prohibition, either (i) the Shares of Beneficial
Interest that were purported to be transferred in excess of the 5% limit will
be deemed to remain the property of the initial transferor, or (ii) upon
election by the Trust, such Shares of Beneficial Interest shall be transferred
to an agent designated by the Trust, who will sell them in an arm's-length
transaction, the proceeds of such sale to be allocated to the purported
transferee up to (x) the amount paid by such transferee for such Shares of
Beneficial Interest and (y) where the purported transfer was by gift
inheritance or any similar transfer, the fair market value of such Shares of
Beneficial Interest at the time of the purported transfer.
If the purported transferee has resold the Shares of Beneficial Interest to an
unrelated party in an arm's-length transaction, the purported transferee will
be deemed to have sold the Shares of Beneficial Interest as agent for the
initial transferor, and will be required to transfer the proceeds of such sale
to the agent designated by the Trust, except to the extent that the agent
grants written permission to the purported transferee to retain a portion of
the proceeds up to the amount that would have been payable to such transferee
had the Shares of Beneficial Interest been sold by the agent rather than by the
purported transferee.
The Declaration of Trust will further provide that the Trust may require, as a
condition to the registration of the transfer of any Shares of Beneficial
Interest, that the proposed transferee furnish to the Trust all information
reasonably requested by the Trust with respect to the proposed transferee's
direct or indirect ownership interests in Shares of Beneficial Interest.
The Board of Trustees of the Trust will have the power to preapprove transfers
that would otherwise be prohibited under the foregoing provisions.
All certificates evidencing ownership of Shares of Beneficial Interest will
bear a conspicuous legend referencing the transfer restrictions.
13
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
(3.01) Extension of Management Agreement dated July 1, 1994
between Registrant, Lomas Management, Inc. and Lomas
Financial Corporation.
(27) Financial Data Schedules (submitted to the SEC for its
information).
(b) Reports on Form 8-K:
None.
14
<PAGE> 15
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 thereunder duly authorized.
LIBERTE INVESTORS
Date: November 10, 1994 By: /s/ TED ENLOE
Ted Enloe
President and Chief Executive Officer
Date: November 10, 1994 By: /s/ B. A. BREEDING
B. A. Breeding
Senior Vice President - Control
15
<PAGE> 16
LIBERTE INVESTORS
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Numbered Pages
- - - ----------- --------------
<S> <C> <C>
(3.01) Extension of Management Agreement dated
July 1, 1994 between Registrant, Lomas Management,
Inc. and Lomas Financial Corporation
(27) Financial Data Schedules (submitted to the SEC for
its information)
</TABLE>
16
<PAGE> 1
EXHIBIT 3.01
EXTENSION OF MANAGEMENT AGREEMENT
AMONG
LIBERTE INVESTORS
AND
LOMAS MANAGEMENT, INC.
AND
LOMAS FINANCIAL CORPORATION
THIS AGREEMENT, made effective as of the 1st day of July, 1994, by and
among LIBERTE INVESTORS (formerly known as LOMAS & NETTLETON MORTGAGE
INVESTORS), a real estate investment trust formed under the laws of the
Commonwealth of Massachusetts (herein called the "Trust"), Lomas Management,
Inc., a Nevada corporation (herein called the "Manager") and Lomas Financial
Corporation, a Delaware corporation (herein called "LFC"), to the Management
Agreement dated as of July 1, 1992, as amended, by and among the Trust, the
Manager and LFC (hereinafter called the "Management Agreement"):
WITNESSETH:
WHEREAS, the Management Agreement, as amended and extended, expires on
June 30, 1994, but may be extended only with the consent of the parties
thereto; and
WHEREAS, any extension of the Management Agreement must be executed in
writing by the parties thereto no more than six (6) months and no less than (3)
months before the expiration of the Management Agreement or any extension
thereof; and
<PAGE> 2
WHEREAS, the Trust, the Manager and LFC are desirous of extending the
Management Agreement in accordance with the provisions of Section 15 thereof as
set forth below:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Trust, the Manager and LFC do hereby agree and
consent (i) to a waiver of the requirement that an extension of the Management
Agreement be executed no more than six (6) months and no less than three (3)
months prior to June 30, 1994, and (ii) to an extension of the Management
Agreement upon the presently existing terms and conditions thereof or as such
may hereafter be amended in writing by the parties thereto, for an additional
twelve (12) months from and after June 30, 1994, in accordance with Section 15
of the Agreement, which period corresponds to the fiscal year of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first above written.
LIBERTE INVESTORS
By: /s/ TED ENLOE
Ted Enloe, President
LOMAS MANAGEMENT, INC.
By: /s/ CAREY B. WICKLAND
Carey B. Wickland, President
and Chief Operating Officer
LOMAS FINANCIAL CORPORATION
By: /s/ JESS HAY
Jess Hay, Chairman of the Board
and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ARTICLE 5 FDS FOR FIRST QUARTER FISCAL 1995 10-Q
</LEGEND>
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 10,941,471
<SECURITIES> 0
<RECEIVABLES> 12,186,831
<ALLOWANCES> (10,758,652)
<INVENTORY> 23,196,718
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 35,985,016
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 34,385,811
<TOTAL-LIABILITY-AND-EQUITY> 35,985,016
<SALES> 0
<TOTAL-REVENUES> 460,718
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 478,852
<LOSS-PROVISION> 510,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (528,134)
<INCOME-TAX> 0
<INCOME-CONTINUING> (528,134)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (528,134)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
