<PAGE>
UNITED STATES
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
September 29, 1998
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Date of Report (Date of Earliest Event Reported)
WESTERN BANCORP
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(Exact Name of Registrant As Specified In Its Charter)
CALIFORNIA
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(State or Other Jurisdiction of Incorporation)
0-13551 95-3863296
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(Commission File Number) (IRS Employer Identification No.)
4100 Newport Place, Suite 900
Newport Beach, California 92660
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(Address of Principal Executive Offices)(Zip Code)
(949) 863-2444
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(Registrant's Telephone Number, Including Area Code)
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 September 29, 1998, Western Bancorp ("Western") and Bank of Los Angeles
("BKLA") announced the rescheduling of the closing of the proposed merger of
BKLA with and into Santa Monica Bank, a wholly owned subsidiary of Western. A
copy of the press release issued by BKLA in connection with the announcement is
attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by
reference. On October 2, 1998, BKLA filed a Current Report on Form 8-K with the
Federal Deposit Insurance Corporation describing a pending lawsuit. A copy of
the Current Report is attached hereto as Exhibit 99.2 and is incorporated herein
in its entirety by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed with this Current Report on Form 8-K:
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
99.1 Press Release of Bank of Los Angeles, dated September 30, 1998.
99.2 Current Report on Form 8-K dated October 1, 1998.
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 hereunder duly authorized.
Dated: October 2, 1998
WESTERN BANCORP
By: /s/ Arnold C. Hahn
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Name: Arnold C. Hahn
Title: Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
99.1 Press Release of Bank of Los Angeles, dated September 30, 1998.
99.2 Current Report on Form 8-K dated October 1, 1998.
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EXHIBIT 99.1
BANK OF LOS ANGELES
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PRESS RELEASE
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Bank of Los Angeles (NASDAQ: BKLA)
8901 Santa Monica Boulevard
West Hollywood, California 90069
Contact: Adriana M. Boeka John J. Feldman
Chairman of the Board President & Chief Executive Officer
Phone: 310/843-1480 310/843-1460
FAX: 310/843-1498
FOR IMMEDIATE RELEASE
September 30, 1998
West Hollywood, California. . . . . Bank of Los Angeles (BKLA): Bank of Los
Angeles, West Hollywood, California and Western Bancorp, Newport Beach,
California announced today that in accordance with the terms of the Agreement
and Plan of Merger dated July 16, 1998, between Western Bancorp, Santa Monica
Bank and Bank of Los Angeles, Western Bancorp has determined to reschedule the
closing of the proposed merger between Santa Monica Bank and Bank of Los Angeles
to October 30, 1998 or sooner, in order to permit Western Bancorp and Santa
Monica Bank to more fully evaluate a lawsuit pending against Bank of Los Angeles
alleging lender liability, among other claims.
The complaint seeks, among other claims, alleged damages of $30,000,000.
Although the Bank of Los Angeles continues to believe that plaintiffs' claims
are without merit, negotiations have not achieved a mutually agreeable
settlement. The lawsuit is currently scheduled to go to trial on November 2,
1998. The rescheduling of the closing of the proposed merger to October 30,
1998, will permit Western Bancorp and Santa Monica Bank further opportunity to
evaluate this lawsuit and its impact.
For further information, please contact Adriana M. Boeka at Bank of Los Angeles
(310) 843-1480 and Julius Christensen at Western Bancorp (949) 863-2459.
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EXHIBIT 99.2
FEDERAL DEPOSIT INSURANCE CORPORATION
Washington, D. C. 20006
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 30, 1998
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(Date of Report)(Date of Earliest Event)
BANK OF LOS ANGELES
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(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA
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(State or Other Jurisdiction of Incorporation)
(310) 843-1455
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(Registrant's Telephone Number, Including Area Code)
23790 95-3612029
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(FDIC Certificate Number) IRS Employer Identification No.)
8901 Santa Monica Boulevard
West Hollywood, California 90069
(Address of Principal Executive Offices) (Zip Code)
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ITEM 5. OTHER EVENTS
On September 30, 1998 Bank of Los Angeles, West Hollywood,
California, ("Registrant") and Western Bancorp, Newport Beach, California
announced that in accordance with the terms of the Agreement and Plan of
Merger dated July 16, 1998, between Western Bancorp, Santa Monica Bank and
Registrant, Western Bancorp had determined to reschedule the closing of the
proposed merger between Santa Monica Bank and Registrant to October 30, 1998,
or sooner, in order to permit Western Bancorp and Santa Monica Bank to more
fully evaluate a lawsuit pending against Registrant alleging lender
liability, among other claims.
The lawsuit seeks alleged damages in excess of $30,000,000. Although
Registrant continues to believe that plaintiffs' claims are without merit,
negotiations have not achieved a mutually agreeable settlement. The lawsuit
is currently scheduled to go to trial on November 2, 1998. The rescheduling
of the closing of the proposed merger to October 30, 1998, will permit
Western Bancorp and Santa Monica Bank further opportunity to evaluate this
lawsuit and its impact.
The lawsuit arose from a lending relationship which originated between
World Trade Bank ("WTB") and Smart Clothes, Inc. ("Smart"). Registrant
acquired the relationship as a result of the merger of WTB into Registrant,
which occurred on or about November 15, 1995.
According to the Complaint, Smart entered into negotiations with WTB to
obtain working capital and receivable/inventory financing in October, 1994.
Smart alleges that a loan commitment was made in February, 1995, outlining
approval of a $500,000 SBA loan and receivable/inventory financing up to
$1,000,000. On June 6, 1995, WTB tentatively approved the SBA loan, subject
to final SBA approval and compliance with further covenants. SBA gave its
approval on a working capital loan on August 2, 1995.
Smart alleges that the loan package did not include a provision for
receivable/inventory financing or a provision for subordination to another
lender for that purpose. Smart further alleges that it was represented that
WTB would consent to subordination.
Smart contends that it lost immediate sales and income from the alleged
failure of WTB to subordinate its collateral position to another lender and
contends that Smart's subsequent failure was a direct result of the lack of a
subordination agreement. The Complaint asserts seven causes of action for
(1) breach of loan agreement; (2) promissory estoppel; (3) intentional
misrepresentation and concealment, (4) negligent misrepresentation and
concealment; (5) rescission of guarantee; (6) reformation; and (7)
interference with contractual relations. The Complaint seeks damages
according to proof at time of trial, estimated to be in excess of
$30,000,000, based upon claims of lost profits.
Registrant asserts, by way of defense, that WTB never made any
commitment to fund the receivable/inventory financing and the loan
documentation clearly indicated that WTB would not subordinate its position
to any other receivable/inventory financing lender, nor was any
representation to that effect ever made by WTB personnel. Additionally, the
borrower was fully aware of WTB's non-subordination position and was so
advised by borrower's own legal counsel prior to signing the loan documents.
Registrant has filed a cross-complaint against the borrower and the
guarantors to collect the loan. If a reasonable settlement cannot be
reached, registrant intends to vigorously defend the matter and remains
confident that it will prevail at trial.
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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 hereunder duly authorized.
Dated: October 1, 1998
BANK OF LOS ANGELES
By: /s/ Adriana M. Boeka
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Name: Adriana M. Boeka
Title: Chairman of the Board
