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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
WESPAC INVESTORS TRUST III
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(Name of Issuer)
Shares of Beneficial Interest, no par value
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(Title of Class of Securities)
95103-21-01
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(CUSIP Number)
F. Terry Shumate
Nevada Sea Investments, Inc.
10670 North Central Expressway, Suite 501
Dallas, Texas 75231
(214) 750-5800
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
December 16, 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 Rules 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.
* 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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CUSIP NO. 95103-2101
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nevada Sea Investments, Inc. 75-2604949
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
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7 SOLE VOTING POWER
NUMBER OF 5,284,472
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 5,284,472
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,284,472
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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)
50%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDED BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND SIGNATURE ATTESTATION.
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ITEM 1. SECURITY AND ISSUER.
This Amendment No. 1 to Statement on Schedule 13D ("Amendment No. 1") is an
amendment to, and complete restatement of, Schedule 13D for date of event of
June 27, 1995 filed with the Securities and Exchange Commission (the
"Commission") on July 24, 1995 and relates to shares of beneficial interest, no
par value (the "Shares") of Wespac Investors Trust III (the "Issuer" or
"Wespac"), a California real estate investment trust which had its principal
executive offices located at West 4301 Sunset Highway, Spokane, Washington
99204 until September 24, 1996, and now has its principal executive offices
located at 10670 North Central Expressway, Suite 501, Dallas, Texas 75231.
The Issuer is a California business trust originally formed August 22,
1983. During January 1988, four of the elected trustees resigned pursuant to
an agreement with U.S. Real Estate Advisers, Inc. ("USREA"), a privately held
California corporation and four new trustees were elected, all of whom were
officers of USREA. Also, during January 1988 the Issuer entered into certain
financing arrangements with USREA and on April 13, 1988 the Trustees who were
also officers of USREA caused Wespac to file for protection under Chapter 11 of
the United States Bankruptcy Code (the "1988 Reorganization") which resulted in
a plan of reorganization approved and confirmed by the court on March 29, 1989
with certain amendments. The 1988 Reorganization was closed by the bankruptcy
court on August 21, 1992.
On January 27, 1994, the Issuer again instituted a Chapter 11 bankruptcy
proceeding styled In Re Wespac Investors Trust III, Case No. 94-00228-K11,
pending in the United States Bankruptcy Court for the Eastern District of
Washington (the "Bankruptcy Proceeding"), to seek a restructuring of the assets
and liabilities of Wespac, in response to certain litigation that resulted in
at least one judgment. A plan of reorganization dated March 22, 1996 (as
modified) was confirmed by Order Confirming Plan of Reorganization dated May
15, 1996, entered May 20, 1996 (the "Confirmed Plan"). During the process of
consummation of the Confirmed Plan, and on the eve of issuance of the final
decree with respect to the Confirmed Plan, and emergence from the Bankruptcy
Proceeding, the Board of Trustees of the Issuer by motion filed October 29,
1996 sought a modification of the Confirmed Plan which resulted in the entry of
an Order of the Court approving the First Modification to Plan of
Reorganization (as modified) (the "Modification").
Pursuant to the Confirmed Plan, Class 6 consisted of the Allowed Interests
of former public Shareholders in "Old Common Stock," all of which was cancelled
on the Effective Date of the Confirmed Plan (June 15, 1996) with one share of
beneficial interest of the Issuer deemed to be exchanged for each share of
Allowed Interest, other than Greenbriar Corporation, who were then
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to hold in the aggregate 25% of the New Shares of Beneficial Interest. After
objections to proofs of interest demonstrating an interest in another entity,
it was determined that the Allowed Interests of such holders were equivalent to
2,642,236 Shares of Beneficial Interest.
Also, pursuant to the Confirmed Plan, upon the Effective Date, Greenbriar
Corporation reduced its claim to the so called "USREA Shares" acquired from S.
A. Zemco Management, PLC ("Zimco") to equal 25% of the Allowed Interests (a
total of 2,642,236 Shares of Beneficial Interest) and Nevada Sea Investments,
Inc. ("Nevada Sea") was deemed to exercise an option to receive all such Shares
of Beneficial Interest. In addition, in the compromise of its creditor's
claim, Greenbriar Corporation was to receive, pursuant to the Confirmed Plan,
50% of the issued and outstanding Shares of Beneficial Interest, but prior to
the Effective Date of the Confirmed Plan, by agreement, Greenbriar Corporation
entered into an arrangement pursuant to which Greenbriar Corporation conveyed
to Nevada Sea an undivided 50% in and to the creditor's claim resulting in an
undivided 25% out of an aggregate of 50% of the New Shares of Beneficial
Interest of the Issuer to be issued, on a "when issued" basis, to Nevada Sea in
consideration of cancellation of certain indebtedness. As a result, prior to
the implementation of the procedures set forth in the Modification and as of
November 29, 1996, there were deemed to be 10,568,944 Shares of Beneficial
Interest, no par value of the Issuer, available for issuance to Shareholders,
of which 2,642,236 Shares were issuable to public shareholders (an aggregate of
25% of such Shares), 2,642,236 Shares were issuable to Greenbriar Corporation
(an aggregate of 25% of such shares), and 5,284,472 Shares of Beneficial
Interest were issuable to Nevada Sea (an aggregate of 50% of such shares).
In order to ensure that the correct number of Shares are issued to
Greenbriar Corporation and Nevada Sea, the Issuer and Nevada Sea have entered
into that certain Share Settlement Agreement dated as of May 31, 1996 (the
"Share Settlement Agreement") pursuant to which, in the event it is determined
for whatever reason either too many or too few Shares have been issued to
Nevada Sea and/or Greenbriar Corporation so that either or both hold in excess
of or less than the required number of issued and outstanding Shares of the
Issuer pursuant to the Confirmed Plan when such Shares are issued, the Issuer
has agreed to either issue additional Shares or Nevada Sea (and/or Greenbriar
Corporation) are to return to the Issuer for cancellation such number of Shares
as will make the percentages work out to the required percentages pursuant to
the Confirmed Plan.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f). This Amendment No. 1 is filed by Nevada Sea, a Nevada
corporation which has its principal executive
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offices located at 10670 North Central Expressway, Suite 501, Dallas, Texas
75231. Nevada Sea's principal business is investment in real estate. The
name, business address, present principal occupation or employment, and the
name and address of the corporation or organization in which each such
occupation, position, office or employment is conducted, of each of the
executive officers or directors of Nevada Sea are set forth on Schedule 1
attached hereto. Each of such individuals listed on Schedule 1 is a citizen of
the United States of America.
(d) During the last five years, neither Nevada Sea nor any of its
executive officers or directors has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the last five years, neither Nevada Sea nor any of its
executive officers of directors has been a party to any civil proceeding of a
judicial or administrative body of competent jurisdiction which resulted in a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The funds utilized to originally acquire an option from Greenbriar
Corporation came from Nevada Sea's working capital. Nevada Sea agreed to pay
$450,000 to Medical Resources Companies of America (now known as Greenbriar
Corporation) on July 27, 1995 as a fee for receiving the original option
granting to Nevada Sea the right to acquire certain Shares.
ITEM 4. PURPOSE OF TRANSACTION.
Nevada Sea acquired the Shares described under Items 1 and 5 in order to
assume day-to-day operating control and management of the Issuer and to attempt
to resolve the Bankruptcy Proceeding through the proposing and effectuating of
the Confirmed Plan and the Modification. Nevada Sea has no present plans or
proposals which would result in Nevada Sea seeking to acquire the entire equity
interest in the Issuer. Except as set forth in this Amendment No. 1, Nevada
Sea has no present plans or proposals which relate to or would result in:
(a) the acquisition by any person of any additional securities of
the Issuer or the disposition of securities of the Issuer, except to the
extent such action is incidental to the "Incorporation Procedure" described
in the Modification and below; or
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Issuer
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except as set forth and described in the Modification and below; or
(c) a sale or transfer of a material amount of assets of the
Issuer, except to the extent that same occurs by operation of law pursuant
to the Incorporation Procedure described in the Modification and below; or
(d) a change in the present Board of Trustees or management of the
Issuer, including any plans or proposals to change the number or term of
trustees or fill any existing vacancies on the Board except that the
following individual who are also officers of Nevada Sea or one of its
affiliates have been elected as of June 19, 1996 as two of the members of
the Board of Trustees to fill vacancies created by prior resignations and
to ensure that at least three members of the Board of Trustees would exist:
Karl L. Blaha
F. Terry Shumate
the effect of which was to fill existing vacancies on the Board of Trustee;
or
(e) any material change in the present capitalization or dividend
policy of the Issuer, except to the extent that the incidental effect to
such items might occur pursuant to the Incorporation Procedure described in
the Modification and below; or
(f) any other material change in the Issuer's business or
corporate structure, except to the extent that the Incorporation Procedure
described in the Modification and below might have such effect; or
(g) changes in the Issuer's Charter, Bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person, except that a change in the Charter
and Bylaws of the Issuer will occur through the Incorporation Procedure
described in the Modification and below which would have the effect of
making it more difficult for persons to obtain control of the Issuer in the
future; or
(h) causing a class of securities of the Issuer to be de-listed
from a national securities exchange or cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association; or
(i) a class of equity securities of the Issuer becoming eligible
for termination of registration pursuant
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to Section 12(g)(4) of the Securities Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
The effect of the Modification was to distribute to the shareholders of the
Issuer a proposal to convert Wespac from a California business trust into a
Nevada corporation through the "Incorporation Procedure" described therein,
coupled with a change of the name of the Issuer. Such proposal was distributed
to the shareholders of the Issuer who, by November 29, 1996, approved the
proposal by a vote in excess of 84% in favor. The "Incorporation Procedure" is
in the process of implementation as of December 16, 1996 which is the date of
certification of results of the balloting to the Court in the Bankruptcy
Proceeding.
A simplified explanation of the "Incorporation Procedure" is that Wespac
will be incorporated in California pursuant to Section 200.5 of the California
Corporation Code under the name Wespac Property Corporation (the "California
Corporation") and the California Corporation (as successor to Wespac) will then
be merged with and into a wholly-owned Nevada subsidiary corporation (the
"Merger"), with the Nevada corporation being the survivor to such Merger. The
Board of Trustees of Wespac is causing the Nevada corporation to be organized
in Nevada under the name First Equity Properties, Inc. which will be the name
of the resulting entity. Prior to the Merger, such Nevada corporation will
have no significant business assets or liabilities of any consequence and no
operating history. Under Section 200.5 of the California Corporation Code,
which governs the process of incorporating a business trust, following the
approval of the affirmative vote of a majority of the outstanding shares of
beneficial interest, such existing trust may then file articles of
incorporation with a certificate attached, signed by certain officers of that
trust, stating that the incorporation of the association has been approved by
the trustees and the required vote of the shareholders, and upon the filing of
the articles of incorporation pursuant to that section, the resulting
California Corporation succeeds automatically to all of the rights and
properties of Wespac and become subject to all of its debts and liabilities in
the same manner as if the California Corporation had itself incurred them. The
current three trustees of Wespac constitute the initial directors of the
California Corporation and the Nevada corporation and all rights of creditors
and all liens upon property of Wespac are preserved unimpaired. Any action or
proceeding pending by or against Wespac may be prosecuted at judgment, which
shall bind the California Corporation or the California Corporation may be
proceeded against or substituted in its place. Under Section 200.5(e), filing
for record in the office of the county recorder of any county in the State of
California in which any of the real property of any such trust
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is located and a copy of the articles of incorporation certified by the
Secretary of State shall evidence record ownership in the California
Corporation of all interests of the association in and to the real property
located in that county. Following the incorporation of Wespac into the
California Corporation, the Merger is accomplished by articles of merger and a
plan of merger filed in the States of California and Nevada. The surviving
corporation (in this instance the Nevada corporation) automatically, by
operation of law, succeeds to all of the assets, rights, duties, liabilities
and obligations of the California Corporation (as successor to Wespac) upon the
effectiveness of the Merger.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of December 16, 1996, an aggregate of 5,284,472 Shares of
Beneficial Interest of the Issuer were issuable to Nevada Sea, which
constitutes an aggregate of 50% of the total number of 10,568,944 Shares of
Beneficial Interest, no par value of the Issuer to be issued pursuant to the
Confirmed Plan and the Modification.
(b) Nevada Sea has the sole power to vote 5,284,472 Shares of Beneficial
Interest of the Issuer and, subject to compliance with applicable securities
laws, Nevada Sea will have the sole power to dispose of all of such 5,284,472
Shares of Beneficial Interest of the Issuer.
(c) During the 60 calendar days ended December 16, 1996, except for the
Share Settlement Agreement and any incidental matters occurring under the
Modification and the Incorporation Procedure described therein, Nevada Sea did
not engage in any transaction in the Shares of Beneficial Interest of the
Issuer or any other equity interest derivative thereof.
(d) No person other than Nevada Sea or its Board of Trustees is known to
have the right to receive or the power to direct receipt of dividends from, or
the proceeds from the sale of, the 5,284,472 Shares of Beneficial Interest
issuable to Nevada Sea.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
By agreement effective May 12, 1995, Greenbriar Corporation (then known as
Medical Resource Companies of America) granted an option to Nevada Sea to
purchase a judgment from California Court (the "Judgment") against Wespac and
all of Greenbriar Corporation's claim against Wespac in the Bankruptcy
Proceeding, which option was in lieu of any other agreement among the parties,
written or verbal, relating to Wespac (the "Original Option").
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As a result of various negotiations among creditors in the Bankruptcy
Proceeding, for the benefit of all future creditors and shareholders of Wespac,
Greenbriar Corporation and Nevada Sea rescinded ab initio, as of the time of
its original issuance the Original Option; Greenbriar Corporation retained the
consideration paid for the Original Option; and at the time of execution of a
letter agreement dated May 31, 1996, Greenbriar Corporation conveyed to Nevada
Sea an undivided 50% interest in and to the Judgment and the Claim which
resulted in an undivided interest of 25% out of an aggregate of 50% of new
shares of Beneficial Interest of Wespac referred to in the Confirmed Plan as
"New Common Stock" on a "when issued" basis. As a part of such arrangement,
Greenbriar Corporation covenanted and agreed that it would not, without the
prior written consent of Nevada Sea, sell or dispose of any of the 25% of total
Wespac shares of Beneficial Interest which Greenbriar Corporation was to
receive under the Confirmed Plan.
Except to the extent that Nevada Sea's participation in the Confirmed Plan,
the Modification or vote in favor of the Incorporation Procedure might be
considered to be a contract, arrangement, understanding or relationship among
Nevada Sea and certain other persons with respect to securities of the Issuer,
all as described in Items 1 and 4 above, Nevada Sea has not entered into any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any other person with respect to any securities of the Issuer including,
but not limited to, a transfer or voting of the securities, finders' fees,
joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies.
See also Item 1 above and the Original Option Agreement dated June 27, 1995
between Greenbriar Corporation and Nevada Sea previously filed as an exhibit to
the original Schedule 13D dated July 21, 1995 concerning the so-called "USREA
Shares" acquired from Zemco. Such option was deemed exercised pursuant to the
Confirmed Plan.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following is filed herewith as exhibits or incorporated by reference as
indicated below.
<TABLE>
<CAPTION>
Exhibit
Designation Exhibit Description
----------- -------------------
<S> <C>
99.1 Option Agreement dated as of June 27, 1995 between Medical
Resource Companies of America (n/k/a Greenbriar Corporation) and
Nevada Sea Investments, Inc. (incorporation by reference is made
to Schedule 13D for date of event June 27, 1995 filed by Nevada
Sea Investments, Inc. on July 24, 1995)
99.2* Letter Agreement dated May 31, 1996 between Greenbriar Corporation
and Nevada Sea Investments, Inc.
</TABLE>
__________________________________
* Filed herewith
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: January 28, 1997 NEVADA SEA INVESTMENTS, INC.
By: /s/ F. TERRY SHUMATE
------------------------------------
F. Terry Shumate,
Vice President, Secretary
and Treasurer
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SCHEDULE 1
EXECUTIVE OFFICERS AND DIRECTORS
OF NEVADA SEA INVESTMENTS, INC.
NAME AND CAPACITY WITH
NEVADA SEA INVESTMENTS, INC. BUSINESS ADDRESS
- ---------------------------- ----------------
Bradford A. Phillips, 10670 North Central
Director and President Expressway, Suite 300,
Dallas, Texas 75231
F. Terry Shumate, Director, 10670 North Central
Chairman of the Board, Vice Expressway, Suite 501,
President, Secretary and Dallas, Texas 75231
Treasurer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Designation Exhibit Description
- ----------- -------------------
<S> <C>
99.1 Option Agreement dated as of June 27, 1995 between Medical
Resource Companies of America (n/k/a Greenbriar Corporation) and
Nevada Sea Investments, Inc. (incorporation by reference is made
to Schedule 13D for date of event June 27, 1995 filed by Nevada
Sea Investments, Inc. on July 24, 1995)
99.2* Letter Agreement dated May 31, 1996 between Greenbriar Corporation
and Nevada Sea Investments, Inc.
</TABLE>
__________________________________
* Filed herewith
<PAGE> 1
EXHIBIT 99.2
NEVADA SEA INVESTMENTS, INC.
10670 N. Central Expressway
Suite 501
Dallas, TX 75231
214/750-5800
214/361-0964 FAX
May 31, 1996
Greenbriar Corporation
(formerly Medical Resource
Companies of America)
4265 Kellway Circle
Addison, TX 75248
Attention: President
RE: Wespac Investors Trust III
Gentlemen:
By agreement effective May 12, 1995, Greenbriar Corporation (formerly Medical
Resource Companies of America) ("Greenbriar") granted an option to Nevada Sea
Investments, Inc. ("Nevada Sea") to purchase a judgement form a California
court (the "Judgement") against Wespac Investors Trust III ("Wespac") and all
of Greenbriar's claim against Wespac in bankruptcy proceedings in the United
States Bankruptcy Court for the Eastern District of Washington (Case No.
94-00228-K11), including any stock, property or rights resulting therefrom
(the "Claim"), which option was in lieu of any other agreement among the
parties, written or verbal, relating to Wespac (the "Original Option"). As a
result of the various negotiations among the creditors in the bankruptcy
proceeding, for the benefit of all future creditors and shareholders of Wespac,
Geenbriar and Nevada Sea have determined that the Original Option should be
rescinded and terminated.
Subject to all of the terms and conditions hereof, Greenbriar and Nevada Sea
hereby agreed as follows:
1. Rescission of Original Option. The Original Option is hereby rescinded
and declared null, void and of no further force or effect, which
declaration is deemed to occur, ab initio, as of the time of its original
issuance. Not withstanding the rescission the consideration paid for the
Original Option shall be retained by Greenbriar.
<PAGE> 2
Greenbriar Corporation
Page 2
May 31, 1996
2. Settlement of Shares. Contemporaneously with the execution of this letter
agreement, Greenbriar hereby conveys unto Nevada Sea an undivided 50%
interest in and to the Judgement and the Claim, which will result in an
undivided interest of 25% out of an aggregate of 50% new shares of
beneficial interest of Wespac referred to in the bankruptcy plan as the New
Common Stock, on a "when issued" basis.
3. No Sale of Shares. Greenbriar hereby covenants and agrees that it will
not, without the prior written consent of Nevada Sea, sell or dispose of
any of the 25% of total Wespac shares which Greenbriar receives under the
Plan.
NEVADA SEA INVESTMENTS, INC.
By: /s/ F. TERRY SHUMATE
----------------------------
GREENBRIAR CORPORATION
By: /s/ GINA S. BUTCHER
----------------------------
