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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 16, 1997
PRIME CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-14888 363347311
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
10275 West Higgins Road, Suite 200
Rosemont, Illinois 60018
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(Address of principal executive offices) (zip code)
(847) 294-6000
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(Telephone number, including
area code, of agent for service)
No Change
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(Former name or former address,
if changes since last report)
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ITEM 5. OTHER EVENTS.
Prime Capital Corporation released the following press release:
Prime Capital Corporation (the "Company") announced that its
subsidiary, Prime Leasing, Inc. ("Prime"), filed suit in the United States
District Court for the Northern District of Illinois alleging, among other
things, that certain corporate lessees under equipment leases assigned to Prime
(the "Equipment Leases") are in default thereunder for failure to make timely
payment of the monthly rental payments due to Prime and seeking judgment
against such lessees for rental payments, late charges and interest in an
amount not less than $6.3 million. The suit also seeks to enforce certain
guarantees by individual defendants of the obligations of the lessees under the
Equipment Leases, alleges a breach of the Illinois Consumer Fraud and Deceptive
Business Practices Act (the "Illinois Act") by the corporate defendants and an
individual defendant and also alleges a conspiracy to violate the Illinois Act
by the corporate defendants and two individual defendants. The suit alleges,
among other things, that certain of the defendants violated the Illinois Act by
fraudulently misrepresenting the location, nature, existence and value of
equipment under the Equipment Leases and the operating status of six centers
where such equipment was to have been located. The suit names as defendants
Equipment Leasing Specialists, Inc., a Michigan corporation, Med Care
International, a New York corporation, Medical Imaging Systems of Arkansas,
Inc., a New York corporation, Medical Imaging Systems Inc. of Camillus, a New
York corporation, Medical Imaging Systems of Chapel Hill, Inc., a New York
corporation, Medical Imaging Systems of New Port Richey, Inc., a New York
corporation, Tri-Imaging, Inc., a Florida corporation, and certain individuals
who guaranteed monthly rental payments under the Equipment Leases.
Of the $6.3 million of Equipment Leases, $1.8 million are
owned by Prime and the remainder have been transferred and assigned by Prime to
special purpose corporations participating in certain equipment securitization
programs. The defaults and violations alleged in the suit may require Prime to
repurchase such assigned leases from these special purpose corporations.
The Company will be unable to ascertain whether it will
ultimately suffer any losses as a result of the defaults and violations alleged
in the suit until it can ascertain the magnitude of the defaults and violations
or the extent of recovery pursuant to this litigation. The Company's primary
lenders have been advised of the occurrence of such defaults and violations and
are continuing to provide financing to the Company.
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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 hereunto duly authorized.
PRIME CAPITAL CORPORATION
/s/ Robert C. Benson
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Robert C. Benson
Senior Vice President and
Chief Financial Officer
June 16, 1997
