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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 (Date of earliest event reported) October 20, 1999
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Crown Group, Inc.
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(Exact name of registrant as specified in its charter)
Texas 0-14939 63-0851141
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(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
4040 North MacArthur Boulevard, Suite 100, Irving, Texas 75038
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(Address of principal executive offices)
Registrant's telephone number, including area code (972) 717-3423
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(Former name or former address, if changed since last report)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On October 20, 1999, Crown Group, Inc.'s (the "Company") Audit Committee
unanimously approved the dismissal of PricewaterhouseCoopers LLP ("PwC") as the
Company's independent accountants, and engaged Grant Thornton LLP as the
Company's new independent accountants. The Company's Audit Committee cited
cost considerations as a principal reason for the change.
PwC's report on the financial statements of the Company for the past two
fiscal years did not contain an adverse opinion or a disclaimer of opinion, and
was not qualified or modified as to uncertainty, audit scope or accounting
principles.
During the two most recent fiscal years and the subsequent interim period
preceding the dismissal of PwC, there were no disagreements with PwC on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of PwC, would have caused it to make a reference to the subject
matter of the disagreements in connection with its report.
No event listed in Paragraphs (A) through (D) of Item 304 a(1)(v) of
Regulation S-K occurred within the Company's two most recent fiscal years and
the subsequent interim period preceding the dismissal of PwC except as follows:
During the course of its fiscal 1999 year end closing process, the Company
discovered certain accounting errors and irregularities at its Paaco
Automotive Group, Inc. and Premium Auto Acceptance Corporation subsidiaries
(collectively "Paaco"). As a result of such discovery PwC (i) expanded
their fiscal 1999 audit procedures at Paaco and (ii) advised the Company
that a material weakness existed in Paaco's financial reporting and
accounting processes. The Company has restructured Paaco's management
organization and has taken certain steps to ensure the integrity of Paaco's
accounting and reporting procedures. Daniel Chu, former President of Paaco,
resigned in July 1999.
The Audit Committee of the Board of Directors of the Company has met with
PwC and discussed the subject matter of the audit procedures and advice of
PwC with respect to Paaco, and the Company has authorized PwC to respond
fully to the inquiries of the Company's successor accountant concerning the
subject matter of PwC's audit procedures and advice regarding Paaco.
During the two most recent fiscal years and subsequent interim period
preceding the engagement of Grant Thornton LLP, the Company did not consult
with Grant Thornton LLP on (i) the application of accounting principles to a
specified transaction, (ii) the type of audit opinion that might be rendered on
the Company's financial statements, or (iii) any matter that was either the
subject of a disagreement or a reportable event.
A copy of a letter from PwC indicating its agreement with the statements
made by the Company in response to this Item 4 of Form 8-K is attached to this
report as an exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c). Exhibits.
The following exhibit is filed with this report:
Exhibit Number Description of Exhibit
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1 Letter from Independent Auditors
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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.
CROWN GROUP, INC.
By: /s/ Mark D. Slusser
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Mark D. Slusser
Chief Financial Officer
Dated: October 25, 1999
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT NO. DESCRIPTION
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1 Letter from Independent Auditors
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EXHIBIT 1
October 25, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We have read the statements made by Crown Group, Inc. (copy attached), which we
understand will be filed with the Commission, pursuant to Item 4 of Form 8-K,
as part of the Company's Form 8-K report dated October 25, 1999. We agree with
the statements concerning our Firm in such Form 8-K.
Very truly yours,
PricewaterhouseCoopers LLP
