<PAGE> 1
FORM 8-K
Securities and Exchange Commission
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 10, 1999
PRINCETON AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 0-5141 22-1848644
- --------------------------------------------------------------------------------
(State or other (Commission File (IRS Employer
Jurisdiction of Number) Identification
Incorporation Number)
2222 E. Camelback Road, Suite 105, Phoenix, Arizona 85016
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (602) 522-2444
<PAGE> 2
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Princeton American Corporation (the "Company") sets forth below the
following material developments in the United States Bankruptcy Court pursuant
to the implementation of and operation under its Joint Plan of Reorganization
(the "Plan") which became effective December 20, 1997:
Weiss Claim. On August 10, 1999, the Company filed a Notice of Appeal
to the United States Ninth Circuit Court of Appeals from the Decision on Appeal
signed by Federal District Judge H. Russell Holland on July 22, 1999, which
decision reversed the ruling of the Bankruptcy Court subordinating the claim of
Harry and Irene Weiss to that of an equity holder pursuant to 11 U.S.C. Section
510(b) of the Bankruptcy Code. In a prior ruling on June 23, 1999, the United
States Bankruptcy Court Judge James M. Marlar issued an order valuing the Weiss
claim (as an equity claim) in the amount of $619,602.73. The Company has also
appealed the order valuing the Weiss claim to the United States District Court
for the District of Arizona. The valuation order and Judge Holland's reversal of
the Bankruptcy Court order establishing the Weiss claim as an equity claim, if
allowed to stand as a cash claim of $619,602.73, will have a significant adverse
impact on the Company's net worth. The Company's ability to pay its creditors in
full, as set forth in the Plan, will require the Company to sell one of its
office buildings or significantly increase its borrowing capacity. The Company
cannot be certain that an increase in borrowing capacity will be available to
make these payments. Bankruptcy counsel for the Company has advised the Company
that pursuit of these appeals could extend the Company's operations under
bankruptcy court protection for up to an additional 18 to 24 months.
Hyman Center. Hyman Center, former president of the Company, filed a
claim for unpaid salary and cost reimbursements from May, 1991 through
September, 1995, in the total amount of $355,000. The Company has contested this
claim on the grounds that Mr. Center failed to perform any significant services
after May 31, 1991. The Company expects the Bankruptcy Court to set a trial date
for this claim in September or October of this year.
Onset Investment Limited. Onset Investment Limited has filed a claim
(the "Onset Claim") for damages in the amount of $200,713 pursuant to an alleged
breach of a stock purchase agreement by the Company. The Company is contesting
this claim. If the Onset Claim is allowed, the Company intends to seek a ruling
by the Bankruptcy Court to subordinate the Onset Claim to that of an equity
holder pursuant to 11 U.S.C. Section 510(b) of the Bankruptcy Code.
Disallowance of Claims. Pursuant to the Plan, the Company has completed
a thorough review of all filed proofs of interest and of all shareholders owning
more than 10,000 shares who failed to timely file a claim but may not have
received notice of their right to file a claim. The Company intends to file a
motion with the Bankruptcy Court to disallow approximately 19,000,000 shares
held by shareholders who: (i) own 10,000 or more shares and (ii) failed to file
a timely or properly documented claim. The Bankruptcy Court has not considered
this motion and the Company cannot predict at this time the total number of
shares which the Bankruptcy Court will ultimately disallow.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
AUGUST 25, 1999
Princeton American Corporation
By: /s/ William C. Taylor
---------------------------------------
William C. Taylor, Chief Executive Officer
3
