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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Home State Holdings, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
437368 10 3
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(CUSIP Number)
Howard E. Steinberg
Senior Vice President and General Counsel
Reliance Financial Services Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 31, 1997
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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 Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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. 437368 10 3 13D PAGE 2 OF 8 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Reliance Financial Services Corporation
IRS Employer's Identification No: 51-0113548
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) |X|
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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 (e) |X|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7 SOLE VOTING POWER
NUMBER OF
620,251 shares of Common Stock
SHARES ------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 shares of Common Stock
EACH ------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 620,251 shares of Common Stock
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WITH
10 SHARED DISPOSITIVE POWER
0 shares of Common Stock
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
620,251 shares of Common Stock
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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)
9.9%**
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14 TYPE OF REPORTING PERSON*
HC
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Based on 5,660,000 shares of Common Stock outstanding as of
November 13, 1996.
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CUSIP NO. 437368 10 3 13D PAGE 3 OF 8 PAGES
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The statement on Schedule 13D (the "Schedule 13D") filed with the
Securities and Exchange Commission (the "Commission") on October 15, 1996 by
Reliance Financial Services Corporation (the "Company") is hereby amended by
this Amendment No. 1 to the Schedule 13D. Unless otherwise indicated, all
capitalized terms used herein have the meanings ascribed to them in the Schedule
13D.
Item 4. Purpose of the Transaction
Item 4 is hereby amended and supplemented by the following information:
On March 31, 1997, the Company and Swiss Reinsurance America
Corporation ("Swiss Re") provided a written waiver (the "Waiver") to Home State
Holdings, Inc. ("Home State") relating to a default by Home State under the
Securities Purchase Agreement dated as of October 4, 1996 (the "Purchase
Agreement"; filed as Exhibit 1 to the Schedule 13D). The aforementioned default
resulted from Home State's failure to maintain a ratio of "net written premiums"
for the fiscal year ended December 31, 1996 to "statutory surplus" as of such
fiscal year-end of less than 2.5:1.0 for Home State and its subsidiaries as
required by Section 8.13 of the Purchase Agreement.
Pursuant to the Waiver, the Company and Swiss Re have agreed to waive
the aforementioned default under the Purchase Agreement. Such waiver becomes
effective upon the following occurring on or before April 4, 1997: (a) the
appointment of an additional director (the "Additional Director") to the Board
of Directors of Home State, which director shall be mutually acceptable to each
of the Company and Swiss Re and (b) the appointment by the Board of Directors of
Home State of a committee (the "Committee") of five directors consisting of
Robert Baylis, Henry Sopher, the Additional Director and two of the following
selected by Home State: Perez Ehric, Edward D. Herrick, Michael Monier or Harold
Stowe. The Committee shall be chaired by the Additional Director and it shall
have, among other things, the full power and authority to pursue all strategic
alternatives for Home State to improve its financial condition and to report to
the Board of Home State.
Item 7. Material to be Filed as Exhibits
Exhibit 6 -- Waiver, dated March 31, 1997, among the Company, Swiss Re and Home
State.
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CUSIP NO. 437368 10 3 13D PAGE 4 OF 8 PAGES
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SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned, by its duly authorized officer, certifies that the
information set forth in this statement is true, complete and correct.
RELIANCE FINANCIAL SERVICES CORPORATION
Date: April 4, 1997 By: /s/ James E. Yacobucci
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Name: James E. Yacobucci
Title: Senior Vice President - Investments
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CUSIP NO. 437368 10 3 13D PAGE 5 OF 8 PAGES
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION SEQUENTIALLY NUMBERED PAGE
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<S> <C> <C>
Exhibit 6 Waiver, dated March 31, 1997, among the Company, 6
Swiss Re and Home State
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CUSIP NO. 437368 10 3 13D PAGE 6 OF 8 PAGES
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EXHIBIT 6
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3 South Revmont Drive
Shrewsbury, New Jersey 07702
CONFIDENTIAL
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March 31, 1997
Mr. George Roberts
Reliance Insurance Company
4 Penn Center Plaza
Philadelphia, PA 19108
Mr. James Slattery
Swiss Reinsurance America Corporation
287 Park Avenue
New York, NY 10017
Gentlemen:
Reference is made to the Securities Purchase Agreement dated as of
October 4, 1996 (as amended, the "Purchase Agreement") by and among Home State
Holdings, Inc. (the "Company") and Swiss Re and Reliance (the "Purchasers"), as
purchasers of the Company's Series A Cumulative Voting Preferred Stock (the
"Preferred Stock") and Class A Warrants. Capitalized terms used herein which are
defined in the Purchase Agreement shall have the same meanings herein as
therein.
The Purchasers hereby waive the default existing under Section 8.13 of
the Purchase Agreement arising from the failure of the Company to maintain a
ratio of "net written premiums" for the fiscal year ended December 31, 1996 to
"statutory surplus" as of such fiscal year-end, for the Company and its
Subsidiaries on a consolidated basis in accordance with SAP, of less than
2.5:1.0 (the "1996 Premium to Surplus Ratio Default"). The Purchasers
acknowledge that the occurrence of the 1996 Premium to Surplus Ratio Default
shall not be deemed a failure by the
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CUSIP NO. 437368 10 3 13D PAGE 7 OF 8 PAGES
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Company to perform its covenant and agreement set forth in Section 8.13 of the
Purchase Agreement for the fiscal year ended December 31, 1996.
The waiver granted hereunder shall be limited specifically to the
matters set forth above and does not constitute directly or by implication an
amendment or waiver of any other provisions of the Purchase Agreement or any
other default which may occur or may have occurred under the Purchase Agreement.
The foregoing waiver will only become effective upon the following
occurring on or before April 4, 1997; (a) the due appointment to the Board of
Directors of the Company of an additional preferred director mutually acceptable
to each of Swiss Re and Reliance and (b) the appointment by the Board of
Directors of the Company of a committee of five directors consisting or Robert
Baylis, Henry Sopher, the additional preferred director and two of the following
selected by the Company: Perez Ehrich, Edward D. Herrick, Michael Monier or
Harold Stowe, chaired by such additional preferred director, with full power and
authority vested in such committee to pursue all strategic alternatives for the
Company to improve its financial condition and to report to the Company's Board
of Directors. In addition, such committee shall work with insurance regulatory
authorities and rating agencies to maintain and improve the Company's good
standing with regulatory authorities and ratings with rating agencies. In
connection with all of the foregoing, such committee shall have the authority to
hire investment bankers and other advisers to work with such committee.
This letter may be executed in one or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one instrument. This letter shall be effective (subject to the
preceding paragraph) when signed by the Purchasers and a copy thereof is
delivered to each of the Purchasers. Each of the Purchasers hereby represents to
the other that it has not received any remuneration or consideration not
specified in this letter for the waiver granted hereunder.
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CUSIP NO. 437368 10 3 13D PAGE 8 OF 8 PAGES
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Please indicate your acknowledgment of the foregoing in the space
provided below.
RELIANCE INSURANCE COMPANY
By: /s/ Lowell C. Freiberg
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Lowell C. Freiberg
Senior Vice President
SWISS REINSURANCE AMERICA
CORPORATION
By: /s/ James P. Slattery
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Name: James P. Slattery
Title: Senior Vice President
Acknowledged as of the
date first above written
HOME STATE HOLDINGS, INC.
By: /s/ Eric A. Reehl
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Name: Eric A. Reehl
Title: Executive Vice President
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