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) JUNE 13, 1997
HOMEOWNERS GROUP, INC.
(Exact name as specified in charter)
DELAWARE 0-17338 65-0033743
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
400 SAWGRASS CORPORATE PARKWAY, SUNRISE, FLORIDA 33325
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (954) 845-9100
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ITEM 5. OTHER EVENTS
The Company has received Notices of Proposed Adjustments from the Internal
Revenue Services with respect to its federal income tax returns for the years
ended December 31, 1993, 1994 and 1995. These notices would disallow losses
totaling approximately $20.5 million, which would result in the Company being
liable for approximately $7 million of tax, plus interest and possible
penalties.
Based upon these notices, The Cross Country Group has informed the Company that
it will not proceed with the proposed Merger with the Company at this time. The
Company is engaged in discussions with Cross Country in an attempt to agree to
modifications to the Merger Agreement, which expires on July 1, 1997. As a
result, the Homeowners Group Meeting of Stockholders scheduled for June 19, 1997
has been postponed.
The Company intends to vigorously contest the IRS position.
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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.
HOMEOWNERS GROUP, INC.
JUNE 16, 1997 /S/ C. GREGORY MORRIS
(Date) -----------------------------------
C. Gregory Morris
Chief Financial Officer
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EXHIBITS
Exhibit 20.1 Notice of Company Material Adverse Effect from Cross Country
Attorneys
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LANE ALTMAN & OWENS LLP
COUNSELLORS AT LAW
June 13, 1997
VIA FACSIMILE
Paul Berkowitz, Esq.
Greenberg, Traurig
1221 Brickell Avenue
Miami, FL 33131
Dear Paul:
The Information Document Request dated June 9, 1997 and the accompanying
Notices of Proposed Adjustment giving notices of disallowance of losses of
Homeowners Group, Inc. totaling approximately $20.5 million constitute a Company
Material Adverse Effect under the Agreement and Plan of Merger dated May 14,
1996, as amended. As a result thereof, The Cross Country Group, Inc., on behalf
of itself and its affiliated entities that are signatories to the Agreement,
hereby give notice that it elects not to proceed with the proposed Merger at
this time.
We will plan on meeting with you and Gary Lipson on Monday June 16, 1997 to
explore possible actions.
Very truly yours,
/s/ ROBERT M. ROSEN
----------------------
Robert M. Rosen
cc: Howard Wolk
Sidney Wolk
Nathan T. Wolk, Esq.
