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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) September 15, 2000
THE LOEWEN GROUP INC.
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(Exact Name of Registrant as Specified in Charter)
British Columbia, Canada 0-18429 98-0121376
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
4126 Norland Avenue, Burnaby, British Columbia V5G 3S8
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 604-299-9321
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
The Loewen Group Inc. today reports the results of its factual
investigation into the uncertainty relating to the secured status of its 7.75%
Series 3 Senior Notes, of which $125,000,000 in principal amount is outstanding,
8.25% Series 4 Senior Notes, of which $225,000,000 in principal amount is
outstanding, 7.20% Series 6 Senior Notes, of which $200,000,000 in principal
amount is outstanding, 7.60% Series 7 Senior Notes, of which $250,000,000 in
principal amount is outstanding, and its 6.70% Pass-Through Asset Trust
Certificates ("PATS"), of which $300,000,000 in principal amount is outstanding.
In 1996, The Loewen Group Inc. and Loewen Group International, Inc.
(collectively, "the Company") entered into a Collateral Trust Agreement (the
"CTA"), under which the Company granted security interests in certain assets
(the "Pledged Assets") to secure its existing indebtedness. The CTA also
permitted the securing of future indebtedness with the Pledged Assets. The CTA
contains provisions regarding the registration of future indebtedness in a
register maintained by the collateral trustee. Those provisions provide that
holders of future indebtedness or their representatives were to effect this
registration by delivering to the collateral trustee Additional Secured
Indebtedness Registration Statements in a form set forth in the CTA.
Subsequent to the execution of the CTA, among other financings, the
Company issued the Series 3, Series 4, Series 6 and Series 7 Senior Notes and
the PATS (collectively, the "Subject Debt"). Pursuant to the agreements with
lender representatives in connection with those financings, the Company has
treated the Subject Debt as secured under the CTA; however, in early 2000, the
Company was advised that the Additional Secured Indebtedness Registration
Statements for the Series 6 and Series 7 Senior Notes and the PATS were not
included in the collateral trustee's files, and the Additional Secured
Indebtedness Registration Statement for the Series 3 and Series 4 Senior Notes
included in the collateral trustee's files indicated the correct original
principal amount of the Series 3 and Series 4 Senior Notes, but stated that the
outstanding principal amount was $0. These circumstances gave rise to
uncertainty as to the status of these securities under the CTA.
The Company then caused to be commenced a factual investigation into
the circumstances underlying the absence from the collateral trustee's files of
any Additional Secured Indebtedness Registration Statement for the Series 6 and
Series 7 Senior Notes and the PATS and into the misstatement of the outstanding
principal amount on the Additional Secured Indebtedness Registration Statement
for the Series 3 and Series 4 Senior Notes. That investigation included informal
interviews with numerous parties involved in the drafting of the CTA and the
issuance of the Subject Debt; those interviewed included counsel for the Company
that participated in the drafting of the CTA, counsel for the Company that
participated in the issuance of the Subject Debt, a representative of the
indenture trustee for the Subject Debt, and counsel for the underwriters on the
Subject Debt. In addition, as part of the investigation, sworn testimony was
taken from three representatives of the collateral trustee in a Bankruptcy Rule
2004 examination. The investigation also included analysis of various documents
provided by or on behalf of involved parties.
The factual investigation caused by the Company has revealed that for
the Series 6 and Series 7 Senior Notes and for the PATS, no party recalls
actually having delivered (and no party
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claims to have delivered) the executed Additional Secured Indebtedness
Registration Statements or any drafts thereof to the collateral trustee or its
counsel. For the Series 3 and Series 4 Senior Notes, the factual investigation
has revealed that a draft of the Additional Secured Indebtedness Registration
Statement that correctly stated the original principal amount to be $350 million
but incorrectly listed an outstanding principal amount of $0 was provided to the
collateral trustee prior to the closing of that transaction. Revised drafts of
the Additional Secured Indebtedness Registration Statement reflecting the
correct outstanding principal balance were subsequently delivered to counsel for
the collateral trustee prior to the closing. Although an Additional Secured
Indebtedness Registration Statement reflecting the correct outstanding principal
balance is contained in the book of closing documents, it did not make its way
into the collateral trustee's retained files.
The factual investigation has further revealed that, although the CTA
requires the collateral trustee to enter the information from Additional Secured
Indebtedness Registration Statements into a Secured Indebtedness Register, the
collateral trustee instead kept copies of those Additional Secured Indebtedness
Registration Statements received by it and did not keep an independent
Additional Secured Indebtedness Register. In addition, while any representative
of a secured party had the right under the CTA to examine the Secured
Indebtedness Register, no party did so before June 1, 1999, the date the Company
and certain of its affiliates filed for bankruptcy protection.
As previously announced, the Company has confirmed that it satisfied
its obligations under the financing agreements to adopt appropriate corporate
resolutions and to deliver to lender representatives, at or about the time of
closing, Additional Secured Indebtedness Registration Statements relating to the
Series 3, Series 4, Series 6 and Series 7 Senior Notes and the PATS.
This report of the results of the Company's factual investigation does
not purport to provide an analysis of the status of the Subject Debt under the
CTA.
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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.
THE LOEWEN GROUP INC.
By: /s/ Bradley D. Stam
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Name: Bradley D. Stam
Title: Senior Vice President,
Legal & Asset Management
Date: September 15, 2000
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