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) January 31, 1997
Mercury Finance Company
(Exact name of registrant as specified in charter)
Delaware 1-10176 36-3627010
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Field Drive, Lake Forest, Illinois 60045
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 295-8600
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On January 31, 1997, the registrant issued a press release, a copy of which
is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by
reference.
On February 3, 1997, the registrant issued two press releases, copies of
which are attached as Exhibits 99.2 and 99.3 to this Form 8-K and incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description of Document
99.1 Press release dated January 31, 1997 issued by the
registrant.
99.2 Press release dated February 3, 1997
issued by the registrant.
99.3 Press release dated February 3, 1997 issued by
the registrant.
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.
Mercury Finance Company
Date: February 3, 1997 By: /s/ Bradley Vallem
Its: AVP & Treasurer
Exhibit 99.1
TO BUSINESS EDITOR:
Mercury Finance Announces Actions Taken by Special Committee of Board
CHICAGO, Jan. 31 /PRNewswire/ -- Mercury Finance Company (NYSE: MFN)
announced today the Special Committee of the Board of Directors has taken
measures to further investigate the accounting irregularities that appeared to
be the result of unauthorized entries being made in the accounting records of
the Company by the Principal Accounting Officer which caused an overstatement of
the Company's earnings and required the Company to issue a news release on Jan.
29 restating the earnings.
The Company is continuing discussions with lenders to satisfy the
Company's working capital needs. However, due to the reduction in the Company's
credit rating by Moody's, Standard & Poor's and Duff and Phelps, the Company
will not be able to issue new commercial paper to repay maturing commercial
paper. As a result of the downgrade in ratings, Mercury Finance cannot pay the
$19 million in commercial paper due today. Furthermore, the Company cannot
predict the outcome of discussions with its lenders. The Company has retained
the services of Salomon Brothers Inc. to advise on all matters related to
current and future capital needs, as well as all related issues.
Additionally, the Company has directed Kirkland and Ellis and Arthur
Andersen & Co., two firms it retained earlier, to expeditiously conduct and
complete a thorough investigation of the auditing, accounting practices and
procedures of the Company and report to the Board. The attorney of James A.
Doyle, Mercury's former senior vice president, controller, and secretary, said
in an interview with a report that his client was willing to cooperate to "get
to the bottom" of the investigation. The Special Committee of the Board has
instructed Kirkland and Ellis to contact Doyle's attorney and to attempt to
reach Doyle and obtain his information on the investigation.
In other news, the Company announced that it received a notice from
Bank of Boston terminating the previously announced agreement.
Exhibit 99.2
FOR IMMEDIATE RELEASE
CONTACT: KATE CONNELLY
JOE KOPEC
The Dilenschneider Group
312-553-0700
MERCURY FINANCE COMPANY'S BOARD OF DIRECTORS
NAMES WILLIAM A. BRANDT, JR. PRESIDENT AND CEO
CHICAGO, IL. February 3, 1997 - William A. Brandt, Jr., president and chief
executive officer of Development Specialist, Inc. a firm specializing in the
provision of management, consulting and turnaround assistance to reorganizing
businesses today was named president and chief executive officer of Mercury
Finance Company (NYSE: MFN) by the board of directors.
Brandt has agreed to assume these responsibilities, effective immediately. He
will head a team of advisors to the Company who are scheduled to meet with
Mercury's lenders today in Chicago to discuss financing arrangements to meet the
company's ongoing liquidity needs.
John N. Brincat, Mercury Finance president and chief executive officer since
1989, has resigned from the positions of president and chief executive officer,
but will remain active as an employee and as a director, assisting Brandt with
business operations. Brincat said that under the circumstances, he believes the
Company is best served by a new, independent CEO who can take a look at the
situation from a fresh perspective.
Brandt, who has been involved in a number of major turnarounds said, "I
appreciate the confidence expressed by the board. My experience with
turnarounds is that the first stage is critical and requires enormous focus,
coordination and immediate information gathering to identify the most effective
way to return a company like Mercury Finance to financial stability. A team of
experts has been fielded to deal with the issues and over the next several days
and weeks we will be working to stabilize the immediate situation and chart a
course of action. It is my intention to regularly inform our shareholders and
the public of our progress as we put the building blocks in place for the new
Mercury Finance.
Other than the developments reported above, there have been no material changes
in the status of Mercury Finance since last Friday.
Exhibit 99.3
FOR IMMEDIATE RELEASE
CONTACT: KATE CONNELLY
The Dilenschneider Group
312.553.0700
MERCURY FINANCE TO COOPERATE FULLY WITH
INVESTIGATORS
CHICAGO, IL. FEBRUARY 3, 1997 -- Mercury Finance announced that federal
investigators executed a search warrant today at the company's home office in
Lake Forest, Il. The Company is cooperating fully with the Federal
investigation efforts including the production of relevant materials pursuant to
the warrant.
Additionally, the Special Committee of the Board of Directors through Kirkland &
Ellis and Arthur Andersen already are fully and aggressively pursuing an
internal investigation. The Company will continue to cooperate with all
investigative efforts.
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