UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
MFN Financial Corporation
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
552-72N-104
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(CUSIP Number)
Glenn J. Cocchiola, Esq.
Cocchiola & Garelick, P.C.
1128 Route 31 North
Echo Hill Plaza
Lebanon, NJ 08833
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 22, 1999
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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 that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box [_].
* 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 in 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).
<PAGE>
CUSIP No. 552-72N-104
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above person (entities only)
Intermarket Corp.
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) [_]
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3 SEC Use Only
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4 Citizenship or Place of Organization
NY
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5 Sole Voting Power
Number of
Shares
6 Shared Voting Power
Beneficially -----------------------------------------------------------------
Owned by 934,372
-----------------------------------------------------------------
Each 7 Sole Dispositive Power
Reporting
Person -----------------------------------------------------------------
8 Shared Dispositive Power
With
934,372
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9 Aggregate Amount Beneficially Owned by Each Reporting Person
934,372
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10 Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions) []
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11 Percent of Class Represented by Amount in Row (9)
9.3%
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12 Type of Reporting Person (See Instructions)
CO
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<PAGE>
CUSIP No. 522-72N-104
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above person (entities only)
Fernwood Associates, L.P.
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) [_]
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3 SEC Use Only
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4 Citizenship or Place of Organization
DE
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5 Sole Voting Power
Number of
Shares -----------------------------------------------------------------
6 Shared Voting Power
Beneficially
Owned by 358,914
-----------------------------------------------------------------
Each 7 Sole Dispositive Power
Reporting
Person -----------------------------------------------------------------
8 Shared Dispositive Power
With
358,914
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9 Aggregate Amount Beneficially Owned by Each Reporting Person
358,914
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10 Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions) []
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11 Percent of Class Represented by Amount in Row (9)
3.6%
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12 Type of Reporting Person (See Instructions)
PN
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<PAGE>
CUSIP No. 522-72N-104
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above person (entities only)
Fernwood Restructurings, Limited
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) [_]
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3 SEC Use Only
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4 Citizenship or Place of Organization
British Virgin Islands
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5 Sole Voting Power
Number of
Shares -----------------------------------------------------------------
6 Shared Voting Power
Beneficially
Owned by 556,440
-----------------------------------------------------------------
Each 7 Sole Dispositive Power
Reporting
Person -----------------------------------------------------------------
8 Shared Dispositive Power
With
556,440
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9 Aggregate Amount Beneficially Owned by Each Reporting Person
556,440
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10 Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions) []
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11 Percent of Class Represented by Amount in Row (9)
5.6%
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12 Type of Reporting Person (See Instructions)
CO
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<PAGE>
CUSIP No. 522-72N-104
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1 Name of Reporting Persons
I.R.S. Identification Nos. of above person (entities only)
Fernwood Foundation Fund, L.P.
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) [_]
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3 SEC Use Only
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4 Citizenship or Place of Organization
DE
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5 Sole Voting Power
Number of
Shares -----------------------------------------------------------------
6 Shared Voting Power
Beneficially
Owned by 19,018
-----------------------------------------------------------------
Each 7 Sole Dispositive Power
Reporting
Person -----------------------------------------------------------------
8 Shared Dispositive Power
With
19,018
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9 Aggregate Amount Beneficially Owned by Each Reporting Person
19,018
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10 Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See
Instructions) []
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11 Percent of Class Represented by Amount in Row (9)
.19%
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12 Type of Reporting Person (See Instructions)
PN
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<PAGE>
Item 1. Security and Issuer.
This Statement on Schedule 13D relates to the Common Stock, par value
$.01 per share (the "Common Stock"), of MFN Financial Corporation (the
"Issuer"). The principal executive offices of the Issuer are located
at 100 Field Drive, Suite 340, Lake Forest, Illinois 60045.
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Item 2. Identity and Background.
This Schedule 13D is filed on behalf of Intermarket Corp.
("Intermarket"), Fernwood Associates, L.P. ("Associates"), Fernwood
Restructurings, Limited ("Restructurings"), and Fernwood Foundation
Fund (the "Fund"). Intermarket, Associates, Restructurings and the
Fund are collectively referred to herein as the "Reporting Persons".
Intermarket is a New York corporation having its principal place of
business at 667 Madison Avenue, New York, New York 10021.
Intermarket's principal business is providing investment management
services to corporations and acting as a general partner of investment
partnerships. Set forth on Attachment A attached hereto is a listing
of the directors and executive officers of Intermarket, their address,
present position with Intermarket (which is the principal occupation
or employment of each of them) and citizenship. The executive officers
of Intermarket constitute all of its shareholders and no shareholder
has absolute control. No other person directly or indirectly controls
Intermarket.
Associates is a Delaware limited partnership having its principal
place of business at 667 Madison Avenue, New York, New York 10021. Its
principal business is investment management. Set forth on Attachment A
attached hereto is a listing of the general partners of Associates,
their address, principal occupation or employment and the name,
principal business and address of any corporation or other
organization in which such employment is conducted, and citizenship.
No person other than those listed on Attachment A directly or
indirectly controls Associates.
Restructurings is an open-ended British Virgin Islands Company having
its principal place of business at Palm Chambers, P.O. Box 119, Road
Town, Tortola, British Virgin Islands. Its principal business is
investment management. Set forth on Attachment A attached hereto is a
listing of the directors of Restructurings, their address, principal
occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment is
conducted, and citizenship. No person other than those listed on
Attachment A directly or indirectly controls Restructurings.
The Fund is a Delaware limited partnership having its principal place
of business at 667 Madison Avenue, New York, New York 10021. Its
principal business is investment management. Set forth on Attachment A
attached hereto is a listing of the general partners of the Fund,
their address, principal occupation or employment and the name,
principal business and address of any corporation or other
organization in which such employment is conducted, and citizenship.
No person other than those listed on Attachment A directly or
indirectly controls the Fund.
During the last five years, neither the Reporting Persons nor any
their partners, executive officers or control persons listed in
Attachment A hereof has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect
to such laws.
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Item 3. Source and Amount of Funds or Other Consideration.
The Common Stock was acquired by the Reporting Persons pursuant to an
order of the United States Bankruptcy Court for the Northern District
of Illinois Eastern Division, dated March 10, 1999, confirming the
Second Amended Plan of Reorganization of Mercury Finance Company
("Mercury") under Chapter 11 of the Bankruptcy Code (the "Plan").
Under the Plan, Mercury's senior lenders, including the Reporting
Persons, received new senior secured notes equal to 75% of the face
value of their then current outstanding balance after the receipt of
Excess Cash (as defined in the Plan) and their pro rata share of 9.5
million shares of the initial equity of the reorganized company, MFN
Financial Corporation (the "Issuer").
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Item 4. Purpose of Transaction.
All of the Shares have been acquired for investment pursuant to the
Plan (see Item 3 above). Although none of the Reporting Persons has
formulated any definitive plans, the Reporting Persons may from time
to time acquire, or dispose of, shares of Common Stock and/or other
securities of the Issuer if and when the Reporting Persons deem it
appropriate. Any decision of the Reporting Persons either to purchase
additional shares of Common Stock or to dispose of any shares of
Common Stock may take into account various factors, including general
economic conditions, stock market conditions and developments
concerning the Issuer. The Reporting Persons may also formulate other
purposes, plans or proposals relating to the securities of the Issuer
to the extent deemed advisable in light of market conditions and other
factors deemed relevant.
Except as indicated above or elsewhere herein, none of the Reporting
Person has any present plans or proposals (although it reserves the
right to develop such plans or proposals in the future) which relate
to or would result in:
(a) The acquisition by any person of additional securities of
the Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any
of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) Any change in the present board of directors or management
of the Issuer, including any plans or proposals to change
the number or term of directors or to fill any existing
vacancies on the board;
(e) Any material change in the present capitalization or
dividend policy of the Issuer;
(f) Any other material change in the Issuer's business or
corporate structure;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system
of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Act; or
(j) Any action similar to any of those enumerated above.
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Item 5. Interest in Securities of the Issuer.
(a) Intermarket, as a result of the investment management services
provided to Associates, Restructurings and the Fund, is the
beneficial owner of 934,364 shares of Common Stock, representing
approximately 9.3% of the outstanding shares of the Common Stock,
based on 10,000,000 shares of Common Stock outstanding as of the
date of the event which requires filing of this Schedule 13D.
Such amount includes 358,914 shares of Common Stock, representing
3.6% of the outstanding shares of the Common Stock, beneficially
owned by Associates; 556,440 shares of Common Stock, representing
5.6% of the outstanding shares of the Common Stock, beneficially
owned by Restructurings; and 19,018 shares of Common Stock,
representing .19% of the outstanding shares of the Common Stock,
beneficially owned by the Fund.
(b) The Reporting Persons have shared power to vote and direct the
vote of the shares set forth in paragraph (a) above. The
Reporting Persons have shared power to dispose and direct the
disposition of the shares set forth in paragraph (a) above.
(c) Except as described herein, no transactions in the Common Stock
were effected by any of the Reporting Persons in the sixty day
period preceding the date of this filing.
(d) The Reporting Persons have the sole right to receive and the sole
power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares set forth in paragraph (a) above.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
None.
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Item 7. Material to be Filed as Exhibits.
None.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
July 22, 1999
--------------------------------------
(Date)
INTERMARKET CORP.
By: /s/ Ian R. MacKenzie
-----------------------------------
(Signature)
Ian R. MacKenzie, Vice President
--------------------------------------
(Name/Title)
FERNWOOD ASSOCIATES, L.P.
By: /s/ Ian R. MacKenzie
----------------------------------
(Signature)
Ian R. MacKenzie, General Partner
--------------------------------------
(Name/Title)
FERNWOOD RESTRUCTURINGS, LIMITED
By: /s/ Ian R. MacKenzie
-----------------------------------
(Signature)
Ian R. MacKenzie, Director
--------------------------------------
(Name/Title)
FERNWOOD FOUNDATION FUND, L.P.
By: /s/ Ian R. MacKenzie
-----------------------------------
(Signature)
Ian R. MacKenzie, General Partne
--------------------------------------
(Name/Title)
Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
Attachment A
Intermarket Corporation
- - -----------------------
Lionel Goldfrank III (1) President
Ian R. MacKenzie (1) Vice President
Thomas P. Borger (1) Vice President
David B. Forer (1) Vice President
Fernwood Associates, L.P.
Fernwood Foundation Fund, L.P.
- - ------------------------------
Lionel Goldfrank III (1)(2)
Ian R. MacKenzie (1)(2)
Thomas P. Borger (1)(2)
David B. Forer (1)(2)
Fernwood Restructurings, Ltd.
- - -----------------------------
Ian R. MacKenzie (1)(2)
David B. Forer (1)(2)
Lionel Goldfrank III (1)(2)
Ian D. Fair (Bahamian Citizen)
Chairman of MeesPierson (Bahamas) Limited
(Administrator of Fernwood Restructurings)
404 E. Bay St.
Windermere House, P.O. Box SS 5539
Nassau, Bahamas
Jacques Bouteiller (French Citizen)
Retired
1 rue de L'Aigle
Compienge, France
Steven Carey (Bahamian Citizen)
Deputy General Manager of Mees Pierson (Bahamas) Limited and Manager of Trust
404 E. Bay St.
Windermere House, P.O. Box SS 5539
Nassau, Bahamas
Joan L. Thompson (Bahamian Citizen)
Manager Corporate Secretarial of Mees Pierson
404 E. Bay Street
Windermere House, P.O. Box SS 5539
Nassau, Bahamas
(1) Messrs. Goldfrank, MacKenzie, Borger and Forer each has as his business
address, the address of Intermarket Corporation. Each of them is a U.S.
citizen.
(2) Messrs. Goldfrank, MacKenzie, Borger and Forer each has as his
principal occupation or employment, the position with Intermarket
Corporation listed above.
