<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 10)
ALLSTATE FINANCIAL CORPORATION
(Name of Issuer)
Common Stock, without par value
(Title of Class of Securities)
020011 10 2
(CUSIP Number)
Gerald F. Heupel, Jr., Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
(202)347-0300
(Name, Address, Telephone Number of Person Authorized to Receive
Notices and Communications)
March 4, 1998
(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 [ ].
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.
Page 1 of 13 Pages
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CUSIP No. 020011 10 2 13D Page 2 of 13 Pages
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Value Partners, Ltd. 75-2291866
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 661,835
8 SHARED VOTING POWER
N/A
9 SOLE DISPOSITIVE POWER
661,835
10 SHARED DISPOSITIVE POWER
N/A
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
661,835
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.6%
14 TYPE OF REPORTING PERSON*
PN
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CUSIP No. 020011 10 2 13D Page 3 of 13 Pages
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Ewing & Partners 75-2741747
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH N/A
8 SHARED VOTING POWER
661,835
9 SOLE DISPOSITIVE POWER
N/A
10 SHARED DISPOSITIVE POWER
661,835
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
661,835
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.6%
14 TYPE OF REPORTING PERSON*
PN
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CUSIP No. 020011 10 2 13D Page 4 of 13 Pages
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Timothy G. Ewing
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH N/A
8 SHARED VOTING POWER
661,835
9 SOLE DISPOSITIVE POWER
N/A
10 SHARED DISPOSITIVE POWER
661,835
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
661,835
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.6%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
CUSIP No. 020011 10 2 13D Page 5 of 13 Pages
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
David W. Campbell
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 11,000
8 SHARED VOTING POWER
2,500
9 SOLE DISPOSITIVE POWER
11,000
10 SHARED DISPOSITIVE POWER
2,500
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,500
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.6%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
CUSIP No. 020011 10 2 13D Page 6 of 13 Pages
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Edward A. McNally
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 13,000
8 SHARED VOTING POWER
N/A
9 SOLE DISPOSITIVE POWER
13,000
10 SHARED DISPOSITIVE POWER
N/A
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.6%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
CUSIP No. 020011 10 2 13D Page 7 of 13 Pages
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
William H. Savage
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 18,000
8 SHARED VOTING POWER
1,000
9 SOLE DISPOSITIVE POWER
18,000
10 SHARED DISPOSITIVE POWER
1,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.8%
14 TYPE OF REPORTING PERSON*
IN
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CUSIP No. 020011 10 2 Amendment No. 10 Page 8 of 13
Value Partners, Ltd. ("Value Partners") hereby amends its
Schedule 13D regarding the common stock, without par value (the
"Common Stock"), of Allstate Financial Corporation (the "Issuer"
or "Allstate") as set forth below. In addition, since Value
Partners filed a lawsuit against the Issuer on December 29, 1997
jointly with David W. Campbell, Edward A. McNally and William H.
Savage, who are three non-employee directors of the Issuer,
Messrs. Campbell, McNally and Savage are included as reporting
persons. Value Partners, Ltd., Ewing & Partners, Timothy G.
Ewing, David W. Campbell, Edward A. McNally and William H. Savage
are sometimes collectively referred to herein as the "Reporting
Persons."
The following items are supplemented as follows:
Item 4. Purpose of Transaction
As previously reported, on December 29, 1997, Value Partners
and Messrs. Campbell, McNally and Savage jointly filed in the
Circuit Court of Arlington County, Virginia a petition to set
aside the election of directors at Allstate's 1997 annual meeting
of stockholders held on November 18, 1997 (the "1997 Annual
Meeting") and to obtain an order that a new election be held. The
petition requested the Court, pursuant to Va. Code -Section-13.1-
681, to (i) proceed forthwith in a summary way to hear and decide
the issues presented; (ii) set aside the election of directors
held at the 1997 Annual Meeting; (iii) order that there be held
as soon as possible a new election of directors of Allstate; (iv)
enjoin and restrain respondents Craig Fishman, Leon Fishman,
Eugene Haskin, James Spector and Alan Freeman (the "Management
Directors") from exercising without court approval any powers as
directors pending a new election; and (v) grant such other relief
as the Court may deem just and equitable.
The lawsuit was filed as a result of the failure of the
Management Directors to honor the terms of the agreement
unanimously approved by the Board of Directors on September 24,
1997 pursuant to which (among other things): (1) Allstate's Board
was expanded to ten (as opposed to nine) directors; (2) Messrs.
Campbell, McNally and Savage consented to stand for re-election
at the 1997 Annual Meeting as part of a management-endorsed slate
with the Management Directors; (3) Craig Fishman's employment
contract was extended through July 1999; and (4) the newly
elected Board would immediately after the 1997 Annual Meeting:
(a) elect Mr. Campbell as Chairman of the Board; and (b) create
an Executive Committee that would consist of three of Allstate's
independent directors (Messrs. Campbell, McNally and Savage), and
Craig Fishman (the "Agreement"). Messrs. Campbell, McNally and
Savage believed that the provisions of the Agreement constituted
the minimum organizational reform necessary to address their
concerns regarding corporate management and the poor financial
performance of Allstate, and they supported the Agreement in
order to minimize the potential for a costly and disruptive proxy
contest at the 1997 Annual Meeting.
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CUSIP No. 020011 10 2 Amendment No. 10 Page 9 of 13
Immediately after the 1997 Annual Meeting, the newly-elected
Board convened to transact business, including the implementation
of the balance of the Agreement that the newly-elected Board
members had agreed to and which Allstate's Proxy Statement dated
October 17, 1997 represented would be carried out by the new
Board during that initial meeting. However, having by then
obtained their benefits under the Agreement, the Management
Directors immediately and for the first time disavowed the
balance of the Agreement. Upon motion of Mr. Savage, seconded by
Mr. Campbell, to implement the balance of the Agreement, the five
Management Directors all formally voted against carrying out the
plan of reorganization. The Management Directors' vote against
carrying out the plan of reorganization was contrary to the Proxy
Statement's representations to shareholders and in violation of
the Agreement that had secured their re-election without a
contest. As a result, the Board failed to implement the balance
of the Agreement by a vote of five to four.
A hearing was held in the Circuit Court of Arlington County
on February 2, 1998, and closing arguments were presented on
February 18, 1998. Since all of Allstate's directors are elected
at each annual meeting, litigation counsel for the Reporting
Persons proposed that the 1998 election of directors take place
in May 1998 in accordance with Allstate's By-Laws, as the effect
would be the same as setting aside the 1997 election in terms of
providing the stockholders with a fair opportunity to elect
directors. This proposal by the Reporting Persons also had the
benefit of avoiding the cost and expense of re-doing the 1997
election.
On February 18, 1998, in commenting on the 1997 election,
the Circuit Court judge stated that the vote was not fair and
that "the best thing to do would be to have another election. I
don't think this was fair and I think the only way on balance to
correct it is to have another election." On March 4, 1998, the
Circuit Court judge entered a decree indicating that it had
granted the Reporting Persons' motion for Summary Relief and then
ordered that an election of directors of Allstate be held on
Tuesday, May 12, 1998. This was the date that had been suggested
by counsel for the Reporting Persons.
In order to avoid the costs and disruption of a proxy
contest, the Reporting Persons attempted to negotiate in good
faith a single slate of directors for the May 12, 1998 election.
However, in response to these overtures, Allstate's management
(i) stated that they believed they had won the lawsuit (despite
the judge's statements that the 1997 election was not fair and
the order that another election be promptly held),
(ii) threatened to hire an expensive New York law firm, and
(iii) indicated that they would win the election on May 12, 1998
(even though stockholders had not yet been given the opportunity
to vote).
The Reporting Persons believe that Allstate's management is
prepared to waste corporate assets and engage in a lengthy and
expensive battle to retain its control over the company. The
Reporting Persons urge the Management Directors to act in the
best interests of all stockholders and to recognize their
fiduciary duties to stockholders.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 10 Page 10 of 13
The Circuit Court judge, after hearing testimony regarding
the poor financial performance of Allstate, stated that "it's
really extraordinary to see what this company is worth in light
of the market that's doubled in the last few years." The
Reporting Persons agree with the court and believe that it is
time for a change in the way the Management Directors have run
the company.
The Board of Directors of Allstate voted on March 12, 1998
to set the number of directors at five and to set April 7, 1998
as the voting record date for the May 12, 1998 annual meeting,
with Messrs. Campbell, McNally and Savage voting in favor of such
resolution. The Reporting Persons presently expect to run a full
slate of directors, although no decision has been made yet as to
whom such directors (other than Messrs. Campbell, McNally and
Savage) will be.
Item 5. Interest in Securities of the Issuer
(a) According to the Issuer's Report on Form 10-QSB for the
quarter ended September 30, 1997, a total of 2,318,185 shares of
Common Stock were issued and outstanding as of November 12, 1997.
As of December 29, 1997, Value Partners beneficially owned
488,368 shares of Common Stock, representing approximately 21.1%
of the Common Stock issued and outstanding. In addition, Value
Partners owns $1,301,000 of Notes, which are convertible into
173,467 shares of Common Stock. Because the Notes are currently
convertible into Common Stock, Value Partners is deemed to
beneficially own for purposes of Rule 13d-3 of the Securities
Exchange Act of 1934 an aggregate of 661,835 shares of Common
Stock, or 26.6% of the 2,491,652 shares of Common Stock that
would be issued and outstanding if Value Partners fully converted
its Notes into Common Stock.
Under Article 14 of the Virginia Stock Corporation Act (the
"Act"), Sections 13.1-728.1 through 13.1-728.9, persons who have
acquired beneficial ownership of 20% or more of the outstanding
voting shares of a Virginia corporation are deemed to have made a
"control share acquisition." In the event Allstate has 300 or
more stockholders for purposes of the Act, then the shares
beneficially owned by Value Partners in excess of such threshold
cannot be voted until such time, if any, that the other
shareholders of the Issuer pass a resolution restoring such
voting rights. As a result, the maximum number of shares that
Value Partners both beneficially owns and is entitled to vote is
currently limited to 463,636 shares (based on 2,318,185 issued
and outstanding shares).
Mr. Campbell beneficially owns 2,500 shares of Common Stock
jointly with his spouse, representing approximately .1% of the
Common Stock issued and outstanding. In addition, Mr. Campbell
holds options to purchase 11,000 shares of Common Stock.
Because the options are exercisable within 60 days of March 4,
1998, Mr. Campbell is deemed to beneficially own for purposes
of Rule 13d-3 an aggregate of 13,500 shares of Common Stock,
or .6% of the 2,329,185 shares of Common Stock that would
be issued and outstanding if Mr. Campbell fully exercised his
options.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 10 Page 11 of 13
Mr. McNally beneficially owns 1,000 shares of Common Stock
through an individual retirement account, or less than .1% of the
Common Stock issued and outstanding. In addition, Mr. McNally
holds options to purchase 12,000 shares of Common Stock.
Because the options are exercisable within 60 days of March 4,
1998, Mr. McNally is deemed to beneficially own for purposes
of Rule 13d-3 an aggregate of 13,000 shares of Common Stock,
or .6% of the 2,330,185 shares of Common Stock that would
be issued and outstanding if Mr. McNally fully exercised his
options.
Mr. Savage beneficially owns 6,000 shares of Common Stock,
or approximately .3% of the Common Stock issued and outstanding,
and his spouse owns 1,000 shares of Common Stock or less than .1%
of the Common Stock issued and outstanding. In addition, Mr.
Savage holds options to purchase 12,000 shares of Common Stock.
Because the options are exercisable within 60 days of March 4,
1998, Mr. Savage is deemed to beneficially own for purposes
of Rule 13d-3 an aggregate of 19,000 shares of Common Stock,
or .8% of the 2,330,185 shares of Common Stock that would be
issued and outstanding if Mr. Savage fully exercised his options.
In the aggregate, the Reporting Persons beneficially own
498,868 shares of Common Stock, representing 21.5% of the issued
and outstanding Common Stock, excluding shares which the
Reporting Persons have a right to acquire. If the Notes held by
Value Partners were fully converted and if the options held by
Messrs. Campbell, McNally and Savage were fully exercised, the
Reporting Persons would hold 707,335 shares, or 28.0% of the
2,526,652 shares of Common Stock that would then be issued and
outstanding.
(b) Value Partners has the sole power to vote and dispose
of the Common Stock and the Notes beneficially owned by it.
Value Partners does not share the power to vote or to direct the
vote of, or the power to dispose or to direct the disposition of,
the Common Stock or the Notes owned by it. Ewing & Partners, EAM
and Mr. Ewing do not directly own any shares of Common Stock of
the Issuer. However, Ewing & Partners, as a general partner of
Value Partners, may be deemed, for purposes of determining
beneficial ownership pursuant to Rule 13d-3, to have the shared
power with Value Partners to vote or direct the vote of, and the
shared power with Value Partners to dispose of or to direct the
disposition of, the Common Stock and the Notes owned by Value
Partners. Mr. Ewing, as a general partner and the Managing
Partner of Ewing & Partners, may be deemed, for purposes of
determining beneficial ownership pursuant to Rule 13d-3, to have
shared power with Value Partners to vote or to direct the vote
of, and the shared power to dispose or to direct the disposition
of, the Common Stock and the Notes owned by Value Partners.
Although EAM holds a 1% general partner interest in Ewing &
Partners, EAM does not
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 10 Page 12 of 13
have any shared voting or dispositive power over the Common Stock
and the Notes owned by Value Partners, as Section 8 of the
general partnership agreement for Ewing & Partners gives such
power solely to Mr. Ewing as the Managing Partner of Ewing &
Partners. Value Partners, Ewing & Partners, EAM and Mr. Ewing
each disclaim any beneficial ownership in the shares of Common
Stock held by Messrs. Campbell, McNally and Savage, and further
disclaim the existence of any agreement, arrangement or
understanding with any of Messrs. Campbell, McNally and Savage
as to how they will exercise the beneficial ownership of their
shares of Common Stock.
Mr. Campbell shares the power to vote and to dispose of his
2,500 shares of Common Stock with his spouse, Mary W. Campbell.
Mr Campbell's options to purchase 11,000 shares of Common Stock
are held solely by Mr. Campbell. Mr Campbell disclaims any
beneficial ownership in the shares of Common Stock held by the
other Reporting Persons, and further disclaims the existence of
any agreement, arrangement or understanding with any of the other
Reporting Persons as to how they will exercise the beneficial
ownership of their shares of Common Stock.
Mr. McNally has the sole power to vote and to dispose of the
1,000 shares of Common Stock held by him, and his options to
purchase 12,000 shares of Common Stock are held solely by him.
Mr. McNally disclaims any beneficial ownership in the shares of
Common Stock held by the other Reporting Persons, and further
disclaims the existence of any agreement, arrangement or
understanding with any of the other Reporting Persons as to how
they will exercise the beneficial ownership of their shares of
Common Stock.
Mr. Savage has the sole power to vote and to dispose of the
6,000 shares of Common Stock held by him, and shared power to
vote and to dispose of the 1,000 shares of Common Stock held by
his spouse, Ilona S. Savage. Mr. Savage's options to purchase
12,000 shares of Common Stock are held solely by him. Mr. Savage
disclaims any beneficial ownership in the shares of Common Stock
held by the other Reporting Persons, and further disclaims the
existence of any agreement, arrangement or understanding with any
of the other Reporting Persons as to how they will exercise the
beneficial ownership of their shares of Common Stock.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 10 Page 13 of 13
SIGNATURE
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.
VALUE PARTNERS, LTD.
By: Ewing & Partners as General Partner
March 13, 1998 By:/s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
General Partner
EWING & PARTNERS
March 13, 1998 By:/s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
General Partner
March 13, 1998 /s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
March 12, 1998 /s/ David W. Campbell
--------------------
David W. Campbell
March 12, 1998 /s/ Edward A. McNally
--------------------
Edward A. McNally
March 16, 1998 /s/ William H. Savage
--------------------
William H. Savage
