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): August 30, 2000
CROWN ENERGY CORPORATION
--------------------------------------------------------------------------------
Exact name of registrant as specified in its charter
Utah 0-19365 87-0368981
---- ------- ----------
State or other Commission File No. IRS
jurisdiction of incorporation Employer ID #
215 South State, Suite 650, Salt Lake City, Utah 84111
--------------------------------------------------------------------------------
Address and zip code of principal executive offices
801-537-5610
--------------------------------------------------------------------------------
Registrant's telephone number
<PAGE>
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
Not Applicable
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
On July 25, 2000, Crown Energy Corporation ("Crown Energy"), Crown
Asphalt Corporation ("CAC") and Crown Asphalt Products Company ("CAPCO"),
collectively the ("Company"), brought suit against MCN Energy Group, Inc.
("MCN"), MCNIC Pipeline & Processing Company ("MCNIC") and certain officers of
MCN and MCNIC. The suit was brought in the United States District Court for the
District of Utah, Central Division, and is styled Crown Energy Corporation,
Crown Asphalt Corporation, and Crown Asphalt Products Company v. MCN Energy
Group, Inc., MCNIC Pipeline & Processing Company, Howard L. ("Lee") Dow III, and
William E. Kraemer, Civil No. 2:00CV-05873ST (the "Crown Complaint"). The action
seeks damages of an amount exceeding $100 million for breach of fiduciary
duties, economic duress, and breach of implied covenants of good faith and fair
dealing.
The Company's complaint followed filing of an action by MCNIC in the
Third Judicial District Court, Salt Lake County, Utah, Civil No. 00090-4876 (the
"MCNIC Complaint") pursuant to which MCNIC attempts to foreclose MCNIC's alleged
mortgage and security interest in, and to, certain real and intangible personal
properties of Crown Asphalt Distribution, L.L.C. ("CAD"), a limited liability
company in which MCNIC and CAPCO are the sole members. The Company's complaint,
the MCNIC Complaint and the answer and counterclaims which were filed by CAD in
response to the MCNIC Complaint are discussed in detail in Crown Energy's
Reports on Form 8-K filed on June 28, 2000 and August 4, 2000.
On August 30, 2000, MCN, MCNIC and certain officers of those entities
filed a motion to stay proceedings in response to the Crown Complaint in which
they requested that the Court stay the proceeding and compel arbitration under
the provisions of CAD's Operating Agreement and Operating and Management
Agreement and under Crown Asphalt Ridge, L.L.C.'s Operating Agreement and
2
<PAGE>
Operating and Management Agreement. Additionally on August 30, MCNIC filed a
motion in response to CAD's counterclaims also requesting that the Court stay
proceedings and compel arbitration under CAD's Operating Agreement and the other
referenced agreements.
The Company and CAD believe that their claims and counterclaims present
issues which are not arbitrable and which are outside of the coverage of the CAD
Operating Agreement and the other referenced agreements and intend to vigorously
contest the assertion that arbitration is the appropriate avenue to pursue such
claims and counterclaims. In the alternative, if the matters are submitted to
arbitration, the Company and CAD believe that they possess a strong case on
their claims and counterclaims. However, because litigation and arbitration
proceedings are inherently uncertain, the Company and CAD cannot predict the
outcome of any litigation or arbitration proceedings. Interested persons should
note that in the event MCNIC prevails in its action against CAD, and depending
upon the extent and nature of any relief granted by a court or an arbitrator,
CAD may be severely and adversely impacted and may lose possession of some or
all of its primary assets and sources of revenues. Further, since CAD provides a
very significant portion of the Company's revenues from operations, the Company
is likely to be materially and adversely impacted by any adverse outcome in the
litigation or arbitration discussed herein.
Item 6. Resignation of Registrant's Directors
Not Applicable
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits
Not Applicable
Item 8. Changes in Fiscal Year
Not Applicable
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CROWN ENERGY CORPORATION
/s/ Alexander L. Searl
----------------------------
Alexander L. Searl
Chief Operating Officer and
Chief Financial Officer
DATED: September 19, 2000
4
