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)
July 2, 1996
SECURITY INVESTMENTS GROUP, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-17527 21-0587407
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(State or other jurisdiction (SEC File No.) (IRS Employer
of incorporation) Identification
Number)
817 Landis Avenue, Vineland, New Jersey 08360
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 794-3586
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(Former name or former address, if changed since last Report)
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SECURITY INVESTMENTS GROUP, INC.
INFORMATION TO BE INCLUDED IN REPORT
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Item 5. Other Events.
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Goodwill Lawsuit. On July 2, 1996, the Registrant issued a Press Release
announcing the decision of the U.S. Supreme Court in the case styled U.S. v.
Winstar Group. In that decision, the U.S. Supreme Court affirmed a decision by
U.S. Court of Federal Claims that the federal government breached an express
contract with a savings association when it changed the accounting treatment
relating to goodwill in 1989. On August 8, 1995, the Registrant filed a lawsuit
in the United States Court of Federal Claims against the United States
Government to recover damages for breach of contract occasioned by the enactment
of this law. The Court held that the Government is liable for damages and
remanded the case to the Court of Federal Claims to determine the amount of such
damages. As of December 4, 1992, the date the Registrant's wholly-owned
subsidiary was seized by the Government, the Company had approximately $53
million of goodwill recorded on its books.
For further details, reference is made to the Press Release dated July 2,
1996, which is attached hereto as Exhibit 99 and incorporated herein in its
entirety by this reference.
Other Legal Proceedings. As previously reported, the Registrant received a
refund from the IRS in the amount of $678,184 in February, 1995. The Registrant
has placed the full amount of the tax refund in an interest bearing account in
the name of the Registrant. In December, 1995, the Registrant was sued in the
U.S. District Court for the District of New Jersey for return of the tax refund
by the Resolution Trust Corporation ("RTC") in its capacity as receiver for
Security Federal Savings and Loan Association claiming that the tax refund is an
asset of the receiver and, therefore, should be returned to the RTC. The
Registrant has filed an answer to the RTC complaint and discovery has begun. The
Registrant intends to vigorously defend against this lawsuit.
Annual Meeting of Stockholders. The Registrant intends to hold an annual
meeting of stockholders in September 1996, for the purpose of, among other
things, electing directors of the Corporation and the transaction of such other
business that may come before the meeting.
Stock Issuances. In June 1996, the Registrant issued 30,000 shares of its
Common Stock, par value $.10 per share ("Common Stock"), to each of its nine
Directors in lieu of cash compensation for services rendered without
compensation since December 1992. An additional 30,000 shares of Common Stock
were issued to one employee of the Registrant for services rendered in lieu of
cash compensation and 50,000 shares of Common Stock were issued to the
2
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Registrant's New Jersey counsel, with which Director Milstead is affiliated, for
legal services rendered in lieu of cash compensation. As of July 31, 1996, the
Registrant had 5,035,900 shares of Common Stock issued and outstanding.
Line of Credit. In July 1996, the Registrant applied for a $50,000 line of
credit from a local financial institution to be used to pay expenses of the
Registrant for, among other things, the pursuit of litigation with and against
the U.S. Government and for working capital. The terms of the line of credit had
not been determined as of the date of this Report. The line of credit is
expected to have a variable rate of interest at a premium over the prime rate
and have a revolving maturity date. Each Director of the Registrant personally
guaranteed repayment of the line of credit.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
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(c) Exhibits:
99 Press Release dated July 2, 1996
3
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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, thereunto duly authorized.
SECURITY INVESTMENTS GROUP, INC.
Date:July 30, 1996 By: /s/P. Paul Ricci
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P. Paul Ricci
Chairman of the Board, President
and Chief Executive Officer
(Duly Authorized Representative)
EXHIBIT 99
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EXHIBIT 99
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[LOGO]
SECURITY INVESTMENTS GROUP, INC.
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
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July 2, 1996 P. Paul Ricci
President, Chief Executive
Officer and Chairman of the Board
(609) 794-3586
SECURITY INVESTMENTS ANNOUNCES SUPREME COURT DECISION ON GOODWILL
VINELAND, NEW JERSEY-- (July 2, 1996) Security Investments Group, Inc.
(the "Company"), previously the parent holding company of Security Savings Bank,
SLA, today announced that United States Supreme Court affirmed a decision by
U.S. Court of Federal Claims that the federal government breached an express
contract with a savings association when it changed the accounting treatment
relating to goodwill in 1989. The Court held that the federal government is
therefore liable for damages and remanded the case to the Court of Federal
Claims to determine the amount of such damages. The trial to determine damages
in the case is expected to begin within 120 days.
Prior to 1989, thrift institutions were permitted to count goodwill
created from the acquisition of troubled institutions as regulatory capital.
Prior to such time, the federal government encouraged thrift institutions to
acquire troubled institutions and to count the losses acquired as goodwill. When
the U.S. Congress passed legislation in 1989 reversing this treatment, many
institutions were subsequently seized by the federal government for failing to
meet their minimum capital requirements. Many of those institutions sued the
federal government for breach of contract. On August 8, 1995, the Company filed
a lawsuit in the United States Court of Federal Claims against the United States
Government to recover damages for breach of contract occasioned by the enactment
of this law. The case that was decided yesterday by the Supreme Court was U.S.
v. Winstar Group. While the Company was not part of yesterday's decision by the
Supreme Court, it has been advised by its counsel that the Company's case is
similar to the group of cases so decided.
When the federal government placed Security Savings Bank, SLA into
receivership in December 1992, the Company had approximately $53 million in
goodwill. The Company is unable to predict the amount of damages it may be
entitled to, if any, as a result of the Supreme Court decision announced
yesterday.
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The Company is an inactive Delaware business corporation that is traded in
the "pink sheets." Since December 1992, the Company ceased operations and has
engaged only in those activities necessary to keep its stockholder records
current and pursue its litigation against the federal government.
