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: February 9, 1999
PENN OCTANE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-24394 52-1790357
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
900 Veterans Boulevard, Suite 240
Redwood City, California 94063
(Address of principal executive offices) (Zip Code)
(650) 368-1501
(Registrant's telephone number, including area code)
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Item 5. Other Events
On December 31, 1998, the Registrant received notification from the Texas Court
of Appeals that the request by IBC-Brownsville (IBC) for a rehearing of the
previous appellate decision upholding the judgment of The State District Court
(Judgment) against IBC-Brownsville in favor of the Registrant, was denied (see
attached Exhibit 1).
As a result of this latest decision, IBC has now exhausted all legal remedies
under the appeals process available to it. IBC still may petition the Texas
Supreme Court to hear its case but only on specific issues related to law.
Nonetheless, the decision to actually review the case is solely up to the Texas
Supreme Court. If the Texas Supreme Court should elect to review the case,
there is no certainty that the outcome of the Judgment will change.
As a result of the above, the Registrant will record the gain when it realizes
the proceeds associated with the Judgment. Due to the fact that the Judgment
included an offset related to a liability which the Registrant has recorded on
its balance sheet, the Registrant has realized a portion of the Judgment which
relates to that liability. When the cash portion of the Judgment is collected,
the Registrant will record the remaining amount of the Judgment.
In filing the quarterly statement for the three months ended January 31, 1999,
the Registrant will reflect a gain to the extent of the amount which was
recorded as a liability on the Registrant's balance sheet at December 31, 1998.
As of December 31, 1998, the amount of the gain realized by the Registrant is
approximately $986,000.
A copy of the official notice from the Court of Appeals, dated December 30,
1998, stating that the appellants motion for a rehearing was overruled, a copy
of which is attached as Exhibit 1 hereto, is incorporated herein by reference
and made a part hereof.
The Registrant's news release dated January 5, 1999, announcing the decision of
the Texas Court of Appeals to deny appellants motion for rehearing, a copy of
which is attached as Exhibit 2 hereto, is incorporated herein by reference and
made a part hereof.
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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 hereunto duly authorized.
PENN OCTANE CORPORATION
Date: February 9, 1999
By: /s/ Ian T. Bothwell
-----------------------------------------
Name: Ian T. Bothwell
Title: Vice President, Treasurer,
Assistant Secretary, Chief
Financial Officer and
Principal Accounting Officer
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EXHIBIT INDEX
Exhibit No. Description Page No.
- ------------ ---------------------------------------------- ---------
1. Notification from Court Of Appeals, dated
December 30, 1998 5
2. News Release dated January 5, 1999 6
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- --------------------------------------------------------------------------------
[Seal: THE STATE
OF TEXAS]
OFFICIAL NOTICE
COURT OF APPEALS
13TH JUDICIAL DISTRICT December 30, 1998
[U.S. POSTAGE
CORPUS CHRISTI
DEC 30, 98
0.20]
RE: Case No. 13-96-00298-CV
Style: International Bank of Commerce - Brownsville
v: International Energy Development Corporation
The appellant's motion for rehearing was over ruled by this Court on this day.
- --------------------------------------------------------------------------------
CATHY WILBORN, CLERK
13TH COURT OF APPEALS
10TH FLOOR
NUECES COUNTY COURTHOUSE
CORPUS CHRISTI, TEXAS 78401
MAIL TO: Penn Octane Corporation
900 Veterans Blvd, Suite 240
Redwood City, CA 94063
- --------------------------------------------------------------------------------
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PRESS RELEASE
FOR IMMEDIATE RELEASE
---------------------
PENN OCTANE CORPORATION'S JUDGMENT AWARD
UPHELD BY TEXAS COURT OF APPEALS
TEXAS COURT OF APPEALS DENIES MOTION FOR REHEARING AND
UPHOLDS ARBITRATION AWARD AGAINST INTERNATIONAL BANK OF COMMERCE
REDWOOD CITY, CA - JANUARY 05, 1999. J.B. Richter, President and CEO of Penn
Octane Corporation (Nasdaq/Amex SmallCap market: POCC) today announced that the
Appellant (International Bank of Commerce-Brownsville) motion for rehearing was
denied by the Texas Court of Appeals on December 30, 1998. The Texas Court of
Appeals handed down a decision to deny a motion to rehear the judgment award
which was previously upheld by the Texas Court of Appeals in June 1998 in favor
of Penn Octane Corporation in connection with Penn Octane Corporation's lawsuit
against the International Bank of Commerce-Brownsville. The amount of the
judgment award as of December 31, 1998 is approximately $3,808,049 and accrues
interest daily of approximately $940.35 until the judgement is actually paid to
the company.
As part of the judgement award, Penn Octane will also be entitled to offset
$672,552 and $274,709 of principal and interest obligations (amounts as of
December 31, 1998). The Company will be required to pay contingent legal and
other fees incurred in connection with the judgement award.
Penn Octane reported record volume of shipments of 10,704,303 gallons for
November 1998 and 11,097,263 gallons for December 1998, an increase of 47.8% and
20.5% over the same periods in 1997.
Penn Octane is a leading supplier of liquefied petroleum gas to Mexico, in
addition to operating a 132-mile, six-inch pipeline from an interconnecting
pipeline in Kleberg County, Texas to its terminal in Brownsville, Texas, which
acts as a trans-shipment point for delivery to Mexico
CERTAIN OF THE STATEMENTS IN THIS NEWS RELEASE ARE FORWARD-LOOKING
STATEMENTS. WHILE THESE STATEMENTS REFLECT THE COMPANY'S BELIEFS, THEY ARE
SUBJECT TO UNCERTAINTIES AND RISKS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY.
# # #
Contact for the Company:
Penn Octane Corporation
Jerry Richter, President & CEO
650/368-1501
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