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) November 19, 1999
PACIFICAMERICA MONEY CENTER, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20897 95-4465729
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
Ventura Boulevard, Suite 102
Woodland Hills, California 91364
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (818) 992-8999
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Item 5. Other Events
On November 19, 1999, the California Department of Financial Institutions
("DFI") issued a Notice of Taking Possession of Property and Business of Pacific
Thrift and Loan ("Pacific Thrift"). The Notice stated that the reason for the
action was Pacific Thrift's failure to cure its net worth deficiency by not
later than November 17, 1999, as directed in an earlier order issued on
September 15, 1999. The DFI took possession of Pacific Thrift on November 19,
1999, and immediately named the Federal Deposit Insurance Corporation ("FDIC")
as receiver for Pacific Thrift. The FDIC has announced its intention to
liquidate Pacific Thrift.
Also on November 19, 1999, PacificAmerica Money Center, Inc. (the
"Company") filed a petition for reorganization with the Bankruptcy Court for the
Central District of California, Woodland Hills Division. Management of the
Company believes that this action was required to preserve the maximum value of
the remaining assets of the Company for the benefit of all of the creditors of
the Company. To the extent that the Company is able to realize any additional
value from its assets after all creditors have been repaid, the Company seeks to
preserve this value for its shareholders. The closure of Pacific Thrift has
required the Company to discontinue all lending operations as of November 19,
1999.
The Company has sought for the past year to recover from the effects of a
sudden and severe drop in the market for subprime loans which occurred in the
fall of 1998. In September 1998, the Company lost the major purchaser for its
loans as a result of the adverse change in the market for subprime loans and the
loss of liquidity in the loan securitization markets. On October 12, 1998, due
to these adverse market conditions, Fremont General Corporation discontinued
merger negotiations with the Company. On October 28, 1998, the Company was
forced to close its wholesale loan division, which originated approximately 75%
of the Company's monthly loan production at the time of its closure. From
October 1998 to the present date, the Company has reported quarterly net losses
as a result of reduced loan production and lower loan sale premiums. Throughout
the past two years, the Company has sought to raise additional capital or to
find a purchaser for Pacific Thrift, but it has been unable to complete a
transaction. The Company was therefore unable to provide the necessary
additional capital to prevent the takeover of Pacific Thrift by the DFI.
Notwithstanding the closure of Pacific Thrift, the Company believes that
the future cash flow from the interest-only strips it holds may exceed the
Company's total obligations to its creditors. Nonetheless, the market for the
sale of these interests has been virtually nonexistent since the market events
of the fall of 1998. For this reason, the Company intends to use its best
efforts to preserve its interests in these assets, so that the maximum
realizable value from the assets may be realized by the Company for the benefit
of all of its creditors and its stockholders.
Except for historical information contained herein, statements in this
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report are forward-looking statements that involve certain risks and
uncertainties. Such risks include: the risk of loss of certain interest-only
strips as a result of a security interest held by Merrill Lynch Mortgage
Capital, Inc. in certain of these assets; the risk of loss of the assets as a
result of further regulatory action by the FDIC; the risk of loss of the assets
as a result of other actions by other creditors of the Company; and the inherent
risk of loss on the interest-only strips receivable as a result of higher than
anticipated prepayment rates, default rates and/or delinquency rates.
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.
Dated: November 23, 1999 PACIFICAMERICA MONEY CENTER, INC.
By: /s/ JOEL R. SCHULTZ
Joel R. Schultz
President and Chief Executive Officer
