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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
January 26, 1998
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Date of Report (Date of earliest event reported)
First Merchants Acceptance Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-24686 36-3759045
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
570 Lake Cook Road, Suite 126, Deerfield, Illinois 60015
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(Address of principal executive offices) (Zip Code)
(847) 948-9300
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(Registrant's telephone number)
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ITEM 5. OTHER EVENTS.
On January 26, 1998, First Merchants Acceptance Corporation (the
"Registrant") issued a press release, a copy of which is attached as Exhibit
99.1 to this Form 8-K and incorporated herein by reference.
ITEM 7. EXHIBITS.
Exhibit 99.1 Press release of the Registrant, dated January 26, 1998.
Exhibit 99.2 Debtors' Joint Disclosure Statement dated January 21, 1998
and exhibits thereto. (1)
Exhibit 99.3 Debtors' First Amended Joint Plan under Chapter 11 dated
January 21, 1998 and exhibits thereto.(2)
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(1) Incorporated by reference from Exhibit 99.1 to the Registrant's
Application for Qualification of Indenture under the Trust Indenture
Act of 1939 on Form T-3, filed with the Securities and Exchange
Commission on January 28, 1998.
(2) Incorporated by reference from Exhibit 99.2 to the Registrant's
Application for Qualification of Indenture under the Trust Indenture
Act of 1939 on Form T-3, filed with the Securities and Exchange
Commission on January 28, 1998.
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SIGNATURE
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.
FIRST MERCHANTS ACCEPTANCE CORPORATION
/s/ Richard P. Vogelman
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Richard P. Vogelman
Dated: January 28, 1998 Vice President, General Counsel and Secretary
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EXHIBIT INDEX
EXHIBIT
No. Description
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99.1 Press release of the Registrant, dated January 22, 1998
99.2 Debtors' Joint Disclosure Statement dated January 21,
1998 and exhibits thereto.(1)
99.3 Debtors' First Amended Joint Plan under Chapter 11
dated January 21, 1998 and exhibits thereto.(2)
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(1) Incorporated by reference from Exhibit 99.1 to the Registrant's
Application for Qualification of Indenture under the Trust Indenture
Act of 1939 on Form T-3, filed with the Securities and Exchange
Commission on January 28, 1998.
(2) Incorporated by reference from Exhibit 99.2 to the Registrant's
Application for Qualification of Indenture under the Trust Indenture
Act of 1939 on Form T-3, filed with the Securities and Exchange
Commission on January 28, 1998.
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EXHIBIT 99.1
For Immediate Release
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January 26, 1998
FIRST MERCHANTS OBTAINS APPROVAL OF ITS DISCLOSURE
STATEMENT AND NOTICE PROCEDURES FOR TRADING OF
CERTAIN CREDITOR CLAIMS AND COMMON STOCK SHARES
DEERFIELD, Ill./Jan. 26 - The Delaware Court where the Chapter 11 case of
First Merchants Acceptance Corporation ("FMAC") is pending approved the
adequacy of the information in FMAC's disclosure statement on January 21, 1998
and set a hearing on confirmation of the Chapter 11 plan described in that
disclosure statement for March 3, 1998, at 4:30 p.m. The Plan provides for
issuance of $44 million of new debt to the unsecured creditors as set forth in
the Plan. It also provides for 57% of the equity of the reorganized FMAC to be
distributed pro rata to holders of the 1995 Subordinated Reset Notes and
holders of trade and other general unsecured claims against FMAC and 43% of
such equity to be distributed pro rata to holders of the 1996 Subordinated
Reset Notes. The Plan further provides that the stock of existing common
shareholders in FMAC would be cancelled on the effective date of the Plan and
such shareholders would receive the benefit of 3 year warrants to purchase at
least 32,500 shares of common stock of Ugly Duckling Corporation ("UDC"), which
warrants would have an exercise price of $20 per share and would be callable by
UDC if UDC's common stock trades at $28.50 per share for 10 consecutive trading
days. Parties should refer to FMAC's Chapter 11 plan and disclosure statement
and exhibits thereto for a full summary of all relevant terms and conditions. A
written prospectus with respect to the UDC Warrants will be distributed along
with the Plan and Disclosure Statement.
The Court also entered an interim order on January 21, 1998 establishing
procedures under which any party or group who proposes or intends to acquire or
accumulate or sell (i) more than 300,000 shares of existing FMAC stock or add
additional shares to or so as to create such a block, or (ii) any unsecured
claims against FMAC (other than claims relating to the 1996 Subordinated Reset
Notes issued by FMAC), must give a written notice to FMAC before such
transaction becomes effective. There is a 30 day waiting period and if FMAC
objects during such 30 day period, the transaction will not become effective
until it is approved by the Delaware Court.
FMAC believes that this relief is necessary to protect its net operating
loss carryforwards, which are believed to be approximately $70 million, and
that these carryforwards will be critical to its ability to confirm its plan
and maximize creditor recoveries thereunder.
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First Merchants is a national specialty finance company, which prior to
its Chapter 11 filing was primarily engaged in financing the purchase of used
automobiles by consumers who have limited access to traditional sources of
credit. It is no longer purchasing such paper and its current business is
concentrated on collecting the existing receivables in its portfolios.
