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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 9, 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 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
By letter dated January 8, 1998, which was sent by certified mail on
January 9, 1998, First Merchants Acceptance Corporation (the "Registrant")
dismissed Deloitte & Touche, LLP ("D&T"), which has served as the Registrant's
independent auditors since its inception. The dismissal was effected pursuant
to a resolution adopted by the Board of Directors of the Registrant.
The previously issued auditors' reports of D&T on the Registrant's
financial statements for the years ended December 31, 1995 and 1996 did not
contain any adverse opinion or disclaimer of opinion, nor were the reports
qualified or modified as to uncertainty, audit scope or accounting principles.
There have been no disagreements with D&T in the years ended December 31, 1995
or 1996 or to the date of their dismissal. The Registrant's financial
statements for the year ended December 31, 1997 have not yet been audited.
By letter dated February 4, 1997, D&T informed the Registrant of certain
matters involving the Registrant's internal control structure and operations
that D&T considered to be reportable conditions under standards established by
the American Institute of Certified Public Accountants. D&T indicated that,
among other matters, certain control procedures, such as bank reconciliations
and regular tests of compliance with securitization and debt indentures, were
not completed on a timely basis and recommended that the Registrant add
supervisory and staff personnel to the financial area so that the necessary
controls could be instituted. D&T also noted other issues to be addressed,
including documentation of procedures, timely preparation of all
reconciliations, monitoring of securitization transactions and the development
of a regular time table for meeting internal and external reporting deadlines.
D&T discussed the reportable conditions described with the Audit Committee of
the Registrant on April 3, 1997. D&T indicated that it did not believe that
any of such reportable conditions were material weaknesses.
As previously disclosed in a Current Report on Form 8-K dated April 16,
1997, the Registrant announced that it had discovered irregularities involving
unauthorized entries made in the Registrant's financial records, that an
ongoing investigation was being conducted by the Registrant, together with its
outside counsel and D&T, and that the Registrant anticipated that it would
restate its previously reported results for the year ended December 31, 1996.
The Registrant engaged D&T to undertake an audit of the adjustments to the
Registrant's previously issued financial statements required as a result of the
discovery of the irregularities. Such audit was not completed.
On May 15, 1997, the Registrant disclosed in a Current Report on Form 8-K
that it had not yet completed the restatement of its financial statements for
1996 and that "No one should rely on either the previously published 1996
financial statements, or the related independent auditors' report."
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Restated financial statements of the Registrant for 1996 have not been
issued.
On January 6, 1998, the Board of Directors of the Registrant authorized
the engagement of the firm of McGladrey & Pullen ("M&P") to audit the
Registrant's financial statements for the years ended December 31, 1996 and
December 31, 1997. Such engagement was approved by the United States
Bankruptcy Court for the District of Delaware on January 15, 1998. During the
course of interviewing M&P for the purpose of requesting an engagement
proposal, the Registrant disclosed to M&P the matters described above. The
Registrant did not request and M&P did not offer any consultation with respect
to such matters. The Registrant has authorized D&T to respond fully to
inquiries of M&P concerning such matters.
The Registrant has provided D&T with a copy of this report and requested
D&T to furnish the Registrant with a letter addressed to the Securities and
Exchange Commission stating whether it agrees with the statements made herein.
The Registrant intends to file any such letter received from D&T as
Exhibit 16.1 to this report within two business days of receipt.
ITEM 7. EXHIBITS.
*16.1 Letter of D&T regarding the statements made herein.
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* To be filed by amendment
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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/ William N. Plamondon
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William N. Plamondon
Dated: January 16, 1998 President and Chief Executive Officer
