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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
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 25, 1998
TCC INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS
(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-7399 74-1366626
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
504 LAVACA STREET
SUITE 1004
AUSTIN, TEXAS 78701
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE)
(512) 708-5000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5. OTHER EVENTS
On March 25, 1998, the Registrant issued the press release attached as
Exhibit 99.1 regarding the announcement that it was in preliminary discussions
to sell all of the shares of its subsidiary, Paladin Financial, Inc., to an
acquisition group consisting of some of the senior management of Paladin.
On April 1, 1998, the Registrant issued the press release attached as
Exhibit 99.2 regarding the announcement that it had terminated discussions with
the acquisition group that last week offered to acquire the business of one of
its subsidiaries, Paladin Financial, Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 TCC Industries, Inc. Press Release dated March 25, 1998.
99.2 TCC Industries, Inc. Press Release dated April 1, 1998.
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.
TCC Industries, Inc.
(Registrant)
Date: April 3, 1998 By: /s/ Robert Thomajan
-----------------------------
Robert Thomajan
President
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
99.1 TCC Industries, Inc. Press Release dated March 25, 1998.
99.2 TCC Industries, Inc. Press Release dated April 1, 1998.
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EXHIBIT 99.1
Austin, Texas (March 25, 1998) ... TCC Industries, Inc. (NYSE:TEL)
announced today that it was in preliminary discussions to sell all of the shares
of its subsidiary, Paladin Financial, Inc., to an Acquisition Group consisting
of some of the senior management of Paladin.
In summary, if a transaction is concluded, it is anticipated that the
sale would be completed within two weeks with the Acquisition Group retaining
most of the existing employees of Paladin and paying to TCC consideration
including its loans, advances and receivables.
The original business plan for Paladin was to engage in the purchase,
securitization and sale of Fannie Mae Mortgage Backed Securities (FNMA-MBS) and
the purchase and sale, for cash, of a small quantity of 125 Loan to Value (LTV)
instruments (a 125 LTV is a type of non-prime conventional loan). In the six
months since the inception of the business plan, interest rates have trended
lower, consumer debt has risen and the 125 LTV product has begun to dominate the
market at the expense of the insured Title I loans. Several large companies in
the home equity business have been obliged to take large write-offs on their
loan portfolios and to restate prior year earnings.
In the judgement of TCC's management, 125 LTV loans contain more
inherent risk (since they are for amounts in excess of the acknowledged asset
supporting the loan) than the Title I insured loans, and an expanded commitment
by TCC to such loans does not provide a basis for sustainable growth for TCC
shareholders. TCC management continues to believe that Title I insured loans do
provide such a basis and will maintain this line of business through its
subsidiary, Barton Creek Capital Corporation. The Acquisition Group believes
that TCC's view is overly conservative and has, accordingly, presented its
proposal to acquire the shares and pursue its business plan independent of TCC.
CONTACT: Robert Thomajan, President
Walter A. DeRoeck, Chairman
512-708-5000
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EXHIBIT 99.2
Austin, Texas (April 1, 1998) ... TCC Industries, Inc. (NYSE:TEL)
announced today that it had terminated discussions with an acquisition group
that last week offered to acquire the business of one of its subsidiaries,
Paladin Financial, Inc. The acquisition group, consisting of some members of
Paladin's management, had expressed the view that TCC's business plan for the
purchase and sale of conventional, uninsured mortgage loans known as 125 Loan to
Value (125 LTV), was too conservative and wished to pursue a more aggressive
program in the market as a stand-alone company. TCC reported that it would
maintain and expand its original business plan (which involves the purchase,
securitization and sale of traditional, Title I insured mortgages) and would
acquire 125 LTV product only against a pre-arranged, profitable disposition.
Lastly, TCC announced that a few members of the acquisition group are no longer
employed by TCC.
CONTACT: Robert Thomajan, President
Walter A. DeRoeck, Chairman
512-708-5000
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