-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JyRZDij18kMJVSR7GjIPfwlDk8DkpHREnO/kbF5HlMHVEyWsnIrSDXl6Jg1Xca8w XJ0GIUfJNziByZq1fh+0Bw== 0000950130-99-003740.txt : 19990623 0000950130-99-003740.hdr.sgml : 19990623 ACCESSION NUMBER: 0000950130-99-003740 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19990621 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE FINANCIAL SERVICES GROUP INC CENTRAL INDEX KEY: 0001024321 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 931223879 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-49579 FILM NUMBER: 99649358 BUSINESS ADDRESS: STREET 1: 1776 SW MADISON ST CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032235600 MAIL ADDRESS: STREET 1: 1776 SW MADISON ST CITY: PROTLAND STATE: OR ZIP: 97205 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE REAL ESTATE INVESTMENT TRUST INC CENTRAL INDEX KEY: 0001048566 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 911851535 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O WILSHIRE FINANCIAL SERVICES GROUP IN STREET 2: 1776 SW MADISON STREET CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032235600 MAIL ADDRESS: STREET 1: C/O WILSHIRE FINANCIAL SERVICES GROUP IN STREET 2: 1776 SW MADISON STREET CITY: PORTLAND STATE: OR ZIP: 97205 SC 13D/A 1 SCHEDULE 13D/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Amendment No. 1 (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Wilshire Financial Services Group Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value - -------------------------------------------------------------------------------- $0.01 per share (Title of Class of Securities) 971867106 - -------------------------------------------------------------------------------- (CUSIP Number) Wilshire Real Estate Investment Trust Inc. 1776 S.W. Madison Street Portland, Oregon 97205 (503) 223-5600 with a copy to: Daniel E. Titelbaum, Esq. Heller Ehrman White & McAuliffe 333 Bush Street, San Francisco, California 94104 (415) 772-6000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 18, 1999 - -------------------------------------------------------------------------------- (Date of Event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box . (Continued on following pages) (Page 1 of 9 pages) SCHEDULE 13D - ------------------------ -------------------------- CUSIP No. 971867106 Page 2 of 9 Pages --------- --- --- - ------------------------ -------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Wilshire Real Estate Investment Trust Inc. EIN: 52-2081138 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX, IF A MEMBER OF A GROUP* (a) [X] (b) [_] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION Maryland - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER None ----------------------------------------------------------- NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED 2,874,791 ----------------------------------------------------------- BY EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH None ----------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,874,791 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,874,791 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.35% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - ------------------- ----------------------- CUSIP No. 971867106 Page 3 of 9 Pages --------- ---- ---- - ------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Wilshire Real Estate Partnership, L.P. EIN: 93-1236269 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX, IF A MEMBER OF A GROUP* (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER None ------------------------------------------------------- NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED 2,874,791 ------------------------------------------------------- BY EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH None 10 SHARED DISPOSITIVE POWER 2,874,791 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,874,791 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.35% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. INTRODUCTION The Reporting Persons herein named hereby file this Amendment No. 1 to the Statement on Schedule 13D filed by the Reporting Persons on June 10, 1999 (the "Statement") in respect of shares of Common Stock Wilshire Financial Services Group Inc. Defined terms not otherwise defined herein have the meanings ascribed thereto in the Statement. Only those Items amended are reported herein. Item 4. Purpose of Transaction Item 4 is amended by adding the following paragraph: WREI has forwarded a letter to the directors of the Issuer and certain shareholders of the Issuer outlining concerns about the influence WREI believes that such shareholders are exerting over the Issuer. The letter also addresses certain concerns WREI has relating to the management agreement between WREI and Wilshire Realty Services Corporation, a subsidiary of the Issuer, and other matters of concern to WREI. A copy of the letter is attached hereto as Exhibit 4(2). Item 7. Material to Be Filed as Exhibits Item 7 is amended by adding the following: Exhibit 4(2): Letter to the board of directors and certain shareholders of the Issuer dated June 18, 1999. SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: June 18, 1999 Wilshire Real Estate Investment Trust Inc. By: /s/ Andrew A. Wiederhorn ----------------------------------------- Andrew A. Wiederhorn Title: Chief Executive Officer Wilshire Real Estate Partnership, L.P. By: Wilshire Real Estate Investment Trust Inc. Its: General Partner By: /s/ Andrew A. Wiederhorn ----------------------------------------- Andrew A. Wiederhorn Title: Chief Executive Officer List of Exhibits ----------------
Exhibit No. Description Page - ----------- ----------- ---- 4(2) Letter to the board of directors and 7 certain shareholders of the Issuer dated June 18, 1999
EX-4.2 2 LETTER TO THE BOARD OF DIRECTORS DATED 6/18/99 Exhibit 4(2) [WREI LETTERHEAD] June 18, 1999
Ms. Elizabeth F. Aaroe Mr. Robert Deutschman Principal Cappello Group, Inc. Fisher Consulting, LLC 1299 Ocean Avenue, Suite 306 8181 SW Edgewater, West Santa Monica, CA 90401 Wilsonville, OR 97070 Mr. Daniel A. Markee Mr. Larry B. Faigin Senior Vice President President LendSource, Inc. GreenPark Group, LLC 566 Prairie Center Drive, Suite 201 3030 Old Ranch Parkway, Suite 450 Eden Prairie, MN 55344 Seal Beach, CA 90740 Mr. Geoffrey Hawkins Mr. Brian Lavin Capital Research and Management American Express Financial Advisors 11100 Santa Monica Boulevard 3000 IDS Tower 10 Los Angeles, CA 90025 Minneapolis, MN 55440 Mr. Lawrence Mendelsohn Mr. Andrew Wiederhorn President Chairman and Chief Executive Officer Wilshire Financial Services Group Inc. Wilshire Financial Services Group Inc. 1776 SW Madison Street 1776 SW Madison Street Portland, OR 97205 Portland, OR 97205
Duties as Directors and Controlling Shareholders of Wilshire ------------------------------------------------------------ Financial Services Group Inc. ----------------------------- Dear Elizabeth and Gentlemen, As you know, Wilshire Real Estate Partnership L.P. and its parent Wilshire Real Estate Investment Trust Inc. (together "WREI") are the third-largest shareholders of Wilshire Financial Services Group Inc. as a result of the recent restructuring. WREI was nonetheless excluded by the noteholders committee from participating in that group and from participating in selection of the new board. WREI would therefore like to bring some concerns to the attention of the new WFSG board. WREI's primary concern relates to the relationship between the majority of the new board and the two shareholders receiving this letter. The board of WFSG has a fiduciary duty to act in the interest of all shareholders. It is not to take direction from a controlling group of shareholders, or share confidential information with that group that it does not share with all shareholders, unless these controlling shareholders treat themselves as "insiders" for all purposes, including the federal securities laws. WREI believes that Capital Research and American Express Financial Advisors may be substantially directing the business of WFSG, and receiving confidential information about WFSG not available to other shareholders. WREI believes this to be contrary to WFSG's representations to noteholders, other creditors of WFSG, and WFSG shareholders that WFSG would be managed by an independent board of directors. For this and other reasons, WREI believes that these shareholders are "affiliates" and "controlling persons" of WFSG under federal banking and securities laws. Among other duties and obligations, these investors may be liable for violations of securities laws by WFSG, and will be subject to limitations on their ability to sell WFSG's equity securities such as those contained in Rule 144. It is the obligation of both these investors and the board of WFSG to see that Rule 144 is followed with regard to the equity securities owned by these two investors. WREI would expect that the board of WFSG would function as an independent and collegial body. That means that matters would be discussed by board members with all other board members, and not by some board members with two shareholders. WREI would expect that all board members would consult, for example, about an appropriate replacement for Ed Foehl. As you know, WREI is managed by a wholly owned subsidiary of WFSG, Wilshire Realty Services Corporation ("WRSC"). In light of this relationship, the independent directors of WREI are extremely concerned about the effect the restructuring may or will have on the existing management team of WFSG and its subsidiaries, particularly WRSC. WREI believes that unjustified changes in the management team of WRSC could have a deleterious effect on the activities and returns of WREI. WREI would view any unwarranted change in management of WRSC as a default under the management agreement between WRSC and WREI. Similar to the effect a material change in continuity of management of WFSG will have on WREI directly, WREI is concerned about changes both in the board of directors and employees in other WFSG subsidiaries, including First Bank of Beverly Hills F.S.B. WREI is already seeing evidence of interference with management of WFSG and its subsidiaries that causes concern. For example, WREI understands that the WFSG board has recently stated that management cannot take any material action without board authorization. If true, hamstringing of management both prevents WREI from obtaining the level of service to which it is entitled under its management agreement with WRSC, and suggests that the board may be improperly interfering with the management of First Bank. It also risks destroying morale among the employees of WFSG and its subsidiaries. These matters are of serious concern to WREI. This is particularly the case with First Bank, since interference with the management of First Bank is not only an issue for WREI but also for the Office of Thrift Supervision. WREI is also concerned about who advises WFSG. In light of WFSG's position as the parent company of the manager of WREI, WREI believes that it is essential that WFSG not be advised (other than in disputes between WFSG and WREI) by a party whose interests are directly adverse to WREI. Because of the past and present disputes between WREI, WFSG and certain advisors hired by WFSG, and the risk of potential future conflicts, WREI should be consulted before WFSG hires advisors. WREI reserves the right to publicly note its objection to any advisor hired by WFSG to the extent that advisor has a conflict of interest with WREI. Finally, as you know, there is a dispute between WREI and WFSG (principally with the members of the noteholders committee and their advisors) with regard to the dollar amount of a servicing-fee credit at WFSG's 50.01% owned subsidiary, Wilshire Credit Corporation ("WCC"), which provides loan servicing to WREI. WREI expects the board of directors of WFSG to determine with WREI the resolution of such dispute without ongoing input and advice from other shareholders unless they seek such advice from all shareholders. WREI has confined this letter to matters that affect it directly, including the independence of WFSG' board, the effect of events at WFSG or WREI through the Management Agreement and the fee dispute between our companies. These are matters of concern to the independent directors of WREI. We seek only to safeguard the interests of our stockholders. In this spirit, WREI's independent board would like to discuss these issues with you, as well as a response to the proposal in our May 11 letter. WREI must, of course, reserve its right to take whatever action it deems appropriate to enforce both its rights as a shareholder and as a contracting party under the Management Agreement and the loan servicing arrangement with WCC. Very truly yours, WREI by its Independent Board of Directors -----END PRIVACY-ENHANCED MESSAGE-----