SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(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)
SMART CHOICE AUTOMOTIVE GROUP, INC.
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(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
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(Title of Class of Securities)
831686 20 9
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(CUSIP Number)
Richard Lieberman
FINOVA CAPITAL CORPORATION.
4800 North Scottsdale Boulevard
Scottsdale, AZ 85251
(480) 636-4800
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communication)
November 8, 2001
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(Date of Event Which Requires Filing of This Statement)
If the filing persons has previously filed a statement on Schedule 13G
to report the acquisition that 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
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the Notes)
CUSIP No. 831686 20 9 13D Page 2 of 9 Pages
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NAME OF REPORTING PERSON
1. SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Finova Capital Corporation
94-1278569
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2. (a) [_]
(b) [_]
N/A
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SEC USE ONLY
3.
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SOURCE OF FUNDS
4. OO
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [_]
5. N/A
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CITIZENSHIP OR PLACE OF ORGANIZATION
6. Delaware
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SOLE VOTING POWER
7.
NUMBER OF 44,857,909
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8.
OWNED BY 0
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EACH SOLE DISPOSITIVE POWER
9.
REPORTING 44,857,909
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10. 0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11. 44,857,909
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12.
N/A
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13. 93.9%
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TYPE OF REPORTING PERSON
14. CO
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Page 3 of 9 Pages
SCHEDULE 13D OF FINOVA CAPITAL CORPORATION
WITH RESPECT TO SECURITIES OF SMART CHOICE AUTOMOTIVE GROUP, INC.
Item 1. Security and Issuer
Common stock, par value $0.01 per share
Smart Choice Automotive Group, Inc.
5200 South Washington Avenue
Titusville, FL 33780
Item 2. Identity and Background
This statement is being filed by Finova Capital Corporation ("Finova"),
a Delaware corporation, which is engaged in the business of providing commercial
finance and capital to mid-size businesses in the United States and abroad.
Finova's principal business and office address is 4800 North Scottsdale
Boulevard, Scottsdale, AZ 85351. Finova has not been convicted of a criminal
proceeding during the last five years, nor has Finova during the last five years
been a party to any civil proceeding of a judicial or administrative body of
competent jurisdiction which resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activity subject to,
federal or state securities laws or finding any violation with respect to such
laws.
The executive officers and director of Finova, and/or any person
controlling Finova, are identified below:
The executive officers of Finova are as follows:
Ian M. Cumming Chairman of the Board
Lawrence S. Hershfield Chief Executive Officer
Joseph S. Steinberg President
William J. Hallinan Executive Vice President-General Counsel & Secretary
Randolph Todd Abrahams Senior Vice President-Healthcare Finance
Derek C. Bruns Senior Vice President-Internal Audit
John B. Burtchaell Jr. Senior Vice President-Special Assets
Anthony P. DeMarco Senior Vice President-Corporate Credit & Reporting
Burt M. Feinberg Senior Vice President-Portfolio Management
Jack Fields III Executive Vice President-Specialty Finance
Glenn E. Gray Senior Vice President-Portfolio Management
Randall R. Heller Senior Vice President-Portfolio Management
Richard Lieberman Senior Vice President, Deputy General Counsel and
Secretary
Don A. Luttenegger Senior Vice President-Transporation Finance
Thomas E. Mara Senior Vice President
Bruno A. Marszowski Senior Vice President-Controller and Chief Financial
Officer
Scott H. Mitchell Senior Vice President-National Audit Manager
Joseph Orlando Senior Vice President
Page 4 of 9 Pages
Jeffrey A. Owings Senior Vice President-Resort Finance Lending
William C. Roche Senior Vice President-Chief Administrative Officer
Mirian C. Santa Cruz Senior Vice President-Special Assets
Stuart A. Tashlik Senior Vice President-Chief Financial Officer
The directors of Finova, including their occupations and businesses
addresses are as follows:
Thomas F. Boland
Managing Director
Seneca Financial Group, Inc.
39 Lewis Street
Greenwich, CT 06830
Ian M. Cumming
Leucadia National Corporation
529 East South Temple
Salt Lake City, UT 84102
G. Robert Durham
244 Carlyle Lake Drive
Creve Coeur, MO 63141
Lawrence Hershfield
The FINOVA Group Inc
4800 N. Scottsdale Road
Scottsdale, AZ 85251
R. Gregory Morgan
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35 FL
Los Angeles, CA 90071
Kenneth R. Smith
Department of Economics
McClelland Hall Room #430MM
The University of Arizona
Tucson, Arizona 85721
Joseph S. Steinberg
Leucadia National Corporation
315 Park Avenue South, 20 FL
New York, NY 10010
Finova is a wholly-owned subsidiary of FINOVA Group, Inc. The executive
officers and principal place of business of FINOVA Group, Inc. are as follows:
Ian M. Cumming Chairman of the Board
Page 5 of 9 Pages
Lawrence S. Hershfield Chief Executive Officer
Joseph S. Steinberg President
William J. Hallinan Executive Vice President-General Counsel & Secretary
Derek C. Bruns Senior Vice President-Internal Audit
Bruno A. Marszowski Senior Vice President-Controller and Chief Financial Officer
William C. Roche Senior Vice President and Chief Administrative Officer
Stuart A. Tashlik Senior Vice President-Planning and Communications
Richard Lieberman Senior Vice President, General Counsel and Secretary
FINOVA Group, Inc.
4800 Scottsdale Road
Scottsdale, Arizona 85251
The directors of FINOVA Group,Inc., including their occupations and
businesses addresses are as follows:
Thomas F. Boland
Managing Director
Seneca Financial Group, Inc.
39 Lewis Street
Greenwich, CT 06830
Ian M. Cumming
Leucadia National Corporation
529 East South Temple
Salt Lake City, UT 84102
G. Robert Durham
244 Carlyle Lake Drive
Creve Coeur, MO 63141
Lawrence Hershfield
The FINOVA Group Inc
4800 N. Scottsdale Road
Scottsdale, AZ 85251
R. Gregory Morgan
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35 FL
Los Angeles, CA 90071
Kenneth R. Smith
Department of Economics
McClelland Hall Room #430MM
The University of Arizona
Tucson, Arizona 85721
Page 6 of 9 Pages
Joseph S. Steinberg
Leucadia National Corporation
315 Park Avenue South, 20 FL
New York, NY 10010
None of the foregoing persons has been convicted in a criminal
proceeding during the last five years nor has any such person during the last
five years been a party to any civil proceeding of a judicial or administrative
body of competent jurisdiction which resulted in a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The Issuer and Crown Group, Inc. are guarantors, under amended and
restated guaranties dated November 18, 1999 (the "Guaranties," and each a
"Guaranty"), for certain related parties in connection with debt owed to Finova
under that Second Amended and Restated Loan and Security Agreement dated as of
November 9, 1998 ("Loan Agreement"), as amended by that Third Amended and
Restated Schedule to the Loan Agreement dated as of September 25, 2000. The
securities described in Item 5 hereof were acquired in exchange for Finova
entering into that Forbearance Agreement among Finova, the Issuer and related
parties of the Issuer dated November 8, 2001 (the "Forbearance Agreement") (as
described in Item 6) and that Settlement Agreement between Finova and Crown
Group, Inc. dated November 8, 2001 (the "Settlement Agreement")(as described in
Item 6). The Forbearance Agreement and the Settlement Agreement are attached
hereto as Exhibits 1 and 2, respectively, and are expressly incorporated by
reference herein.
Item 4. Purpose of Transaction.
The purpose of the transaction was to facilitate the continued
operations of the Issuer. As described in greater detail in the Forbearance
Agreement, material events of default under the Loan Agreement entitled Finova
to exercise its remedies against the Issuer and its related parties and
subsidiaries under the Loan Agreement and the Guaranties, including the
immediate recovery of collateral. Finova acquired an option to purchase the
Issuer's remaining authorized but unissued common stock as consideration for the
partial and conditional forbearance of its rights and remedies against the
Issuer under the Loan Agreement and Issuer's Guaranty. In addition, pursuant to
the Settlement Agreement, Finova settled the limited liability of Crown Group,
Inc. under its Guaranty in exchange for a substantial cash payment by Crown
Group, Inc. and an option to purchase shares of the Issuer held by Crown Group,
Inc.
Pursuant to the Forbearance Agreement, the Issuer agreed to wind down
the operations of its unprofitable Florida subsidiaries and Finova foreclosed
upon certain assets from these subsidiaries that were collateral under the Loan
Agreement. These subsidiaries and the assets foreclosed upon by Finova represent
a material portion of the business of the Issuer. However, the execution of the
Forbearance Agreement allows the continued operations of the Issuer and its
subsidiaries with operations in Texas.
Finova does not presently intend to exercise its options to purchase
stock of the Issuer from either Crown Group, Inc. or from the Issuer.
Page 7 of 9 Pages
There is no affiliation between Finova and Crown Group, Inc. Other
than described above, Finova has no present intentions of causing any of the
acts or events described in Item 4 of Schedule 13D.
Item 5. Interest in the Securities of the Issuer.
(a) Finova beneficially owns in the aggregate 44,857,909 shares of
the Issuer's common stock. Finova holds an option to purchase 38,000,000 shares
of the Issuer's authorized but unissued common stock from the Issuer and an
option to purchase 6,857,909 shares of the Issuer's common stock from Crown
Group, Inc. Finova beneficially owns approximately 93.9% of the common stock of
the Issuer, as determined in accordance with Rule 13d-3(d)(1).
(b) Finova possesses sole voting and dispositive powers with respect
to all of the securities of the Issuer beneficially owned by it.
(c) Except as set forth elsewhere in this Schedule, Finova has not
effected any transactions in the Issuer's common stock during the 60 days prior
to the date hereof.
(d) Not applicable
(e) Not applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with respect
to Securities of the Issuer.
On November 8, 2001, Finova, the Issuer and related parties of the
Issuer entered into the Forbearance Agreement. Under the Forbearance Agreement,
Finova was issued a 120-day option to purchase 38,000,000 shares of the Issuer's
authorized but unissued common stock ("Issuer Option") at an exercise price of
$0.30 per share. As consideration, Finova agreed to conditionally forbear, for a
period of up to 60 days, the exercise of its remedies under the Loan Agreement
and Guaranty resulting from a material breach of such agreements by the Issuer
and its related parties. Also under this Forbearance Agreement, Finova was
issued an option to purchase the equity interests in certain related parties to
the Issuer ("Related Party Option"). However, the terms of the Forbearance
Agreement provide that Finova may exercise only one of the two options granted
under the agreement. Upon the closing of a purchase under either the Issuer
Option or the Related Party Option, the remaining unexercised option shall
immediately terminate.
Also on November 8, 2001, Finova and Crown Group, Inc. entered into
the Settlement Agreement. Under the Settlement Agreement, Finova was issued a
120-day option to purchase 6,857,907 shares of the Issuer's common stock held by
Crown Group, Inc. ("Crown Option") at an aggregate exercise price of $1.00 and
Finova also received a cash payment of $1 million. As consideration for the
grant of the Crown Option and the cash payment, Finova agreed to release Crown
from any remaining liability arising from Crown Group, Inc.'s obligations under
its Guaranty. The Crown Option may be exercised in whole, but not in part. The
exercise of the Crown Option is also conditioned on the lack of exercise of the
Related Party Option. Upon the
Page 8 of 9 Pages
closing of a purchase under the Related Party Option, the Crown Option shall
immediately terminate.
Item 7. Material to be Filed as Exhibits.
(1) Forbearance Agreement entered into as of November 8, 2001 among
Finova, the Issuer, Florida Finance Group, Inc., Liberty Finance Company, Smart
Choice Receivables Holding Company, First Choice Auto Finance, Inc., Paaco
Automotive Group, L.P., Premium Auto Acceptance Corporation and SC Holdings,
Inc. relating to the grant of the options to purchase the Issuer's common stock
and the limitations thereon.
(2) Settlement Agreement entered into as of November 8, 2001 between
Finova and Crown Group, Inc. relating to the grant of the options to purchase
the Issuer's common stock and the limitations thereon.
Page 9 of 9 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 21, 2001 By: /s/ Philip Clark
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Name: Philip Clark
Title: Vice President - Assistant Secretary
EXHIBIT INDEX
EX_1 ..................... Forbearance Agreement
EX_2 ..................... Settlement Agreement