Southmark Corp (fka SMRK)

[ghjagman]

Southmark shares 30 years later.
I recently was delivered 300 shares of Southmark that I had purchased back in 1988. Evidently it had been lost in the mail and I just got it today almost 30 years after I had purchased.
Is there any value for this stock now? any help would be appreciated.

[gwd4]

Does anyone still own SMRK? Any news out there?

[Enterprising Investor]

Ended up owing 1.32 percent.

[Enterprising Investor]

Terminated four years ago today.

[Renee]

SMRK revoked:

http://www.sec.gov/litigation/admin/2011/34-65855.pdf

[Renee]

SMRK SEC Suspension:

http://sec.gov/litigation/suspensions/2011/34-65713.pdf

http://sec.gov/litigation/admin/2011/34-65714.pdf

http://dtcc.com/downloads/legal/imp_notices/2011/nscc/otc/OTC-217.pdf

[Enterprising Investor]

SMRK up 328.57 percent (4/19/11)

SOUTHMARK CORP NEW(Other OTC: SMRK.PK )
Last Trade: 0.0030
Trade Time: Apr 19
Change: 0.0023 (328.57%)
Prev Close: 0.00
Open: 0.00
Bid: N/A
Ask: N/A
1y Target Est: N/A
Day's Range: 0.0007 - 0.0030
52wk Range: N/A
Volume: 35,390

[Enterprising Investor]

A&B Capital Corporation owns 59.02 percent.

Source: Texas Franchise Tax Report Public Information Report (11/10/10)

[Enterprising Investor]

A&B Capital Corporation owns 59.02 percent.

Source: Texas Franchise Tax Report Public Information Report (11/12/09)

The prior report dated 10/24/06 details 50.04 percent.

[Enterprising Investor]

Updated mission.

A&B Capital, at 5/24/00, owned a total of 7,346,114 shares of SMRK and 7,965,541 shares of SMRKP, which on 4/30/04 was converted into an additonal 682,799. The adjusted total would 8,028,913 shares.

The 10/24/06 filing shows ownership of 50.04 percent. This would approximate 30,776,812 shares.

A&B Capital would have needed to acquire 22,747,899 shares between 5/20/00 and 10/27/03. However, only 7,413,400 shares traded between these two dates, per historical provided by NASDAQ. [Thanks AIOS]

I now suspect the shares were newly issued.

[AIOS]

Mission Control to enterprisinginvestor...

According to Nasdaq...
Total shares traded since 11/01/1999 is 38,960,357...
3,247,600 traded on 2/14/2000 between $0.075 and $0.025...

Please update mission status.

[Enterprising Investor]

Updated holdings 814,699 (10/27/09)

Purchased 596,692 shares on 10/27/09 at $.002.

A 10,000 share trade cross at $.002 earlier in the day when it was indicated $.002/$.005. Then for some reason, the Bid/Ask then moved to $.0011/$.005. I then placed a 999,999 share order (the maximum single order size for Zions Direct) to just see what would happen. I was in shock when a 596,166 share block traded.

Someone really wanted out!

[Enterprising Investor]

Updated holdings 218,007 (10/12/09)

Purchased 54,000 on 10/12/09 at $.005.

The first 15,000 was made up of a 10,000 and 5,000 blocks traded within 30 seconds. The bid/ask then moved from $.028/$.005 to $.005/$.009. The additional 39,000 shares at $.005 showed up just over 40 minutes later.

An additional 5,000 shares moved at $.045 later in the day, and the bid/ask went to $.0045/$.005.

Thus, it may be impossible to pick up meaningful amounts of shares without pushing prices up dramatically. The average number of shares traded from 8/12/02 to date is only 15,236.

Since I began making new purchases on 8/06/09, 716,697 shares have traded. I missed an opportunity - on 8/14/09, 301,414 shares traded at $.0003.

[Enterprising Investor]

Updated holdings 164,007 (9/23/09)

Purchased 75 shares on 9/22/09.

[The MMs were playing games with me that day when I placed a 999,999 share order (the maximum Zions Direct will accept online) at $.0006 and $.0007.]

Added 53,000 at $.0028 on 9/23/09.

[Yes, they won.]

[Enterprising Investor]

SMRK golden cross potential.

Not a techie. However, 50-day MA (.0004) is approaching the 200-day MA (.0005).

[elcheepo]

LOL.. Buffett also taught me not to invest in company that I can't put my hands on and change.

[Enterprising Investor]

Buffett has taught us one thing...

You do not need to own 100 percent of business to make a great deal of money.

A&B obviously had something in mind by spending the initial $1.8 million in 2000? I suspect the purchase was designed to create a new REIT since the huge NOLCFs have most likely expired.

[Enterprising Investor]

Looking for 22,747,899 shares.

iHub only provides goes back to 8/12/2002. Cumulative trading volume since then is only 15,068,901. The most number of shares trading in one day is 871,377 on 8/23/04, all at $.001.

They must be buying everything available?

I am now a man with a mission!

[elcheepo]

EI. I am not questioning your reasoning for investing...but STOCK 101 has taught = liquidity is essential for entry and exit.

Southmark is sceptical at best!

[Enterprising Investor]

Liquidity is an issue.

A&B Capital was the owner and holder of a total of 965,541 shares of SMRKP (which constitutes approximately 34.1% of the 2,831,997 shares) and a total of 7,346,114 shares of SMRK (which constitutes approximately 20% of the 36,761,096 shares presently outstanding) at 5/20/00. The 965,541 shares of SMRKP would have been converted into 682,799 shares of SMRK, giving the investor 8,028,913 shares.

According to the information filed with Texas SOS on 10/31/06, A&B now owns 50.04 percent or about 30,776,812 shares. I suspect that A&B has been buying a high percentage of the shares available on days SMRK traded over the years.

I would like to find out why? But first, I am off to do some math...

[Enterprising Investor]

Updated holdings 110,932 (8/06/09)

The 30,000 shares were the first shares I purchased since the early 1990s.

[elcheepo]

Nice gain...
Isn't iliquidity a concern?

[Enterprising Investor]

SMRK up 566.7 percent on three trades (9/04/09)

Spread went from $.0003/$.002 to $.0005/$.005

10,000@$.002
28,500@$.002
11,493@$.002

[Enterprising Investor]

SMRK up 566.7 percent on two trades (8/06/09)

40,000@$.0003
30,000@$.0020

[Enterprising Investor]

A&B Capital Corporation owns 50.04 percent.

Source: Texas Franchise Tax Report Public Information Report (10/31/06)

The prior report dated 10/27/03 details 48 percent.

[Enterprising Investor]

A PM stated I left out important facts.

As mentioned earlier, Adams and Brewer were buying the preferred, SMRKP. I began buying at $.25. Dividends were reinvested in more SMRKP until the buyout by A&B. It ended up being one of the best investments I ever made. How good?
The original liquidation preference of SMRKP was $25 per share, plus accrued and unpaid dividends, but as at June 30, 1996, the liquidation preference had been reduced to $9 per share. A final $1.50 was paid in mid-2000. SMRKP then converted in common on April 30, 2004.


Before someone asks, I did not keep up with amount of SMRKP dividends paid. it was cumulative from Day 1 and it took some time for SMRK to begin generating cash from asset sales and litigation. The initial payment obviously eliminated my purchase price by several times.

I am interested in the answer, but more interested in finding new deals. ;o)

[Enterprising Investor]

Somehow I ended up with 80,932 shares?

I bought Southmark debt during Stage III. The debt was exchanged for SMRK. Glenn Adams was brought in as Chairman, President and CEO. Adams held these positions from August 1990 to August 1996. Charles Brewer took over for Adams. Brewer was a lawyer and was the main driving force in asset recovery/litigation.

The annual meetings were nothing fancy, but unlike many corporate managers, these two men actually walked up to me afterwards and talked at length.

SC 13D's can be a great investing tool. In the pre-EDGAR days, the detailed information was difficult to obtain. One day I saw a new story that detailed that Adams was buying the preferred, SMRKP. Brewer did the same thing. I began buying at $.25. Dividends were reinvested in more SMRKP until the buyout by A&B. It ended up being one of the best investments I ever made.

[Enterprising Investor]

Brewer was successful in litigation.

Southmark has recovered a total of $5,953,834 since January 1997 in connection with a successful outcome in Securities and Exchange Commission v. Drexel Burnham Lambert Incorporated, et al. Further, Southmark recovered $580,918 in the settlement of Harmon Envicon Associates v. Southmark Corporation.

In late May, 2000, Southmark was pursuing two claims in which the potential recovery is approximately $3 million in the aggregate.

In Southmark Corporation v. Shulte, Roth & Zabel, L.L.P., Southmark has a judgment in the amount of $1 million in its favor, plus pre-judgment interest. The defendants in this action have obtained an irrevocable standby letter of credit in favor of Southmark in the amount of $1,419,652.22 on December 9, 1999 to cover the required bond pending defendants' appeal of the judgment. The judgment has, in fact, been appealed to the Fifth Circuit and it is expected that oral arguments on the appeal will be heard in the next six months.

In Southmark Corporation v. Jerri Coppa-Knudson, Liquidation Agent, the bankruptcy court following a trial in November 1998 determined that Southmark has a claim for damages against Double Diamond Ranch Limited Partnership in the approximate amount of $1,251,868. The bankruptcy court also ruled, however, that Southmark is entitled to no distributions of assets on account of that claim in that the Partnership has no right of contribution against its affiliated debtors. Southmark appealed this ruling and the amount of Southmark's damages to the District Court. On March 21, 2000, the District Court affirmed the bankruptcy court's calculation of Southmark's damages at $1,251,868, but vacated the portion of the bankruptcy court ruling denying the Partnership's right of contribution. Brewer expected that this issue should be resolved in the next few months.

However, I cannot locate anything regarding successful resolution to these cases.

[Enterprising Investor]

Southmark phone number: 214-750-5800
Source: 8-K (5/11/04)

Type: Land Line
Provider: Southwestern Bell
Source: 411.com

The number is shown used by various people working for Income Opportunity Realty Investors (IOT-AMEX) andSyntek West, Inc (SWI). SWI owns stakes in American Realty Investors (ARL-NYSE) and IOT.

Gene Phillips, former COB and CEO of Southmark, owns 100 percent of SWI.
http://www.genephillips.org/index.html

[Enterprising Investor]

A&B Capital Corporation is controlling shareholder.

A&B Capital was the owner and holder of a total of 965,541 shares of SMRKP (which constitutes approximately 34.1% of the 2,831,997 shares) and a total of 7,346,114 shares of SMRK (which constitutes approximately 20% of the 36,761,096 shares presently outstanding) at 5/20/00.

http://sec.gov/Archives/edgar/data/701996/000095012900003294/0000950129-00-003294-0001.txt

[Enterprising Investor]

SMRK shares outstanding: 61,504,420 (4/30/04)

Southmark’s reorganization plan cancelled all existing equity securities and issued certain additional securities, including the Redeemable Series A Preferred Stock (SMRKP) and common stock (SMRK). SMRKP, after retirements and settlements, settled at 2,831,997 shares outstanding as well as 36,761,096 shares of SMRK. Pursuant to the governing instruments of Southmark, the SMRKP holds substantially all of the rights with respect to Southmark, including the right to elect all but one of the seven scheduled directors. Southmark’s fiscal year-end is June 30 of each year.

The original liquidation preference of SMRKP was $25 per share, plus accrued and unpaid dividends, but as at June 30, 1996, the liquidation preference had been reduced to $9 per share. Under Item 7 of the Articles of Amendment to the Amended and Restated Articles of Incorporation of Southmark as filed August 10, 1990, with the Secretary of State of Georgia, an “automatic conversion” provision requires the shares of SMRKP to be automatically converted into (on a pro rata basis) SMRK issued to holders of SMRKP pursuant to the conversion to constitute 5% of the shares of SMRK issued after a specified time (assuming no redemptions of SMRKP were made as of the conversion date) on a fully-diluted basis and proportionately less if the SMRKP had been previously redeemed. By virtue of the reduced number of shares of SMRKP pro rata adjustment based upon 2,831,997 shares outstanding instead of 4,000,000 shares outstanding would be 3.53999% of the common stock on a fully-diluted basis. The automatic conversion date under Item 7 is to be the date on which the fair market value (as determined in good faith by Southmark) of the “Disposition Assets” (as defined) is less than $1,000,000, and on that date, each share of SMRKP then issued and outstanding is to be automatically converted into the right to receive a pro rata amount of shares of Common stock issued to the holders of the SMRKP based on the conversion formula.

The term “Disposition Assets” means all assets of Southmark and its subsidiaries and its interest in Affiliates, including but not limited to, cash held by subsidiaries (less cash actually required for working capital), real property, interest in partnerships, mortgages receivable, advances and other amounts receivable, stock, causes of action and income and receipts therefrom and all cash and non-cash proceeds of any of the foregoing, but excluding certain specified interests which have been previously sold, any residual net operating loss carryforward and other tax credits or tax attributes of Southmark, working capital requirements for one month, and an amount of cash sufficient for Southmark to make payments required under the Plan (which has already occurred), and the proceeds of any recovery of litigation required to be distributed pursuant to a particular section of the Plan (no longer applicable).

Southmark’s remaining assets at May 1, 2000 consisted of cash (approximately $700,000) and litigation claims, one significant of which resulted in a judgment in favor of Southmark which was then on appeal with a cash supersedeas bond posted. At that time, the Board of Directors of Southmark made the determination that a combination of cash and litigation potential exceeded the required minimum amount of Disposition Assets to avoid automatic conversion of the SMRKP.

Through April 30, 2004, Southmark continues to have prospects of recovery of sums from outstanding litigation, but its cash position has been reduced through a distribution occurring in August 2000 to the holders of certain shares of SMRKP of $1.50 per share. As of March 31, 2004, the Board of Directors of Southmark determined that Southmark’s remaining assets at such date consist of cash (approximately $5,000) and litigation potential, but in good faith, the Board of Directors of Southmark has determined that the fair market value of the Disposition Assets was as of such time less than $1,000,000. Therefore, effective as of April 30, 2004, each share of SMRKP then outstanding was automatically converted into the right to receive a pro rata amount of shares of common stock based on a conversion formula.

As of April 30, 2004, Southmark had issued and outstanding a total of 56,572,962 common shares.

Based upon that number, the 2,831,997 shares of SMRKP were automatically converted into an aggregate of 2,002,677 shares of common stock (or 0.707167 shares of common stock for each share of SMRKP), which increased the number of issued and outstanding shares of SMRK by the same amount (before any adjustments for fractional shares) to 58,575,639 shares.

SMRK allowed certificates which previously represented shares of SMRKP to represent a pro rata amount of common stock based upon the conversion ratio of 0.707167 shares of common stock for each share of SMRKP. Over time, as certificates representing shares of SMRKP are surrendered to Southmark’s Transfer Agent, certificates representing shares of Common stock will be issued to the holders thereof.

SMRK also had outstanding 757,341 shares of Series C Convertible Preferred Stock which, pursuant to the Articles of Amendment to the Articles of Incorporation of Southmark setting forth the Certificate of Designations, Preferences and Relative Participating or Optional or Other Special Rights and Qualifications, Limitations or Restrictions thereof for such Series C Convertible Preferred Stock provides that all shares in such series shall also be subject to automatic conversion into the right to receive a pro rata of shares of Common stock at the same time as the holders of the SMRKP, and the aggregate amount of shares of Common stock to be issued to the holders of the Series C Convertible Preferred Stock pursuant to the automatic conversion are to constitute 5% of the shares of Common stock issued on a fully-diluted basis after giving effect to the automatic conversion of SMRKP. Based upon the automatic conversion of the SMRKP at April 30, 2004, the 757,341 shares of Series C Convertible Preferred Stock were converted into 2,928,781 shares of Common stock based upon a conversion ratio of 3.867192 shares of Common stock for each share of Series C Convertible Preferred Stock then outstanding, which further increased the number of issued and outstanding shares of Common stock by the same amount to a total of 61,504,420.

SMRK allowed certificates which previously represented shares of Series C Convertible Preferred Stock to represent a pro rata amount of Common stock based upon the conversion ratio of 3.867192 shares of Common stock for each share of Series C Convertible Preferred Stock. Over time, as certificates representing shares of Series C Convertible Preferred Stock are surrendered to Southmark’s Transfer Agent, certificates representing shares of Common stock will be issued to the holders thereof.

[HDOGTX]

SMRK dormant Shell, +66% on 300 x 10 day ave volume