Sunstates Corp/DE – ‘8-K’ for 5/15/98

As of:  Friday, 5/29/98   ·   For:  5/15/98   ·   Accession #:  103575-98-1   ·   File #:  1-05300

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Current Report   —   Form 8-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         2     10K 

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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)     May 15, 1998               

(Exact name of registrant as specified in its charter) Sunstates Corporation    

Delaware                             1-5300               22-1664434  
(State or other jurisdiction             (Commission         (IRS Employer      
of incorporation)                        File Number)      Identification No.)

4600 Marriott Drive, Suite 200, Raleigh, N. C. 27612                            
(Address of principal executive offices)      (Zip Code)                        

Registrant's telephone number, including area code   (919) 781-5611             

(Former name or former address, if changed since last report.)                  

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ITEM 2 - DISPOSITION OF ASSETS                                                  

     On May 15, 1998,  LaSalle  National  Bank,  pursuant to a Notice of Private
Sale of  Collateral  dated May 7, 1998 and as approved by an order issued by the
Illinois Circuit Court, sold the common stock of Alba-Waldensian,  Inc. (938,700
shares) and Rocky Mountain  Chocolate  Factory,  Inc.  (799,357  shares) it held
under a loan to certain  of the  Company's  subsidiaries.  The  Company  was not
involved in the  determination of the transaction  pricing and substantially all
of the proceeds from the sale were utilized to retire the subsidiaries'  debt to
LaSalle, which had been in default since January 1997.                          

     The 938,700 shares of Alba-Waldensian,  Inc. ("Alba"),  representing 50.27%
of Alba's  outstanding  stock,  was sold to investors,  including  Alba (295,000
shares) and Mr. Clyde Wm. Engle  (543,700  shares),  the Company's  Chairman and
beneficial  owner of a  substantial  amount  of the  Company's  stock,  for cash
proceeds totaling $7,040,250. Prior to the transaction,  Alba was a consolidated
subsidiary of the Company and accordingly the Company utilized the equity method
to account for its investment in Alba common stock. The recorded  carrying value
of these shares totaled  $13,148,799  resulting in a loss of $6,108,549 upon the
sale.                                                                           

     The  799,357  shares of Rocky  Mountain  Chocolate  Factory,  Inc.  ("Rocky
Mountain"),  representing 27.45% of Rocky Mountain's outstanding stock, was sold
to  investors  including  Rocky  Mountain  (336,000  shares),  certain  of Rocky
Mountain's  officers and  directors  (104,000  shares),  and Mr. Clyde Wm. Engle
(194,357 shares) for cash proceeds totaling $4,116,689. The Company utilized the
equity method of accounting for its  investment in Rocky  Mountain  common stock
with a carrying value of $2,268,257  resulting in a gain of $1,848,432  upon the
sale.                                                                           

     The Company's only remaining  consolidated  operating units are its textile
equipment-manufacturing   subsidiary,   Sew  Simple   Systems,   Inc.   and  its
neighborhood newspaper-publishing subsidiary, Lerner Communications.            

SIGNATURES      

     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.                                           

                                   SUNSTATES CORPORATION

Date: May 29, 1998                              /s/ Glenn J. Kennedy            
                                       Chief Financial Officer

Dates Referenced Herein

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed on:		5/29/98		2					None on these Dates
For Period End:		5/15/98		1		2
		5/7/98		2
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