<PAGE>   1



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

 X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---    EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1995

                                       OR

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---    EXCHANGE ACT OF 1934

              FOR TRANSITION PERIOD FROM            TO 
                                         ----------    ----------

                         COMMISSION FILE NUMBER 1-6802
                               LIBERTE INVESTORS
             (Exact name of Registrant as specified in its Charter)


      CREATED UNDER DECLARATION OF TRUST                  75-1328153
           PURSUANT TO THE LAWS OF                      (I.R.S. Employer
      THE COMMONWEALTH OF MASSACHUSETTS                 Identification No.)
         (State or other jurisdiction
      of incorporation or organization)       
                                                 
           600 N. PEARL ST., SUITE 420                         75201
                  DALLAS, TEXAS                              (Zip Code)
      (Address of principal executive offices)    

       Registrant's telephone number, including area code (214) 720-8950

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                                                    YES   X      NO  
                                                        ------      ------

         APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
                                                    YES   X *    NO 
                                                        ------      ------

*  The registrant's confirmed plan of reorganization under Chapter 11 of the
Bankruptcy code did not provide for the distribution of securities.

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of each of the issuer's class of securities as
of February 9, 1996:
Shares of Beneficial Interest, no par value - 12,153,658 shares.

<PAGE>   2
                                   FORM 10-Q
                    FOR THE QUARTER ENDED DECEMBER 31, 1995
                               LIBERTE INVESTORS


                                     INDEX

<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----
<S>                                                                                                                    <C>
PART I - FINANCIAL INFORMATION  
 
   ITEM 1.    FINANCIAL STATEMENTS (UNAUDITED)

       Consolidated Balance Sheet - December 31, 1995 and June 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . 3

       Consolidated Statement of Operations - Quarter and Six Months Ended
          December 31, 1995 and 1994  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

       Consolidated Statement of Cash Flows - Six Months Ended
          December 31, 1995 and 1994  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

       Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

   ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

PART II - OTHER INFORMATION

   ITEM 2.    CHANGES IN SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

   ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

INDEX TO EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
</TABLE>




                                      2
<PAGE>   3



                         PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET
LIBERTE INVESTORS AND SUBSIDIARY

<TABLE>
<CAPTION>
                                                                       December 31,              June 30,
                                                                           1995                    1995
                                                                       (Unaudited)              (See Note)  
                                                                     ---------------          --------------
<S>                                                                   <C>                      <C>
Assets
Notes Receivable:
    RPI                                                               $    5,168,585           $   5,406,132
    Mortgage loans                                                         1,297,512                 401,240
Foreclosed real estate:
    Nonearning - NOTE B                                                    3,775,084              15,385,214
                                                                      --------------           -------------
                                                                          10,241,181              21,192,586

Less:  Allowance for possible losses                                          92,005              10,498,922
                                                                      --------------           -------------
                                                                          10,149,176              10,693,664


Unrestricted cash and cash equivalents                                    21,691,397              20,576,517
Restricted cash and cash equivalents                                          58,928                  59,245
Accrued interest and other receivables                                       154,099                 103,888
Other assets                                                                 545,761                 602,664
                                                                      --------------           -------------
                                                                      $   32,599,361           $  32,035,978
                                                                      ==============           =============
                                                                                                            
------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Liabilities
Accrued and other liabilities                                         $      442,753           $     416,164

Shareholders' Equity
Shares of Beneficial Interest, no par value,
    unlimited authorization:
    12,423,208 issued and 12,153,658 outstanding,
    net of 269,550 shares held in Treasury, at
    December 31, 1995 and June 30, 1995                                   32,156,608              31,619,814
                                                                      --------------           -------------
                                                                      $   32,599,361           $  32,035,978
                                                                      ==============           =============
</TABLE>




NOTE:      The balance sheet at June 30, 1995, has been derived from the
           audited financial statements at that date.


See notes to consolidated financial statements.





                                       3
<PAGE>   4



CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
LIBERTE INVESTORS AND SUBSIDIARY


<TABLE>
<CAPTION>
                                                      Quarter Ended                   Six Months Ended
                                                       December 31,                      December 31,          
                                             ------------------------------     -------------------------------
                                                 1995              1994             1995             1994      
                                             ------------     -------------     ------------     --------------
<S>                                          <C>              <C>               <C>              <C>
Income
Notes receivable interest                    $    130,420     $     156,119     $    250,840     $      400,447
Investment interest                               307,001           168,163          611,483            283,343
Gain on disposition of real estate                439,161                --          446,001                 --
Consulting and other                              212,205           500,000          280,335            601,210
                                             ------------     -------------     ------------     --------------
                                                1,088,787           824,282        1,588,659          1,285,000
                                             ------------     -------------     ------------     --------------

Expenses
Provision for possible losses                          --         1,682,000               --          2,192,000
Salaries and related costs                        146,003           190,653          246,102            373,444
General and administrative                        100,651            85,691          195,796            177,567
Legal, audit and advisory                         198,820            20,000          454,778             41,754
Foreclosed real estate                             28,830            88,354           90,064            186,364
Management fees                                        --            58,340               --            128,961
Trustees' fees and expenses                        38,100             8,100           55,200             21,900
                                             ------------     -------------     ------------     --------------
                                                  512,404         2,133,138        1,041,940          3,121,990
                                             ------------     -------------     ------------     --------------

Net income (loss)                            $    576,383     $  (1,308,856)    $    546,719     $   (1,836,990)
                                             ============     =============     ============     ============== 


Net income (loss) per Share 
    of Beneficial Interest                           $.05             $(.11)            $.04              $(.15)


Weighted average number of
    Shares of Beneficial Interest              12,153,658        12,423,208       12,153,658         12,423,208


Cash dividends declared per share                      --                --               --                 --
</TABLE>


See notes to consolidated financial statements.


                                       4
<PAGE>   5



CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
LIBERTE INVESTORS AND SUBSIDIARY



<TABLE>
<CAPTION>
                                                                                    Six Months Ended
                                                                                       December 31,        
                                                                           ----------------------------------
                                                                                 1995               1994     
                                                                           --------------       -------------

<S>                                                                        <C>                  <C>
Operating activities:
    Net income (loss)                                                      $      546,719       $  (1,836,990)
    Noncash expenses and revenues included in net loss:
         Provision for possible losses                                                 --           2,192,000
    Net change in other receivables, assets and liabilities                          (127)           (109,422)
    Income from impaired loans                                                   (273,110)                 --
    Gains from disposition of foreclosed real estate                             (446,001)                 --
                                                                           --------------       -------------
         Net cash provided by operating activities                               (172,519)            245,588
                                                                           --------------       -------------


Investing activities:
    Collections on mortgage loans                                                 401,937             550,995
    Collections on RPI note receivable                                            237,547             356,321
    Advances on mortgage loans                                                         --            (141,969)
    Expenditures on foreclosed real estate                                             --            (109,309)
    Proceeds from the disposition of foreclosed real estate                       647,598           9,909,804
    Net sales of restricted cash investments                                          317              56,555
                                                                           --------------       -------------
         Net cash provided by investing activities                              1,287,399          10,622,397
                                                                           --------------       -------------


Net increase in unrestricted cash and cash equivalents                          1,114,880          10,867,985
Unrestricted cash and cash equivalents at beginning of period                  20,576,517           9,157,640
                                                                           --------------       -------------

Unrestricted cash and cash equivalents at end of period                    $   21,691,397       $  20,025,625
                                                                           ==============       =============

Schedule of noncash investing activities:
    Transfer of mortgage loans to foreclosed real estate                   $           --       $   4,792,781
    Charge-offs to allowance for possible losses, net - NOTE B             $   10,406,917       $   2,031,261
    Sales of foreclosed real estate financed by mortgage loans             $    1,076,800       $     138,400
</TABLE>





See notes to consolidated financial statements.





                                       5
<PAGE>   6



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
LIBERTE INVESTORS AND SUBSIDIARY
DECEMBER 31, 1995

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.  In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.  Operating
results for the quarter ended and six months ended December 31, 1995, are not
necessarily indicative of the results that may be expected for the fiscal year
ending June 30, 1996. For further information, refer to the financial
statements and footnotes included in the Annual Report on Form 10-K of Liberte
Investors for the fiscal year ended June 30, 1995, as amended.

The accompanying financial statements include the accounts of Liberte Investors
and Liberte Corp., a wholly-owned subsidiary which is currently inactive.  All
intercompany balances and transactions have been eliminated.  As used herein,
the "Trust" refers to Liberte Investors and its subsidiary.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Adoption of Authoritative Statements:  Effective July 1, 1995, the Trust
adopted Statement of Financial Accounting Standards ("SFAS") No. 114,
"Accounting by Creditors for Impairment of a Loan," as amended by SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures."  SFAS No. 114 requires that the impaired value of a loan be based
on either (i) the present value of expected future cash flows discounted at the
loan's effective interest rate, or (ii) the fair value of the collateral if the
repayment of the loan is expected to be provided solely by the collateral.  The
adoption of the new statement did not have a material effect on the Trust's
financial condition, results of operations, or cash flows.

At December 31, 1995, the Trust had one impaired loan with a carrying value of
$212,579 and nine  impaired loans, from prior foreclosure related deficiency
judgments, with no carrying value.  There is no allowance allocated to these
assets.  Income from impaired loans is recorded on a cash basis, and during the
quarter ended December 31, 1995, totaled $204,980.  During the quarter ended
December 31, 1995, the average month-end recorded investment in impaired loans
was $212,579.

Effective July 1, 1995, the Trust adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The statement requires that assets held for disposal be carried at the lower of
their carrying amount or fair value less cost to sell.  The adoption of the new
statement did not have a material effect on the Trust's financial condition,
results of operations, or cash flows, as foreclosed real estate was previously
carried at fair value less estimated cost to sell.  The balance sheet effect of
adopting SFAS No. 121 was the netting of allocated reserves against the related
foreclosed real estate.  Restatement of previously issued financial statements
to comply with SFAS No. 121 is neither permitted nor required.

At December 31, 1995, the Trust held assets to be disposed of consisting of
foreclosed real estate in the form of land and developed single-family lots.
The December 31, 1995, carrying amount of these assets was $3,775,084.

The single family lots are being sold on a quarterly basis and are expected to
be completely liquidated by the end of fiscal 1997.  The carrying amount of
these lots was $919,709 at December 31, 1995.





                                       6
<PAGE>   7




The balance of the Trust's foreclosed real estate consists of 14 parcels of
land totaling approximately 608 acres in San Antonio, Texas.  Certain parcels
are under contract for sale and the balance are being marketed for sale at
prices comparable to similar assets in the San Antonio area.  The Trust expects
to liquidate these parcels on a quarterly basis over the next two fiscal years.

Reclassifications:  Certain amounts in previously issued financial statements
have been reclassified to conform to the December 31, 1995, presentation.

NOTE C - COMMITMENTS AND CONTINGENCIES

At December 31, 1995, the Trust had commitments for indemnification of
development bond issuers and other guarantees totaling $109,045.

Cash and cash equivalents at December 31, 1995, included restricted cash of
$58,928 for unpaid claims related to the Trust's previous bankruptcy.  At June
30, 1995, restricted cash included $59,245 for such claims.

The Trust is involved in routine litigation incidental to its business, which,
in the opinion of management, will not result in a material adverse impact on
the Trust's financial condition, results of operations, or cash flows.

NOTE D - SHARE TRANSFER RESTRICTIONS

In order to avoid limitations on the use of the Trust's tax attributes, the
Declaration of Trust as amended, generally prohibits the transfer of Shares to
any Person who is, or would become, a holder of 5% or more of the Shares, and
prohibits any transfer of Shares if, as a result of the transfer, any Person
would become a holder of 5% or more of the Shares or increase a 5% or more
ownership position, in each case after giving effect to the transfer, directly
or by attribution.  "Person" for this purpose is defined broadly to mean any
individual, corporation, estate, debtor, association, company, partnership,
joint venture or similar organization.

If a transfer violates this prohibition, either (i) the Shares that were
purported to be transferred in excess of the 5% limit will be deemed to remain
the property of the initial transferor, or (ii) upon election by the Trust,
such Shares shall be transferred to an agent designated by the Trust, who will
sell them in an arm's-length transaction, the proceeds of such sale to be
allocated to the purported transferee up to (x) the amount paid by such
transferee for such Shares and (y) where the purported transfer was by gift
inheritance or any similar transfer, the fair market value of such Shares at
the time of the purported transfer.

If the purported transferee has resold the Shares to an unrelated party in an
arm's length transaction, the purported transferee will be deemed to have sold
the Shares as an agent for the initial transferor, and will be required to
transfer the proceeds of such sale to the agent designated by the Trust, except
to the extent that the agent grants written permission to the purported
transferee to retain a portion of the proceeds up to the amount that would have
been payable to such transferee had the Shares been sold by the agent rather
than by the purported transferee.

The Declaration of Trust further provides that the Trust may require, as a
condition to the registration of the transfer of any Shares, that the proposed
transferee furnish to the Trust all information reasonably requested by the
Trust with respect to the proposed transferee's direct or indirect ownership
interests in Shares.





                                       7
<PAGE>   8




The Board of Trustees of the Trust will have the power to approve transfers
that would otherwise be prohibited under the foregoing provisions.

New certificates evidencing ownership of Shares bear a conspicuous legend
referencing the transfer restrictions and are held by the Trust's transfer
agent for replacement of old certificates when submitted for transfer.

NOTE E - SUBSEQUENT EVENT

On January 16, 1996, the Trust entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement") with Hunter's Glen/Ford, Ltd., a Texas limited
partnership ("Hunter's Glen"), pursuant to which the Trust agreed to sell
7,137,863 newly issued shares to Hunter's Glen for $20,342,910 ($2.85 per
share).  Under certain circumstances, Hunter's Glen will purchase an additional
964,576 newly issued shares at $2.85 per share for an additional $2,749,041.
After the sale, Hunter's Glen would own 37% or 40% of the outstanding shares.
The partners of Hunter's Glen are Gerald J. Ford and certain family interests.
Hunter's Glen has made a down-payment of $2,000,000, to be held in escrow
pending the closing.

The Trust has received a written opinion from Bear Stearns & Co. Inc. that the
proposed sale is fair, from a financial point of view, to the Trust's public
shareholders.

Prior to the sale of the shares pursuant to the Stock Purchase Agreement, the
Trust will reorganize into a Delaware corporation that will succeed to all of
the Trust's assets and liabilities.  The offering of shares of the common stock
of this Delaware corporation in connection with the reorganization of the Trust
will be made only by means of a prospectus transmitted to the Trust's
shareholders.  Upon such reorganization, shareholders of the Trust will
automatically become shareholders of the Delaware corporation on a share for
share basis.

Consummation of the transactions contemplated by the Stock Purchase Agreement
is subject to a number of conditions, including the reorganization of the Trust
into the Delaware corporation.  Accordingly, Hunter's Glen would actually
purchase shares of common stock from the Delaware corporation, rather than
shares of beneficial interest from the Trust.  In addition, the reorganization
of the Trust and the sale of the shares are subject to the approval of the
Trust's shareholders.

At the closing, Mr. Ford will become the Chief Executive Officer of the
Delaware corporation.  The corporation's board of directors will consist of
five directors, the Trust's three trustees, Mr. Ford, and another designee of
Hunter's Glen.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

Operations resulted in net income of $576,000 for the quarter ended December
31, 1995, compared to a net loss of $1,309,000 for the same period in fiscal
1995.  Operations for the six months ended December 31, 1995, resulted in net
income of $547,000 compared to a net loss of $1,837,000 for the same period in
fiscal 1995.  The substantial change in operating results for both the quarter
and six months were due to various factors discussed below, the largest factor
being no provision for possible losses was taken in the quarter or six months
ended December 31, 1995, as compared to $1,682,000 and $2,192,000 for the
quarter and six months ended December 31, 1994, respectively.





                                       8
<PAGE>   9




Notes receivable interest income decreased to $130,000 in the second quarter of
fiscal 1996 from $156,000 in the second quarter of fiscal 1995.  The decrease
was the result of a lower average outstanding balance of earning notes,
partially offset by an increase in yield.  Average earning notes decreased to
$5.9 million with a yield of 8.45% in the second quarter of fiscal 1996 from
$7.4 million with a yield of 7.84% in the second quarter of fiscal 1995.

Notes receivable interest income decreased to $251,000 for the first six months
of fiscal 1996 from $400,000 for the first six months of fiscal 1995.  The
decrease was the result of a lower average outstanding balance of earning
notes, partially offset by an increase in yield.  Average earning notes
decreased to $5.6 million with a yield of 8.48% for the first six months of
fiscal 1996 from $9.6 million with a yield of 8.08% for the first six months of
fiscal 1995.  The reduction in average earning notes is primarily a result of
the foreclosure of a $4.8 million note receivable (the underlying collateral
has since been disposed of for cash), and repayments of indebtedness by
borrowers, partially offset by the addition of an earning note from the sale of
real estate.

Average nonearning notes for the second quarter of fiscal 1996 totaled $213,000
compared to $103,000 for the same period in fiscal 1995.  Assuming the yield on
these notes would have been the same as the yield on earning notes had they
been on earning status, interest income would have been $4,500 higher in the
second quarter of fiscal 1996 and $2,000 higher in the second quarter of fiscal
1995.

Average nonearning notes for the first six months of fiscal 1996 totaled
$249,000 compared to $185,000 for the same period in fiscal 1995.  Assuming the
yield on these notes would have been the same as the yield on earning notes had
they been on earning status, interest income would have been $10,500 higher in
the first six months of fiscal 1996 and $7,500 higher in the first six months
of fiscal 1995.

Investment interest income increased to $307,000 in the second quarter of
fiscal 1996 from $168,000 in the second quarter of fiscal 1995.  This is
primarily due to an increase in the daily average balance of unrestricted cash
and cash equivalents to $21.3 million for the second quarter of fiscal 1996,
from $13.1 million for the second quarter of fiscal 1995.  The increase in
unrestricted cash and cash equivalents is primarily a result of the sale of
foreclosed real estate and collections on notes receivable.

Investment interest income increased to $611,000 for the first six months of
fiscal 1996 from $283,000 for the first six months of fiscal 1995.  This is
primarily due to an increase in the daily average balance of unrestricted cash
and cash equivalents to $21.0 million for the first six months of fiscal 1996,
from $11.8 million for the first six months of fiscal 1995.  The increase in
unrestricted cash and cash equivalents is primarily a result of the sale of
foreclosed real estate and collections on notes receivable.

The gain on dispositions of real estate represents proceeds received from the
sale of foreclosed real estate in excess of its carrying value.  The gain in
the second quarter of fiscal 1996 is primarily due to the sale of single family
lots located in Murrieta, California.  The Trust initially reduced the carrying
value of this California asset during the third quarter of fiscal 1995 after
failing to close on a sales contract, the sale price of which was negatively
affected by the increasing impact of fees levied by the municipality and
agencies of the State of California.  The Trust received an offer to purchase
these single family lots during the second quarter of fiscal 1996 and was able
to negotiate a sales price in excess of its carrying value.  The Trust accepted
a cash down payment and a note receivable (carrying a market rate of interest)
from the buyer of the lots.

Consulting and other income decreased in both the quarter ended and six months
ended December 31, 1995, as compared to the quarter ended and six months ended
December 31, 1994.  For the quarter ended and six months ended December 31,
1995, consulting and other income consists primarily of cash collections on
impaired loans, which had no carrying value, and dividends on the Trust's





                                       9
<PAGE>   10



investment in RPI Preferred Stock.  For the quarter and six months ended
December 31, 1994, consulting and other income consists primarily of consulting
fees paid by Resurgence Properties, Inc. ("RPI"), and the early buyout of the
consulting agreement between the Trust and RPI.

One new loan was produced during the quarter ended and six months ended
December 31, 1995, to facilitate the sale of foreclosed real estate.  The Trust
committed to fund one new loan totaling $686,000 during the six months ended
December 31, 1994, of which $166,000 had been advanced as of December 31, 1994.

No provision for possible losses was made in the quarter ended or six months
ended December 31, 1995, compared to a provision of $1.7 million in the quarter
ended, and $2.2 million for the six months ended, December 31, 1994.  The
allowance for possible losses was $92,000 at December 31, 1995, compared to
$10.5 million at June 30, 1995, and $11.9 million at December 31, 1994.  The
substantial reduction in the allowance is a result of applying such allowance
to the carrying value of foreclosed real estate upon the adoption of SFAS No.
121.  The Trust believes the allowance for possible losses is adequate at
December 31, 1995.  See NOTE B - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

The following is a summary of transactions affecting the Trust's allowance for
possible losses for the six months ended December 31, 1995.


<TABLE>
<CAPTION>
                                                                 Six Months Ended December 31, 1995         
                                                        ----------------------------------------------------
                                                            Mortgage         Foreclosed
                                                             Loans           Real Estate           Total   
                                                        -------------      --------------      ------------- 
<S>                                                     <C>                <C>                 <C>
Balance at July 1, 1995                                 $     129,901      $   10,369,021      $  10,498,922
Reclassifications - SFAS No. 121                                   --         (10,331,733)       (10,331,733)
Amounts charged off, net of recoveries                        (23,496)            (37,288)           (60,784)
                                                        -------------      --------------      ------------- 
Balance at September 30, 1995                                 106,405                  --            106,405

Provision for possible losses                                      --                  --                 --
Amounts charged off, net of recoveries                        (14,400)                 --            (14,400)
                                                        -------------      --------------      ------------- 
Balance at December 31, 1995                            $      92,005      $           --      $      92,005
                                                        =============      ==============      =============
</TABLE>

Salaries and related costs were reduced for the quarter ended and six months
ended December 31, 1995, as compared to the same periods in the prior year,
primarily as a result of a reduced compensation package for the Chief Executive
Officer affecting the last half of fiscal 1995 and the six months ended
December 31, 1995.

General and administrative costs increased slightly for the quarter ended and
six months ended December 31, 1995, as compared to the same periods in the
prior year.  This increase is primarily due to the fact that the Trust became a
self managed entity as of February 28, 1995, and therefore has general and
administrative expenses that, in the same period of fiscal 1995, were the
responsibility of the manager of the Trust.  The increase in general and
administrative costs is offset by the elimination of management fees paid
during fiscal 1995.

Legal, audit, and advisory expenses increased for the quarter ended and six
months ended December 31, 1995, as compared to the same periods in the prior
year, mainly due to activities related to potential acquisition candidates.





                                       10
<PAGE>   11




Foreclosed real estate expenses decreased for both the quarter ended and six
months ended December 31, 1995, as compared to the same periods in the prior
year.  This was due to a reduction in the size of the real estate portfolio,
including the elimination of operating real estate properties during fiscal
1995.

Management fees were eliminated in the first quarter of fiscal 1996 due to the
termination of the Management Agreement with Lomas Management in February 1995.
The Trust is currently self managed.

Trustee fees and expenses increased for the quarter ended and six months ended
December 31, 1995, as compared to the same periods in the prior year.  This is
primarily due to a higher than normal number of Trustee meetings regarding
potential acquisition candidates and other strategic opportunities.

LIQUIDITY AND CAPITAL RESOURCES

The Trust is currently debt free.  Its principal funding requirements are
operating expenses, including legal, audit, and advisory expenses expected to
be incurred in connection with evaluating potential acquisition candidates and
other strategic opportunities.  The Trust's primary sources of funding
operating expenses are collections on notes receivable, proceeds from the sale
of foreclosed real estate, and investment interest.

As described in the subsequent event note to the financial statements, the
Trust has entered into an agreement to sell shares to Hunter's Glen
constituting either 37% or 40% of the Trust's fully diluted shares immediately
after the sale.  The proceeds from this sale will be either $20.3 million or
$23.1 million.  This additional cash should permit the Trust to consider a
greater number of acquisition candidates.  In addition, Hunter's Glen is an
affiliate of Mr. Gerald J.  Ford, who the Trust anticipates will become the
Chief Executive Officer of the Trust following the closing and the Trust's
reorganization into a Delaware corporation.  Mr. Ford has considerable
experience in the acquisition of various companies, specifically in the
financial services industry.  Mr. Ford's involvement with the Trust could
therefore facilitate the Trust's acquisition of another company.  See NOTE E -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

MATERIAL CHANGES IN FINANCIAL CONDITION

The adoption of certain authoritative accounting statements during the first
quarter of fiscal 1996 resulted in a netting of substantially all of the
Trust's allowance for possible losses on its foreclosed real estate against the
previously reported gross carrying value.  See NOTE B - NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.

SHARE TRANSFER RESTRICTIONS

In order to avoid limitations on the use of the Trust's tax attributes, the
Declaration of Trust as amended generally prohibits the transfer of Shares to
any Person who is, or would become, a holder of 5% or more of the Shares, and
prohibits any transfer of Shares if, as a result of the transfer, any Person
would become a holder of 5% or more of the Shares or increase a 5% or more
ownership position, in each case after giving effect to the transfer, directly
or by attribution.  "Person" for this purpose is defined broadly to mean any
individual, corporation, estate, debtor, association, company, partnership,
joint venture or similar organization.  SEE NOTE D - NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.





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<PAGE>   12



                          PART II.  OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES

The Sixth Amendment to the Declaration of Trust, dated November 22, 1995,
amends the share transfer restrictions.  The amendment modified certain
definitions used in the share transfer restrictions to update and to more
accurately reflect the federal income tax regulations that govern the
limitations on the use of tax attributes which the share transfer restrictions
are designed to avoid.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits:
   

        3.1         Declaration of Trust, restated to give effect to the First,
                    Second, Third, Fourth, Fifth, and Sixth Amendments to the
                    Declaration of Trust.
   

        27.1        Financial Data Schedules (submitted to the SEC for its
                    information).
   

(b)     Reports on Form 8-K:
   

        None.





                                       12
<PAGE>   13



                                  SIGNATURES

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 thereunder duly authorized.


                              LIBERTE INVESTORS



Date:    February 13, 1996         By:    /s/ TED ENLOE
      -----------------------         ------------------------------------------
                                          Ted Enloe
                                          President and Chief Executive Officer


Date:    February 13, 1996         By:    /s/ BRADLEY S. BUTTERMORE
      -----------------------         ------------------------------------------
                                          Bradley S. Buttermore
                                          Principal Accounting and Financial 
                                          Officer





                                       13
<PAGE>   14



                               LIBERTE INVESTORS

                               INDEX TO EXHIBITS




Exhibit No.
-----------

    3.1                Declaration of Trust, restated to give effect to the
                       First, Second, Third, Fourth, Fifth, and Sixth
                       Amendments to the Declaration of Trust.

    27.1               Financial Data Schedules (submitted to the SEC for its
                       information).





                                       14