<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 0-20677
FIRSTCITY LIQUIDATING TRUST
(Exact name of registrant as specified in its charter)
Texas 06-6414468
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1001 Fannin, Suite 505, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 651-7841
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class B Beneficial Interests
Class C Beneficial Interests
(Title of Each Class)
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of January 31, 2000 there were 2,460,911 units of Class B Beneficial
Interests and 738,273 units of Class C Beneficial Interests outstanding.
Documents incorporated by reference: None
<PAGE> 2
Part I
Item 1. Business.
On July 3, 1995 (the "Effective Date"), the FirstCity Liquidating
Trust (the "Trust") and certain other entities were established pursuant to and
upon consummation of the Joint Plan of Reorganization, dated December 23, 1994,
by First City Bancorporation of Texas, Inc., a Delaware corporation (the
"Debtor"), Official Committee of Equity Security Holders (the "Equity
Committee"), and J-Hawk Corporation ("J-Hawk"), with the participation of
Cargill Financial Services Corporation, under Chapter 11 of Title 11 of the U.S.
Code (the "Bankruptcy Code"), Case No. 392-39474-HCA-11 (the "Plan"). The Plan
was confirmed by order of the U.S. Bankruptcy Court for the Northern District of
Texas, Dallas Division (the "Bankruptcy Court") entered on May 31, 1995.
The Debtor was formed as a multi-bank holding company in 1988 for
the purpose of reorganizing First City Bancorporation of Texas, Inc., a Texas
corporation. Beginning in the summer of 1990, the financial condition of the
Debtor began to deteriorate and worsened progressively throughout 1990 and 1991.
On October 30, 1992, regulatory agencies closed the Debtor's banks. On October
31, 1992, certain of the Debtor's unsecured creditors filed an involuntary
Chapter 11 bankruptcy petition against the Debtor in the Bankruptcy Court. On
November 23, 1992, the Debtor consented to the entry of an order for relief
against it under Chapter 11 of the Bankruptcy Code. Until July 3, 1995, the
Debtor operated its remaining businesses and managed its property as
debtor-in-possession.
The Plan was confirmed by the Bankruptcy Court by an order
entered on May 31, 1995, and became effective on July 3, 1995. Pursuant to the
Plan and an Agreement and Plan of Merger between the Debtor and J-Hawk, on July
3, 1995, J-Hawk was merged (the "Merger") with and into the Debtor, with the
Debtor as the surviving entity. Pursuant to the Merger, (i) the former holders
of common stock of J-Hawk received, in the aggregate, approximately 49.9% of the
outstanding common stock of the surviving entity, in exchange for their shares
of J-Hawk common stock, (ii) approximately 50.1% of the outstanding common stock
of the surviving entity was distributed among former security holders of the
Debtor pursuant to the Plan and (iii) the name of the corporation was changed to
FirstCity Financial Corporation ("FirstCity").
The Trust has not and, pursuant to the Liquidating Trust
Agreement dated as of July 3, 1995, by and between First City Bancorporation of
Texas, Inc. and State Street Bank and Trust Company, successor to Fleet National
Bank and Shawmut Bank Connecticut, National Association, as Trustee (the "Trust
Agreement"), may not engage in the conduct of a trade or business apart from the
liquidation of Trust assets and the winding up of the affairs of the Debtor and
its subsidiaries. Pursuant to Article VIII of the Trust Agreement, the Trust
shall terminate upon the date which is three (3) years and six (6) months after
the Effective Date; provided, however, that at least six (6) months prior to
such termination, the Portfolio Committee (as defined herein) may, with the
approval of the Bankruptcy Court, extend the term of the Trust if necessary to
the liquidating purpose thereof. Multiple extensions, if approved by the
Bankruptcy Court, are permissible, although the aggregate of all such extensions
shall not exceed five (5) years so that, in any event, the Trust
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shall terminate no later than eight (8) years and six (6) months after the
Effective Date. In June 1998, the Bankruptcy Court extended the life of the
Trust from December 31, 1998 to January 3, 2000. In June 1999, the Bankruptcy
Court extended the life of the Trust to January 3, 2002.
Pursuant to the Plan, substantially all of the legal and
beneficial interest in the assets of the Debtor, other than $20 million in cash
which was contributed by the Debtor to FirstCity, were transferred to the Trust
or to subsidiaries of the Trust. Such assets have been and will continue to be
liquidated over the life of the Trust pursuant to the terms of the Plan and the
Trust Agreement. The non-cash assets of the Trust consist principally of
performing and non-performing loans, income producing real estate and interests
in real estate, and miscellaneous other assets and receivables transferred to
the Trust upon the consummation of the Plan.
In connection with the sale of the Debtor's banks by the Federal
Deposit Insurance Corporation (the "FDIC") to certain other banks (the
"Loss-Sharing Banks"), the FDIC entered into certain agreements (the
"Loss-Sharing Agreements") to guarantee certain recoveries on loans acquired by
the Loss-Sharing Banks. On July 12, 1995, in order to reduce the uncertain
effect of the Loss-Sharing Agreements on future distributions to the Trust by
the FDIC, subsidiaries of the Trust purchased assets for approximately $206
million from the Loss-Sharing Banks (the "Loss-Sharing Settlement"). With the
purchase of these assets, the Loss-Sharing Banks released the FDIC from its
future obligations under the Loss-Sharing Agreements. The Loss-Sharing
Settlement was significant to the Trust because it allowed the FDIC to eliminate
the loss-sharing reserve that it had maintained to cover the FDIC's obligations
under the loss-sharing guarantees, thereby eliminating the uncertainty of future
reductions from the reserve and increasing the initial distribution made by the
FDIC to the Trust.
In 1996, the FDIC closed the Receiverships of the Debtor's banks
(the "Receiverships") and distributed the surplus cash ($17.6 million on
December 23, 1996) of the Receiverships to the Trust. In accordance with that
certain Conveyance and Indemnification Agreement (the "Conveyance and
Indemnification Agreement"), dated December 23, 1996 and extended in April 1999,
the Trust will be required, among other things, to provide indemnity to the FDIC
against any known or unknown liabilities, obligations or actual expenses
associated with the Receiverships, in an aggregate amount up to $10 million
until the termination of the Trust.
Item 2. Properties.
The Trust does not have any material physical properties, except
for such properties that are held for sale.
Item 3. Legal Proceedings.
Litigation was settled related to a previous attempt to sell a
67% interest in a partnership which owns the First City Tower. See Item 7
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".
2
<PAGE> 4
The Trust is involved in various legal proceedings in the
ordinary course of business. In the opinion of management of the Trust, the
resolution of such matters should not have a material adverse impact on the
financial position, results of operations or liquidity of the Trust.
Item 4. Submission of Matters to a Vote of Security Holders.
As the Trust has no outstanding voting securities, no matters
were submitted to a vote of security holders during the fourth quarter ended
December 31, 1999.
Part II
Item 5. Market For Registrant's Common Equity and Related Stockholder
Matters.
The Class A Certificate was held by FirstCity. Through December
31, 1997, the Trust had distributed $188 million to FirstCity as the sole Class
A Certificate holder, retiring the Class A Certificate in full.
The Class B Beneficial Interests (traded under the symbol
"FCFCL") and Class C Beneficial Interests (traded under the symbol "FCFCZ") have
been traded over the counter since July 3, 1995. The number of Class B
Certificate holders and Class C Certificate holders of record as of December 31,
1999, was 60 and 778, respectively. High and low bid prices, as compiled by
Bloomberg Financial Markets Services, an online service, are displayed in the
following tables:
<TABLE>
<CAPTION>
Class B Beneficial Interest
-----------------------------------------------------------------------
1999 1998
------------------------------------ ------------------------------------
Market Price Market Price
--------------- Cash Distributions --------------- Cash Distributions
Quarter Ended High Low Paid High Low Paid
- ------------- ------ ------ ------------------ ------ ------ ------------------
<S> <C> <C> <C> <C> <C> <C>
March 31 ....... $26.25 $24.00 $ 3.50 $35.50 $33.50 $ 7.00
June 30 ........ 26.50 21.75 4.00 31.75 29.25 11.50
September 30 ... 23.00 21.50 2.00 32.00 23.75 7.00
December 31 .... 21.75 21.75 -- 26.00 23.00 2.00
</TABLE>
<TABLE>
<CAPTION>
Class C Beneficial Interest
-----------------------------------------
1999 1998
------------------- -------------------
Market Price Market Price
------------------- -------------------
Quarter Ended High Low High Low
- ------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
March 31 ....... -- -- -- --
June 30 ........ -- -- -- --
September 30 ... -- -- -- --
December 31 .... $ .09 $ .09 -- --
</TABLE>
No distributions were made to Class B or Class C Certificate
holders through December 31, 1997. In 1998, $67.7 million, or $27.50 per Class B
Certificate, was distributed to Class B Certificate holders. In 1999, $23.4
million, or $9.50 per Class B Certificate, was distributed to Class B
Certificate holders. In January 2000, $2.5 million, or $1.00 per Class B
Certificate, was distributed.
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The Trust is required to apply all proceeds from liquidation and
disposition of its assets first to the payment of normal operating expenses.
Second, Trust proceeds totaling $188 million were distributed to FirstCity to
retire the Class A Certificate in December 1997. The third order of distribution
of Trust proceeds is payments pursuant to employment and bonus agreements with
certain former employees of the Debtor. The bonus pool and executive long-term
incentive plan provides for the payment of bonuses equal to 4.76% of additional
distributions to Class B Certificate holders and (if any) Class C Certificate
holders.
Fourth, Class B Certificate holders are entitled to distributions
up to the Pour-Over Level. The Pour-Over Level (approximately $58 million at
December 31, 1999) is the liquidation preference on July 3, 1995 of the Debtor's
Series B and Series E preferred stock, less the nominal stated value of
FirstCity special preferred stock and the book value of FirstCity common stock
issued to the Series B and Series E holders, plus interest at an annual rate of
6.5% from July 3, 1995. The Pour-Over Level is also reduced for distributions to
Class B Certificate holders.
Lastly, Class C Certificate holders receive distributions (if
any) after any remaining payments to Class B Certificate holders up to the
Pour-Over Level (approximately $23.49 per unit as of December 31, 1999).
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------- Inception to
(Dollars in thousands) 1999 1998 1997 1996 December 31,1995
-------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C>
Income ............................................... $ 24,323 $ 38,534 $ 45,079 $ 53,014 $ 33,923
Expenses ............................................. 3,844 6,859 12,427 13,249 10,293
Net income ........................................... 20,479 31,675 32,652 39,765 23,630
Distributions on Class "A" Certificate ............... -- -- 62,669 120,229 4,721
Distributions on Class "B" Certificate ............... 23,379 67,675 -- -- --
At year end:
Total assets ................................ 54,421 57,489 93,963 125,229 206,464
Class "A" Certificate ....................... -- -- -- 53,617 162,245
Class "B" Certificate ....................... 52,400 55,300 91,300 67,700 39,536
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The operations of the Trust are summarized below:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
(Dollars in thousands) 1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Changes in fair value of trust assets ............... $ 24,036 $ 37,883 $ 44,127
Interest income on short-term investments ........... 287 651 952
Interest expense .................................... -- -- (155)
Administrative expense .............................. (3,844) (6,859) (12,272)
-------- -------- --------
Net income ................................. $ 20,479 $ 31,675 $ 32,652
======== ======== ========
</TABLE>
4
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1999 COMPARED TO 1998
The estimated fair value of the Trust's assets increased $24.0
million in 1999 as compared to $37.9 million in 1998. The 1999 increase was
attributable to several factors, including $18 million related to a 67% interest
in a partnership which owns the First City Tower. Other factors which
contributed to the enhancement of the net asset value of the Trust's assets in
1999 include (i) the appreciation in value of certain assets attributable to a
favorable interest rate environment and the effect of such favorable interest
rates on the marketability of real estate and (ii) the increase in the estimated
market value of the Trust's assets that naturally occurs as the remaining life
of the Trust (and concomitantly the discount factor applied in calculating net
asset value) decreases.
Interest income on short-term investments decreased in 1999 as
compared to 1998 because less excess funds were available.
Administrative expense totaled $3.8 million in 1999 as compared
to $6.9 million in 1998. A $1.1 million bonus, based on distributions to Class B
Certificate holders, was paid to certain former employees of the Debtor in 1999
as compared to a $2.6 million bonus paid to such employees in 1998. Professional
fees totaled $.7 million in 1999 as compared to $1.1 million in 1998.
In 1999, the Trust distributed $23.4 million, or $9.50 per
Certificate, to Class B Certificate holders. This distribution was made possible
principally by $18.8 million in net collections on Trust assets in 1999 and cash
held at December 31, 1998. The Class B Beneficial Interests were valued at $52.4
million at December 31, 1999. In January 2000, $2.5 million, or $1.00 per
Certificate, was distributed to Class B Certificate holders.
Non-cash Trust assets at December 31, 1999 and 1998 were
comprised of the following:
<TABLE>
<CAPTION>
(Dollars in thousands) December 31,
--------------------
Estimated Gross Cash Flow by Type of Asset 1999 1998
- ------------------------------------------ -------- --------
<S> <C> <C>
Borrowers' obligation on outstanding balance of:
Performing loans ............................... $ 5,327 $ 12,306
Nonperforming loans ............................ 209 815
Receivable from the FDIC ........................... -- 2,000
Real estate and other assets ....................... 49,557 36,556
-------- --------
Total .......................................... 55,093 51,677
-------- --------
Discount required to reflect trust assets at
estimated fair value ............................. (5,943) (7,662)
-------- --------
Trust assets, net .................................. $ 49,150 $ 44,015
======== ========
</TABLE>
For each asset, estimates of income, expense and net cash flow on
a monthly basis through the expected final disposition date are prepared by
management of the Trust. The individual asset budget is developed based upon
factors which include physical inspection of the asset or the collateral
underlying the related loan, local market conditions, contractual payments or
rents, and
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discussions with the relevant borrower. The Trust's management periodically
re-evaluates and revises its projected monthly cash flows on an asset-by-asset
basis. At December 31,1999 and 1998, the projected monthly cash flows were
discounted at 11% to reflect the Trust assets at estimated fair value.
The December 31, 1999 statement of net assets in liquidation
reflects a value of $45 million for a 67% interest in a partnership which owns
the First City Tower. The First City Tower is a Class A office building located
in downtown Houston. The Tower has approximately 1.3 million rentable square
feet which is more than 99% leased, a 2,000-car covered parking garage, and a
$90 million mortgage. The increase in valuation from $27.5 million at September
30, 1999 reflects the settlement of litigation on the building and an increase
in the value of downtown Houston real estate. The settlement of the litigation
clears the way for the partnership interest to be marketed, and such efforts
will begin in the first quarter of 2000. The ultimate value of the partnership
interest is unknown at this time. Using the current valuation of the Trust
assets, the partnership interest in the Tower would have to be sold for an
amount in excess of approximately $50 million for the Class B Certificates to be
paid in full, and for the excess, or "pour over" to attribute to the Class C
Certificates. While it is possible for the Class C Certificates to have some
value in the future, the amount, if any, is not known at this time. Investors
are advised, however, that the Class C Certificates are highly speculative
securities.
In June 1999, the Bankruptcy Court extended the life of the Trust
from January 3, 2000 to January 3, 2002. The extension allows the Trust more
time to settle ongoing litigation and indemnity issues as well as to bring
additional value to certain assets as a result of holding such assets for a
longer period of time.
In the first quarter of 1998, the Trust negotiated and received a
settlement of approximately $22 million from its fidelity bond carriers. As a
result of this settlement, there are no remaining claims of this nature.
1998 COMPARED TO 1997
The estimated fair value of the Trust's assets increased $37.9
million in 1998 as compared to $44.1 million in 1997. The 1998 increase is
attributable to several factors, including a settlement of approximately $22
million from the Trust's fidelity bond carriers and $7 million related to a 67%
interest in a partnership which owns the First City Tower. Other factors which
contributed to the enhancement of the net asset value of the Trust's assets in
1998 include (i) the appreciation in value of certain assets attributable to a
favorable interest rate environment and the effect of such favorable interest
rates on the marketability of real estate and (ii) the increase in the estimated
market value of the Trust's assets that naturally occurs as the remaining life
of the Trust (and concomitantly the discount factor applied in calculating net
asset value) decreases.
Interest income on short-term investments decreased in 1998 as
compared to 1997 because less excess funds were available. Interest expense in
1997 resulted from the termination of a servicing agreement between the Trust
and FirstCity (the "Investment Management Agreement"), as discussed below.
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Administrative expense totaled $6.9 million in 1998 as compared
to $12.3 million in 1997. In the first quarter of 1997, the Investment
Management Agreement was terminated and, in consideration of this termination,
the Trust paid FirstCity $6.8 million, plus interest at a rate of 10 percent per
annum from January 1, 1997 until March 1997 (resulting in no servicing fees in
1998). A $2.6 million bonus, based on distributions to Class B Certificate
holders, was paid in 1998 to certain former employees of the Debtor (there was
no such bonus paid in 1997). Professional fees totaled $1.1 million in 1998 as
compared to $2.1 million in 1997.
In 1998, the Trust distributed $67.7 million, or $27.50 per
Certificate, to Class B Certificate holders. This distribution was made possible
principally by $79.8 million in net collections on Trust assets in 1998.
In 1996, the FDIC closed the Receiverships of the Debtor's banks
and distributed the surplus cash of those Receiverships to the Trust. In
accordance with the Conveyance and Indemnification Agreement, the Trust will be
required, among other things, to provide indemnity to the FDIC against any known
or unknown liabilities, obligations or actual expenses associated with the
Receiverships, in an aggregate amount up to $10 million until the termination of
the Trust.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The Trust does not engage in trading market risk sensitive
instruments and does not purchase as investments, as hedges, or for purposes
"other than trading" instruments that are likely to expose the Trust to market
risk, whether it be from interest rate, foreign currency exchange, commodity
price or equity price risk. The Trust has issued no debt instruments, entered
into no forward or futures contracts, purchased no options and entered into no
swaps.
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Item 8. Financial Statements and Supplementary Data.
FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1999 1998
------- -------
<S> <C> <C>
Assets, at estimated fair value
Cash and cash equivalents ................................. $ 5,271 $13,474
Trust assets, net ......................................... 49,150 44,015
------- -------
Total assets ....................................... 54,421 57,489
------- -------
Less liabilities at face or estimated amount
Payables and accrued liabilities .......................... 2,021 2,189
------- -------
Total liabilities .................................. 2,021 2,189
------- -------
Commitments and contingencies ............................. -- --
Trust net asset value attributable to:
Class "B" Certificate, 2,460,911 units outstanding ........ 52,400 55,300
Class "C" Certificate, 738,273 units outstanding .......... -- --
------- -------
Total net asset value .............................. $52,400 $55,300
======= =======
</TABLE>
CONSOLIDATED STATEMENTS OF INCOME AND
CHANGES IN NET ASSET VALUE IN LIQUIDATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Changes in fair value of trust assets ...... $ 24,036 $ 37,883 $ 44,127
Interest income on short-term investments .. 287 651 952
Interest expense ........................... -- -- (155)
Administrative expense ..................... (3,844) (6,859) (12,272)
--------- --------- ---------
Net income .......................... 20,479 31,675 32,652
--------- --------- ---------
Net asset value, beginning of period ....... 55,300 91,300 121,317
Distributions on Class "A" Certificate ..... -- -- (62,669)
Distributions on Class "B" Certificate ..... (23,379) (67,675) --
--------- --------- ---------
Net asset value, end of period ............. $ 52,400 $ 55,300 $ 91,300
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
8
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FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income ......................................... $ 20,479 $ 31,675 $ 32,652
Adjustments to reconcile net income to net cash
provided by operating activities:
Changes in fair value of trust assets ............ (24,036) (37,883) (44,127)
Collections on trust assets, net of advances ..... 18,787 79,820 58,551
Capital improvements on trust assets ............. -- -- (11,529)
Decrease in payables and accrued liabilities ..... (54) (411) (1,059)
-------- -------- --------
Net cash provided by operating activities .... 15,176 73,201 34,488
-------- -------- --------
Cash flows from financing activities:
Distributions on Class "A" Certificate ............. -- -- (62,669)
Distributions on Class "B" Certificate ............. (23,379) (67,675) --
-------- -------- --------
Net cash used in financing activities ........ (23,379) (67,675) (62,669)
-------- -------- --------
Net increase (decrease) in cash and cash equivalents $ (8,203) $ 5,526 $(28,181)
Cash and cash equivalents, beginning of period ..... 13,474 7,948 36,129
-------- -------- --------
Cash and cash equivalents, end of period ........... $ 5,271 $ 13,474 $ 7,948
======== ======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ..................................... $ -- $ -- $ 155
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1999, 1998 and 1997
(A) Summary of Significant Accounting Policies
(1) Description of Business
The Joint Plan of Reorganization by First City Bancorporation of Texas,
Inc. (the "Debtor"), Official Committee of Equity Security Holders, and
J-Hawk Corporation ("J-Hawk"), with the participation of Cargill Financial
Services Corporation, under Chapter 11 of the United States Bankruptcy
Code, Case No. 392-39474-HCA-11 (the "Plan of Reorganization"), was
confirmed by the Bankruptcy Court for the Northern District of Texas,
Dallas Division, by an order entered on May 31, 1995, and became effective
on July 3, 1995. Pursuant to the Plan of Reorganization, and an Agreement
and Plan of Merger between the Debtor and J-Hawk, on July 3, 1995, J-Hawk
was merged (the "Merger") with and into First City Bancorporation of Texas,
Inc., and the name of the corporation was changed to FirstCity Financial
Corporation ("FirstCity").
Pursuant to the Plan, substantially all of the legal and beneficial
interests in the assets of the Debtor, other than $20 million in cash
contributed to FirstCity, were transferred to FirstCity Liquidating Trust
(the "Trust"), or to subsidiaries of the Trust. Such assets will be
liquidated over the life of the Trust pursuant to the terms thereof.
FirstCity, as the sole holder of the Class A Certificate under the Trust,
received from the Trust amounts sufficient to retire the Class A
Certificate in December 1997. Additional distributions shall be paid to
certain of the former security holders of the Debtor pursuant to the terms
of the Class B and the Class C certificates of beneficial interests in the
Trust. The Trust is administered by a four-person portfolio committee (the
"Portfolio Committee"). The net assets of the Debtor transferred to the
Trust on July 3, 1995, consisted of the following (dollars in thousands):
<TABLE>
<S> <C>
Cash and cash equivalents ................... $ 135,360
Trust assets ................................ 61,514
Estimated claims and accrued liabilities .... (14,002)
---------
$ 182,872
</TABLE>
In connection with the sale of the Debtor's banks by the FDIC to
third-party acquirers (the "Loss-Sharing Banks"), the FDIC guaranteed
certain recoveries on loans acquired by the Loss-Sharing Banks. (These
agreements are referred to as "Loss-Sharing Agreements".) On July 12, 1995,
in order to reduce the uncertain effect of the Loss-Sharing Agreements on
future distributions to the Trust by the FDIC, subsidiaries of the Trust
purchased assets (the "Loss-Sharing Settlement") for approximately $206
million from the Loss-Sharing Banks. With the purchase of these assets, the
Loss-Sharing Banks released the FDIC from its future obligations under the
Loss-Sharing Agreements.
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FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(continued)
(2) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
FirstCity Liquidating Trust and its subsidiaries (collectively referred to
as the "Trust"). All significant intercompany transactions and balances
have been eliminated in consolidation. Certain amounts in the financial
statements for prior periods have been reclassified to conform with current
financial statement presentation.
(3) Cash Equivalents
For purposes of the consolidated statements of cash flows, the Trust
considers all highly liquid debt instruments with original maturities of
three months or less to be cash equivalents. At December 31, 1999 and 1998,
substantially all cash balances were in excess of federally insured limits.
In accordance with the Liquidating Trust Agreement, all cash balances are
maintained at institutions with at least $100 million of capital stock and
surplus and whose short-term debt obligations are rated by at least two
nationally recognized rating agencies in one of the two highest categories.
(4) Trust Assets
The net assets of the Trust are carried at estimated fair values which are
the results of discounting, at appropriate discount rates, the currently
estimated cash flows projected to be realized from the collection,
liquidation and disposition of the non-cash assets held by the Trust. Such
assets consist principally of performing and non-performing loans, income
producing real estate and interests in real estate, and miscellaneous other
assets and receivables transferred to the Trust upon the consummation of
the Plan of Reorganization. The estimates of the future cash flows from
which the net asset values of the Trust were derived are made under the
direction of the management of the Trust and the Portfolio Committee based
upon information available and are believed to be reliable. There can be no
assurance, however, that the estimates resulting from such reviews or the
net asset values derived from such estimates will ultimately be realized
due to the highly judgmental assumptions which were made in developing
estimates of the amount and timing of future cash flows to be realized upon
the liquidation of the types of assets such as those held by the Trust.
The December 31, 1999 consolidated statement of net assets in liquidation
reflects a value of $45 million for a 67% interest in a partnership which
owns the First City Tower. The First City Tower is a Class A office
building located in downtown Houston. The increase in
11
<PAGE> 13
FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(continued)
valuation from $27.5 million at September 30, 1999 reflects the settlement
of litigation on the building and an increase in the value of downtown
Houston real estate. The settlement of the litigation clears the way for
the partnership interest to be marketed, and such efforts will begin in the
first quarter of 2000. The ultimate value of the partnership interest is
unknown at this time.
In the first quarter of 1998, the Trust negotiated and received a
settlement of approximately $22 million from its fidelity bond carriers. As
a result of this settlement, there are no remaining claims of this nature.
Trust assets are revalued at least quarterly and adjustments to estimated
fair values are included in operating results in the period in which they
become known. Loans are considered performing if debt service payments are
made in accordance with the original or restructured terms of the notes.
Interest on loans is recognized as part of the proceeds from disposition of
trust assets. Impairment of loans is measured based on the present value of
the expected future cash flows discounted at the loan's effective interest
rate, or the fair value of the collateral, less estimated selling costs, if
the loan is collateral dependent and foreclosure is probable.
Foreclosed assets acquired in settlement of notes are recorded at estimated
fair value. Costs relating to the development and improvement of property
and holding costs are considered in the development of estimated fair
values.
(5) Income Taxes
Under current federal and state laws, the Trust shall be treated as a
grantor trust owned by the beneficiaries holding beneficial interest
therein. For tax purposes, any item of income or loss is allocated among
the certificate holders. Therefore, no provision has been made for income
taxes in the accompanying consolidated financial statements.
(6) Use of Estimates
Management of the Trust has made certain estimates and assumptions relating
to the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these consolidated financial statements
in conformity with generally accepted accounting principles. Actual results
could differ from those estimates.
12
<PAGE> 14
FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(continued)
(B) Trust Assets
Trust assets are comprised of the following:
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
--------------------
Estimated Gross Cash Flow by Type of Asset 1999 1998
- ------------------------------------------ -------- --------
<S> <C> <C>
Borrowers' obligation on outstanding balance of:
Performing loans ............................... $ 5,327 $ 12,306
Nonperforming loans ............................ 209 815
Receivable from the FDIC ........................... -- 2,000
Real estate and other assets ....................... 49,557 36,556
-------- --------
Total .......................................... 55,093 51,677
-------- --------
Discount required to reflect trust assets at
estimated fair value ...................... (5,943) (7,662)
-------- --------
Trust assets, net .................................. $ 49,150 $ 44,015
======== ========
</TABLE>
For each asset, estimates of income, expense and net cash flow on a monthly
basis through the expected final disposition date are prepared. The
individual asset budget is developed based upon factors which include
physical inspection of the asset or the collateral underlying the related
loan, local market conditions, contractual payments or rents, and
discussions with the relevant borrower. The Trust's management and the
Portfolio Committee periodically reevaluate and revise projected monthly
cash flows on an asset by asset basis. At December 31, 1999 and 1998, the
projected monthly cash flows were discounted at 11% to reflect the Trust
assets at estimated fair value. The Trust assets are highly concentrated in
Texas.
(C) Distribution Priorities
The Trust is required to apply all proceeds from liquidation and
disposition of its assets first to payment of normal operating expenses.
Second, Trust proceeds totaling $188 million were distributed to FirstCity
to retire the Class A Certificate in December 1997. The third order of
distribution of Trust proceeds is payments pursuant to employment and bonus
agreements with certain former employees of the Debtor. The bonus pool and
executive long-term incentive plan provides for the payment of bonuses
equal to 4.76% of additional distributions to Class B Certificate holders
and (if any) Class C Certificate holders.
Fourth, Class B Certificate holders are entitled to distributions up to the
Pour-Over Level. The Pour-Over Level (approximately $58 million at December
31, 1999) is the liquidation preference on July 3, 1995 of the Debtor's
Series B and Series E preferred stock, less the
13
<PAGE> 15
FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(continued)
nominal stated value of FirstCity special preferred stock and the book
value of FirstCity common stock issued to the Series B and Series E
holders, plus interest at an annual rate of 6.5% from July 3, 1995. The
Pour-Over Level is also reduced for distributions to Class B Certificate
holders. In 1999, $23.4 million, or $9.50 per Certificate, was distributed
to Class B Certificate holders and a $1.1 million bonus was paid to certain
former employees of the Debtor. In 1998, $67.7 million, or $27.50 per
Certificate, was distributed to Class B Certificate holders and a $2.6
million bonus was paid to certain former employees of the Debtor. In
January 2000, $2.5 million, or $1.00 per Certificate, was distributed to
Class B Certificate holders.
Lastly, Class C Certificate holders receive distributions (if any) after
any remaining payments to Class B Certificate holders up to the Pour-Over
Level (approximately $23.49 per unit as of December 31, 1999).
The ultimate amounts to be distributed to the holders of the B and C
Certificates will result from the cash flow actually realized from the
liquidation of the non-cash Trust assets. The determination of the net
asset value of the Trust in the accompanying consolidated statements of net
assets in liquidation is based upon estimates of future cash flows. The
actual cash flows and the timing of such cash flows may vary significantly
from those estimates, thus affecting the final distributions to the
Certificate holders.
(D) Investment Management Agreement
Pursuant to the Investment Management Agreement, FirstCity managed the
liquidation of Trust assets and the Trust paid FirstCity a servicing fee on
collections. In the first quarter of 1997, the Investment Management
Agreement was terminated and, in consideration of this termination, the
Trust paid FirstCity $6.8 million, plus interest at a rate of 10 percent
per annum from January 1, 1997 until March 1997. Administrative expense
included $6.8 million in 1997 for servicing fees.
(E) Commitments and Contingencies
The Trust is involved in various legal proceedings in the ordinary course
of business. In the opinion of management of the Trust, the resolution of
such matters should not have a material adverse impact on the financial
position, results of operations or liquidity of the Trust.
In 1996, the FDIC closed the receiverships of the Debtor's banks and
distributed the remaining surplus of those receiverships to the Trust. In
accordance with a conveyance and indemnification agreement, the Trust will
be required, among other things, to provide indemnity to the FDIC against
any known or unknown liabilities, obligations or actual
14
<PAGE> 16
FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(continued)
expenses associated with the receiverships, in an aggregate amount up to
$10 million until the termination of the Trust. Management of the Trust
does not believe that, to the extent the Trust is obligated to pay certain
claims or expenses associated with the past obligations of the Debtor's
banks, such payments will have a material adverse impact on the financial
position, results of operations, or liquidity of the Trust.
15
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
The Portfolio Committee and Certificate Holders
FirstCity Liquidating Trust:
We have audited the accompanying consolidated statements of net assets
in liquidation of FirstCity Liquidating Trust and subsidiaries (the "Trust") as
of December 31, 1999 and 1998, and the related consolidated statements of income
and changes in net asset value in liquidation, and cash flows for each of the
years in the three-year period ended December 31, 1999. These consolidated
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
FirstCity Liquidating Trust and subsidiaries as of December 31, 1999 and 1998,
and the results of their operations and changes in net asset value in
liquidation and cash flows for each of the years in the three-year period ended
December 31, 1999, in conformity with generally accepted accounting principles.
KPMG LLP
Houston, Texas
January 28, 2000
16
<PAGE> 18
FIRSTCITY LIQUIDATING TRUST
SELECTED UNAUDITED QUARTERLY FINANCIAL DATA
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1999 1998
-------------------------------------------- --------------------------------------------
First Second Third Fourth First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Changes in fair value
of trust assets(1) ....... $ 2,113 $ 1,660 $ 1,137 $ 19,126 $ 24,766 $ 2,712 $ 6,958 $ 3,447
Interest income on
short-term investments ... 97 86 46 58 185 232 136 98
Administrative expense ....... (1,397) (1,102) (661) (684) (1,925) (1,843) (1,668) (1,423)
-------- -------- -------- -------- -------- -------- -------- --------
Net income .......... $ 813 $ 644 $ 522 $ 18,500 $ 23,026 $ 1,101 $ 5,426 $ 2,122
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
- ----------
(1) Includes increase of $17.5 million related to 67% interest in First City
Tower partnership and $22 million related to settlement from fidelity bond
carriers, respectively, in fourth quarter of 1999 and first quarter of 1998.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
Part III
Item 10. Directors and Executive Officers of the Registrant.
Role of the Portfolio Committee
Pursuant to Article IV of the Trust Agreement, except where expressly
limited by the terms of the Trust Agreement, all of the management and executive
authority over the Trust resides in the four-member Portfolio Committee (subject
to increase and reduction). The Trust Agreement provides that such four members
are initially Rick R. Hagelstein (the "Chief Credit Officer Member Position"),
Robert W. Brown (the "Robert W. Brown Member Position"), and Richard E. Bean and
R. David Palmer, as the two members designated by the Equity Committee (the
"Equity Committee Member Positions"). All have been members of the Portfolio
Committee since the Effective Date. Mr. Hagelstein resigned in the second
quarter of 1998 and Joe S. Greak was appointed to replace Mr. Hagelstein.
Background information and the employment histories of Messrs. Bean, Brown,
Greak and Palmer are set forth below.
Richard E. Bean, 56, has been Executive Vice President and Chief
Financial Officer of Pearce Industries, Inc. since 1976, which company, through
its subsidiaries, markets a variety of oilfield equipment and machinery. Prior
to the Effective Date, Mr. Bean was Chairman of the Equity Committee. Mr. Bean
is currently a director of FirstCity.
17
<PAGE> 19
Robert W. Brown, 51, has been President of FCLT Loans Asset Corp.
since the Effective Date. As of the Effective Date, Mr. Brown served as
Executive Vice President and Secretary of FirstCity. After the Effective Date he
resigned from FirstCity to devote substantially all of his time to the Trust.
Mr. Brown was Chief Financial Officer of the Debtor beginning in 1991. He served
as Executive Vice President of the Debtor from 1990 to 1992, became a member of
the Debtor's Board of Directors in 1992 and served as President of the Debtor
from 1993 through the Effective Date. Mr. Brown was a director and officer of
the Debtor when the Debtor filed a plan of reorganization under the Federal
bankruptcy laws in December 1994.
Joe S. Greak, 51, has been Senior Vice President, Tax Director and
Secretary of FirstCity since the Effective Date. Mr. Greak was the Tax Manager
of the Debtor from 1993 to the Effective Date.
R. David Palmer, 57, has been a private investor for the past 25
years. Prior to the Effective Date, Mr. Palmer was a member of the Equity
Committee. From 1970 to 1995, Mr. Palmer was a Professor of Philosophy at the
State University of New York, Fredonia, New York.
Officers and Others
Chris J. O'Mara, 48, has been Vice President of FCLT Loans Asset Corp.
since January 1996. Prior thereto, Mr. O'Mara was an independent contractor in
the financial services industry from 1993 to 1996 (and a contractor of the Trust
from August, 1995 to January, 1996). Mr. O'Mara was Executive Vice President and
Division Manager of First City, Texas-Houston, N.A. from 1991 to 1993.
Jerry D. Thompson, 44, has been Vice President of FCLT Loans Asset
Corp. since February 1997. Prior thereto, Mr. Thompson was Vice President of FCB
Real Estate Services, Inc., a subsidiary of the Trust and the Debtor.
C. Ivan Wilson, 72, was Chairman of the Board and Chief Executive
Officer of the Debtor from 1991 until the Effective Date and has been Vice
Chairman of the Board of FirstCity since that date.
Role of the Trustee
Although all of the management and executive authority over the Trust
resides in the Trustee, the Trustee functions as a directed Trustee under the
sole and absolute discretion of the Portfolio Committee and may not exercise
discretion in the management and conduct of the liquidation of the Trust assets.
The Trustee has no authority or right to refuse to act when so ordered or
directed to do so by the Portfolio Committee. The Trustee is State Street Bank
and Trust Company, formerly Fleet National Bank and Shawmut Bank Connecticut,
N.A. There have been no changes in the Trustee through the date of this Form
10-K.
18
<PAGE> 20
Item 11. Executive Compensation.
Compensation of the Trustee
The compensation paid by the Trust to the Trustee consisted of
administrative fees aggregating $20,500 in each of 1999, 1998 and 1997. Unless
renegotiated, annual administrative fees to be paid to the Trustee shall remain
constant.
Compensation of the Portfolio Committee
Pursuant to the terms of Article X of the Trust Agreement, the
Portfolio Committee consists of the following four members: Joe S. Greak in the
Chief Credit Officer Member Position, Robert W. Brown in the Robert W. Brown
Member Position, and two members as designated by the Equity Committee, who at
present are Richard E. Bean and R. David Palmer. Pursuant to Section 10.1.1 of
the Trust Agreement, Messrs. Bean and Palmer, or their respective successors,
each receives compensation for his services as a member of the Portfolio
Committee in an amount equal to $12,000 per annum, payable in $3,000 increments
on the first day of each calendar quarter. In addition, pursuant to a resolution
of the Board of Directors of Loans Asset Corp., Messrs. Bean and Palmer each
receive $1,000 for each Portfolio Committee meeting which they attend. The other
two members are not separately compensated for their services as members of the
Portfolio Committee.
Compensation of Executive Officers and Others
Executive officers and others of the Trust received compensation
during the last three years as set forth in the following table:
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1)
NAME AND --------------------------------
PRINCIPAL POSITION YEAR SALARY BONUS
- --------------------------------- ---- ------------- -----------
<S> <C> <C> <C>
Robert W. Brown 1999 $ 250,000 $ 385,460
- President of FCLT 1998 250,000 897,522
Loans Asset Corp. 1997 250,000 25,000
C. Ivan Wilson 1999 $ -- $ 385,460
- Vice Chairman of 1998 -- 872,522
FirstCity
Joe S. Greak 1999 $ -- $ 191,577
- Senior Vice President of 1998 -- 435,145
FirstCity
Chris J. O'Mara 1999 $ 125,000 12,500
- Vice President of FCLT 1998 125,000 37,500
Loans Asset Corp. 1997 125,000 12,500
Jerry D. Thompson 1999 $ 100,000 $ 36,774
- Vice President of FCLT 1998 100,000 103,376
Loans Asset Corp. 1997 96,600 35,000
</TABLE>
- ------------------------------
(1) Amounts reported for Mr. Wilson and Mr. Greak relate only to Exhibit O of
the Plan.
19
<PAGE> 21
Mr. Brown's compensation is determined as set forth in that certain
employment agreement (the "Brown Employment Agreement"), effective as of July 3,
1995, as amended May 1, 1996, by and between FCLT Loans Asset Corp. and Mr.
Brown. The Brown Employment Agreement provides for Mr. Brown's employment with
FCLT Loans Asset Corp. and his duties to the Trust for a term commencing on July
3, 1995 and terminating on dissolution of the Trust. Mr. Brown's duties include
his membership on the Portfolio Committee of the Trust, the management and
payment of creditor claims and the liquidation of the assets of the Trust
pursuant to the terms of the Trust Agreement. In compensation for such services,
Mr. Brown is paid an annual salary of $250,000. Through December 31, 1999, Mr.
Brown was paid $1.3 million in performance-oriented bonuses pursuant to Exhibit
O to the Plan. The Brown Employment Agreement provides for a conditional bonus
in an amount equal to 1.67% of all additional aggregate payments to the holders
of the Class B Certificates and the Class C Certificates. The payment of such
conditional bonus to Mr. Brown is to be determined by the Portfolio Committee.
In the event that the Brown Employment Agreement is terminated by the Portfolio
Committee prior to the termination date of the Trust, or upon the death or
disability of Mr. Brown, Mr. Brown or his estate is entitled to continue to
receive certain bonuses pursuant to the terms set forth in the Brown Employment
Agreement. Mr. Brown's unpaid bonuses will be forfeited in the event that he
terminates the Brown Employment Agreement or is terminated for cause by FCLT
Loans Asset Corp. prior to the date of the expiration of the Brown Employment
Agreement.
Pursuant to Section 9.8 of the Plan, Mr. Brown (as described in the
previous paragraph), along with C. Ivan Wilson, Joe S. Greak, former employees
of the Debtor and certain employees of the Trust, share in a bonus pool and
executive long-term incentive plan, the provisions of which are set forth in
Exhibit O to the Plan. In 1999, bonuses totaling $1.1 million ($.4 million to
Mr. Brown) were paid pursuant to Exhibit O. In 1998, bonuses totaling $2.6
million ($.9 million to Mr. Brown) were paid pursuant to Exhibit O.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) Since the Trust has no outstanding "voting securities" within the
meaning of the Exchange Act and the regulations thereunder, the disclosure
requirements of Form 10-K pertaining to 5% holders of voting securities are not
applicable.
(b) The following table sets forth certain information with respect to the
beneficial ownership of the Class B and Class C Beneficial Interests, as of
January 31, 2000, by the members of the Portfolio Committee. The Trustee is not
the beneficial owner of any Class B or Class C Beneficial Interests.
20
<PAGE> 22
<TABLE>
<CAPTION>
NUMBER OF CLASS B BENEFICIAL INTERESTS
AND PERCENTAGE OF OUTSTANDING
CLASS B BENEFICIAL INTERESTS
AS OF JANUARY 31, 2000
--------------------------------------
BENEFICIAL PERCENT
NAME AND ADDRESS OF OWNER OR IDENTITY OF GROUP OWNERSHIP OF CLASS
- ---------------------------------------------- --------- --------
<S> <C> <C>
Robert W. Brown .......................................... -- --
Richard E. Bean .......................................... 98,100 4.0
Joe S. Greak ............................................. -- --
R. David Palmer .......................................... -- --
All Portfolio Committee members as a group (4 persons) ... 98,100 4.0
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF CLASS C BENEFICIAL INTERESTS
AND PERCENTAGE OF OUTSTANDING
CLASS C BENEFICIAL INTERESTS
AS OF JANUARY 31, 2000
--------------------------------------
BENEFICIAL PERCENT
NAME AND ADDRESS OF OWNER OR IDENTITY OF GROUP OWNERSHIP OF CLASS
- ---------------------------------------------- --------- --------
<S> <C> <C>
Robert W. Brown .......................................... 197 *
Richard E. Bean .......................................... -- --
Joe S. Greak ............................................. -- --
R. David Palmer .......................................... -- --
All Portfolio Committee members as a group (4 persons) ... 197 *
</TABLE>
- --------------------------
* Less than 1%
(c) Because the Trust does not have any "voting securities" within the
meaning of the Exchange Act and the regulations thereunder, changes in ownership
of voting securities will not result in a change of control of the Trust.
Pursuant to the terms of the Trust Agreement, all of the management and
executive authority over the Trust resides in the four-member Portfolio
Committee.
The Trust has no knowledge of any arrangements which may result in a
change of control of the Trust. However, in the event that the position on the
Portfolio Committee held by Robert W. Brown is vacated for any reason, the
number of Portfolio Committee members will be permanently reduced to three. In
such instance, two of the three current remaining members of the Portfolio
Committee will be affiliated with FirstCity and, as a result, FirstCity may be
deemed to have some control over Portfolio Committee decisions.
Item 13. Certain Relationships and Related Transactions.
Distributions to FirstCity as Class A Certificate Holder
As the sole holder of the Class A Certificate, FirstCity received
distributions totaling $188 million from the Trust to retire the Class A
Certificate in December 1997.
21
<PAGE> 23
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements
The consolidated financial statements of the Trust are incorporated by
reference to Item 8 "Financial Statements and Supplementary Data" of
this report.
2. Financial Statement Schedules
Financial statement schedules have been omitted because the
information is either not required, not applicable, or is included in
Item 8 - "Financial Statements and Supplementary Data."
3. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- ----------------------------------------------------------------------
<S> <C>
2.1(1) Joint Plan of Reorganization for First City Bancorporation of Texas,
Inc., as modified, under Chapter 11 of the United States Bankruptcy
Code, as confirmed by the U.S. Bankruptcy Court for the Northern
District of Texas, Dallas Division, on May 31, 1995.
2.2(5) Order Extending Term of FirstCity Liquidating Trust, dated June 18,
1999.
3.1(1) The Liquidating Trust Agreement, dated as of July 3, 1995, by and
between First City Bancorporation of Texas, Inc. and Shawmut Bank
Connecticut, National Association (subsequently Fleet National Bank,
now State Street Bank and Trust Company), as Trustee.
10.1(3) Employment Agreement, effective as of July 3, 1995, by and between
FCLT Loans Asset Corp. and Robert W. Brown, as amended May 1, 1996.
10.2(2) Settlement Agreement, dated as of June 22, 1994, as amended as of
January 30, 1995, by and among FDIC-Corporate, the FDIC-Receivers and
the First City Parties.
10.3(3) Conveyance and Indemnification Agreement, dated December 23, 1996,
between FDIC-Corporate, the FDIC-Receivers, FCLT Loans, L.P. and the
Trust.
10.4(4) Extension of Conveyance and Indemnification Agreement, dated in April
1999, between FDIC-Corporate, the FDIC-Receivers, FCLT Loans, L.P. and
the Trust.
27.1 Financial Data Schedule.
</TABLE>
- -----------------------------------
(1) Filed as the exhibit indicated to the Registration Statement on
Form 10 filed with the Securities and Exchange Commission on May 1,
1996 and incorporated herein by reference.
22
<PAGE> 24
(2) Filed as the exhibit indicated to the Registration Statement on
Form 10/A filed with the Securities and Exchange Commission on July
10, 1996 and incorporated herein by reference.
(3) Filed as the exhibit indicated to the Form 10-K for the fiscal
year ended December 31, 1996 filed with the Securities and Exchange
Commission and incorporated herein by reference.
(4) Filed as the exhibit indicated to the Form 10-Q for the quarter
ended March 31, 1999 filed with the Securities and Exchange Commission
and incorporated herein by reference.
(5) Filed as the exhibit indicated to the Form 10-Q for the quarter
ended June 30, 1999 filed with the Securities and Exchange Commission
and incorporated herein by reference.
(b) Reports on Form 8-K. No report on Form 8-K was filed by the Registrant
with the Commission during the quarterly period ended December 31,
1999.
23
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
Date: February 11, 2000 /s/ Susan T. Keller
----------------------------------------
Name: Susan T. Keller
----------------------------------
Title: Vice President
----------------------------------
24
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- ----------------------------------------------------------------------
<S> <C>
2.1(1) Joint Plan of Reorganization for First City Bancorporation of Texas,
Inc., as modified, under Chapter 11 of the United States Bankruptcy
Code, as confirmed by the U.S. Bankruptcy Court for the Northern
District of Texas, Dallas Division, on May 31, 1995.
2.2(5) Order Extending Term of FirstCity Liquidating Trust, dated June 18,
1999.
3.1(1) The Liquidating Trust Agreement, dated as of July 3, 1995, by and
between First City Bancorporation of Texas, Inc. and Shawmut Bank
Connecticut, National Association (subsequently Fleet National Bank,
now State Street Bank and Trust Company), as Trustee.
10.1(3) Employment Agreement, effective as of July 3, 1995, by and between
FCLT Loans Asset Corp. and Robert W. Brown, as amended May 1, 1996.
10.2(2) Settlement Agreement, dated as of June 22, 1994, as amended as of
January 30, 1995, by and among FDIC-Corporate, the FDIC-Receivers and
the First City Parties.
10.3(3) Conveyance and Indemnification Agreement, dated December 23, 1996,
between FDIC-Corporate, the FDIC-Receivers, FCLT Loans, L.P. and the
Trust.
10.4(4) Extension of Conveyance and Indemnification Agreement, dated in April
1999, between FDIC-Corporate, the FDIC-Receivers, FCLT Loans, L.P. and
the Trust.
27.1 Financial Data Schedule.
</TABLE>
- -----------------------------------
(1) Filed as the exhibit indicated to the Registration Statement on
Form 10 filed with the Securities and Exchange Commission on May 1,
1996 and incorporated herein by reference.
(2) Filed as the exhibit indicated to the Registration Statement on
Form 10/A filed with the Securities and Exchange Commission on July
10, 1996 and incorporated herein by reference.
(3) Filed as the exhibit indicated to the Form 10-K for the fiscal
year ended December 31, 1996 filed with the Securities and Exchange
Commission and incorporated herein by reference.
(4) Filed as the exhibit indicated to the Form 10-Q for the quarter
ended March 31, 1999 filed with the Securities and Exchange Commission
and incorporated herein by reference.
(5) Filed as the exhibit indicated to the Form 10-Q for the quarter
ended June 30, 1999 filed with the Securities and Exchange Commission
and incorporated herein by reference.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FIRSTCITY
LIQUIDATING TRUST DECEMBER 31, 1999 FORM 10-K FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FIRSTCITY LIQUIDATING TRUST
DECEMBER 31, 1999 FORM 10-K.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 5,271
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 49,150
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 54,421
<CURRENT-LIABILITIES> 2,021
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 52,400
<TOTAL-LIABILITY-AND-EQUITY> 54,421
<SALES> 24,036
<TOTAL-REVENUES> 24,323
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,844
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 20,479
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,479
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,479
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
