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UNITED STATES 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 (fee required)
For the fiscal year ended December 31, 1999
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (no fee required)
For the Transition Period From ________ To ________
Commission file Number 333-44155
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
(Exact name of registrant as specified in its charter)
DELAWARE 13-7140975
(State of Incorporation) (I.R.S. Employer Identification No.)
E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road,
Wilmington, Delaware 19805-1266
(Address of principal executive offices)
Registrant's telephone number, including area code: (302) 636-3300
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Contingent Payment Rights Certificates
(Title of 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, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
At March 3, 2000 the aggregate market value of registrant's securities
(consisting solely of the Contingent Payment Rights Certificates (the "CPR
Certificates")) held by nonaffiliates of the registrant, based on the average
bid and asking price of the CPR Certificates on that date of $1.98 per
Certificate, was approximately $40.2 million.
At March 3, 2000 there were 20,703,817 CPR Certificates, no par value,
outstanding.
Documents incorporated by reference:
None
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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 the
Form 10-K. [X]
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Table of Contents
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PART I
Item 1. Business....................................................... 4
Item 2. Properties..................................................... 4
Item 3. Legal Proceedings.............................................. 4
Item 4. Submission of Matters to a Vote of Security Holders............ 4
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.................................... 4
Item 6. Selected Financial Data........................................ 5
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................. 5
Item 7A. Quantitative and Qualitative Disclosures about Market Risk..... 14
Item 8. Financial Statements and Supplementary Data.................... 15
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure............................ 25
PART III
Item 10. Directors and Executive Officers of the Registrant............. 25
Item 11. Executive Compensation......................................... 25
Item 12. Security Ownership of Certain Beneficial
Owners and Management.......................................... 25
Item 13. Certain Relationships and Related Transactions................. 26
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K............................................ 26
Signatures..................................................... 27
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PART I
ITEM 1. BUSINESS
The information required by this Item is set forth under Part II, Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - General."
ITEM 2. PROPERTIES
The Coast Federal Litigation Contingent Payment Rights Trust (the "CPR Trust")
leases an office at 136 South Oak Knoll Avenue, Suite 320, Pasadena, California
91101.
ITEM 3. LEGAL PROCEEDINGS
The CPR Trust is not a party to any legal proceedings. For a discussion of
Coast Federal Bank, FSB v. The United States, which is the Litigation to which
the Registrant's CPR Certificates relate, see Part II, Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations - The
Litigation."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The CPR Certificates trade on The NASDAQ Stock Market under the symbol CCPRZ.
The following table indicates certain quarterly information with respect to the
CPR Certificates' trading prices; the CPR Certificates' first year of trading
was 1998.
1999 1998
------------ --------------
High Low High Low
----- ----- ------ ------
First Quarter $8.25 $5.38 $16.31 $13.50
Second Quarter 7.25 0.88 17.13 14.25
Third Quarter 1.81 0.94 15.31 9.06
Fourth Quarter 1.69 0.69 10.56 5.00
As of February 22, 2000, there were approximately 2,995 beneficial owners of the
CPR Certificates. No dividends were declared or paid on the CPR Certificates
in 1999. For a description of the CPR Certificates, see Part II, Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - General."
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ITEM 6. SELECTED FINANCIAL DATA
See Part II, Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Summary Financial Information."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Registration
Statement on Form S-1 with respect to the CPR Certificates referred to herein
filed by Coast Savings Financial, Inc. ("Coast") with, and declared effective
by, the Securities and Exchange Commission (the "SEC") on January 13, 1998 (SEC
File Number 333-44155).
GENERAL
The Federal Litigation Contingent Payment Rights Trust (the "CPR Trust")
is a statutory business trust created under Delaware law on January 8, 1998. The
CPR Trust was created by Coast in connection with its merger, effected on
February 13, 1998 (the "Merger"), with and into H. F. Ahmanson & Co.
("Ahmanson"), for the purpose of holding the Commitment Agreement entered into
by Ahmanson and the CPR Trust, dated as of February 13, 1998 (the Commitment").
The Commitment represents Ahmanson's obligation to pay to the CPR Trust an
amount equal to any net after-tax proceeds, as more particularly defined in the
CPR Trust Agreement referred to below (the "Commitment Amount"), that may be
received by Coast's wholly-owned subsidiary, Coast Federal Bank, FSB ("Coast
Federal") (or its successor), from Coast Federal's regulatory capital litigation
claims against the United States government in the case entitled Coast Federal
Bank, FSB v. United States, No. 92-466C (Cl. Ct. filed July 9, 1992) (the
"Litigation"). Subsequent to the merger, Ahmanson merged Coast Federal with and
into Ahmanson's wholly-owned subsidiary, Home Savings of America, FSB ("Home
Savings"), with Home Savings being the successor institution. Ahmanson merged
into Washington Mutual, Inc. ("WAMU") on October 3, 1998, and Home Savings was
thereafter merged into WAMU's wholly-owned subsidiary, Washington Mutual Bank,
F.A. ("Washington Mutual").
The governing instrument of the CPR Trust is the Amended and Restated
Declaration of Trust, dated as of February 13, 1998 (the "CPR Trust Agreement"),
entered into among Coast, the Litigation Trustees, Bankers Trust Company (the
"Institutional Trustee") and Bankers Trust (Delaware) (the "Delaware Trustee").
Pursuant to the CPR Trust Agreement, the four senior executives of Coast with
knowledge of the facts underlying the Litigation were appointed as "Litigation
Trustees" of the CPR Trust, and were given full authority to make all decisions
on behalf of Coast Federal (and its successors) with respect to the prosecution
and resolution of the Litigation.
The assets of the CPR Trust consist solely of the Commitment and the right to
draw on amounts in the Expense Fund for purposes of funding expenses of the CPR
Trust, including expenses of the Litigation, fees and expenses of the Litigation
Trustees and all administrative expenses. Under the CPR Trust Agreement,
Ahmanson agreed to provide the sum of $19,884,294 (which is equal to $20 million
less expenses related to the Litigation incurred by Coast Federal between
September 1, 1997 and February 13, 1998) (the "Expense Fund") to fund
the Litigation and other expenses of the CPR Trust, which amount is to be
reimbursed to Ahmanson from any proceeds of the Litigation, including any
amounts received in settlement of the Litigation, prior to the payment of any
amounts to holders of the Contingent Payment Rights Certificates (the "CPR
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Certificates"). The Expense Fund is on deposit in a non-interest bearing demand
deposit account in the name of the CPR Trust at Washington Mutual.
Within 60 days of the receipt of any Commitment Amount, the CPR Trust is
required under the CPR Trust Agreement to pay such amounts (other than $10
million or such greater amount as the Litigation Trustees reasonably determine
may be reasonably likely to be required to pay additional expenses or to satisfy
the CPR Trust's indemnification obligations (the "Retained Amount")) less the
amount of any accrued but unpaid expenses payable by the CPR Trust but not
covered by the Expense Fund, to the holders of the CPR Certificates as of a
record date to be set by the Litigation Trustees. The Retained Amount will be
retained for a period of two years, or such longer period as the Litigation
Trustees reasonably determine may be required.
THE LITIGATION
The following description of the Litigation does not purport to be a complete
description of the legal and factual issues presented, the court opinions
rendered or the relevant law, and the description is in all respects qualified
by reference to the documents filed in the Litigation, such opinions and the
relevant law.
On July 9, 1992, Coast Federal commenced litigation entitled Coast Federal Bank,
Federal Savings Bank v. United States, Civil Action Number 92-466C, against the
United States in the U.S. Claims Court (now the U.S. Court of Federal Claims,
hereinafter, the "Claims Court") alleging that the United States is in breach of
a contract with Coast Federal and has unlawfully taken Coast Federal's property
without just compensation or due process of law in violation of the U.S.
Constitution.
As further described below, Coast Federal's claims arose from changes with
respect to the rules for computing Coast Federal's regulatory capital that were
mandated by the Financial Institutions Reform, Recovery and Enforcement Act of
1989 ("FIRREA") and certain regulations promulgated thereunder.
On April 10, 1987, Coast Federal acquired substantially all of the assets and
liabilities of Central Savings and Loan Association ("Central") from the Federal
Savings and Loan Insurance Corporation (the "FSLIC") in a supervisory
transaction (the "Acquisition") that Coast Federal alleges was induced and
arranged by the FSLIC and the Federal Home Loan Bank Board ("FHLBB"). As part of
the Acquisition, Coast Federal entered into a contract with the FSLIC (the
"Assistance Agreement") under which the FSLIC made a cash contribution to Coast
Federal in the amount of $298.3 million (the "Capital Credit"). In the
Litigation, Coast Federal alleges that the Assistance Agreement and certain
resolutions and a forbearance letter issued by the FHLBB in connection with the
Assistance Agreement each expressly provided that the Capital Credit was to be
treated as a permanent addition to Coast Federal's regulatory capital. Coast
Federal further alleges that such treatment of the Capital Credit for regulatory
capital purposes was essential to inducing Coast Federal to consummate the
Acquisition.
Pursuant to FIRREA, which became effective on August 9, 1989, the FSLIC and the
FHLBB were eliminated and were replaced as the regulators of federally insured
savings institutions by the Office of Thrift Supervision (the "OTS"). In
regulations implementing FIRREA (the "Capital Regulations") and subsequent
actions, the OTS took the position that the Capital Credit should be classified
as supervisory goodwill, as defined in the Capital Regulations, which action
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resulted in an immediate exclusion of the Capital Credit from one of the three
measures of Coast Federal's regulatory capital, and effected a five-year phase-
out of the Capital Credit from such inclusion in the other two measures.
Coast Federal alleges that FIRREA and the Capital Regulations constituted a
breach by the United States of its contractual commitment regarding the
regulatory capital treatment of the Capital Credit and an unlawful taking of
Coast Federal's property rights in the Capital Credit. Coast Federal seeks
damages for such breach of the alleged contract by the United States.
SIMILAR LITIGATION
The Litigation is one of a number of cases filed against the federal government
in the Claims Court involving acquisitions of failed savings institutions and
alleging that the changes in regulatory capital calculations brought about by
FIRREA and the Capital Regulations constitute a breach of the contract between
the acquiring institution and the federal government. For purposes of the
administration of such claims, the Claims Court bifurcated the trial proceedings
in the first three of such cases to be heard by it (Winstar Corporation, et al.
v. United States, Docket No. 90-8C; Statesman Savings Holding Corp., et al. v.
United States, Docket No. 90-773C (the "Statesman Case"); and Glendale Federal
Bank v. United States, Docket No. 90-772C (the "Glendale Case")(which cases are
collectively referred to herein as the "Related Cases"). In July 1992, the
Claims Court ruled in favor of the plaintiffs in the Related Cases on the
initial question of liability, finding in each case that the plaintiff had a
contract as alleged with the federal government and that the federal government
is in breach of that contract as a result of the enactment of FIRREA and the
issuance of the Capital Regulations thereunder. The decision of the Claims Court
on liability was appealed by the federal government. After extended appellate
proceedings, culminating in an appeal to the Supreme Court, the Supreme Court
ruled in favor of the plaintiffs in the Related Cases in United States v.
Winstar Corp., et al., 518 U.S. 839 (1996) (the "Winstar Case").
To manage the numerous cases against the federal government involving the
calculation of regulatory capital as a result of the adoption of FIRREA (all
such cases being referred to herein as the "Regulatory Capital Cases"), twelve
of such cases were designated as priority cases (the "Priority Cases") that
would be the first cases to go to trial following the trial on damages in the
Glendale Case. The Litigation is scheduled to be among the first group of thirty
cases (the "First Group of Thirty Cases") to go to trial following the
completion of trial in the Priority Cases. Pursuant to the case management
order applicable to Regulatory Capital Cases, as such order has been amended,
case specific discovery for the First Group of Thirty Cases was completed on
July 31, 1999, and parties in the First Group of Thirty Cases will not be
eligible to have their cases tried until June 25, 2000, at the earliest. The
current deadlines set forth in the schedule applicable to the First Group of
Thirty Cases may be extended or otherwise modified by order of the Chief Judge
of the Claims Court.
LIABILITY
The Claims Court stayed proceedings in each of the other cases against the
federal government, including the Litigation, pending the outcome of the
liability phase of the Related Cases. After the Supreme Court's decision in the
Winstar Case in July of 1996, the stay was lifted and Coast reinstated its
motion for partial summary judgment as to the federal government's liability,
which motion had been pending since March of 1993. On February 20, 1998, the
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United States filed its response to Coast Federal's motion. In its response, the
Government stated that "at this point, entry of an order regarding the
Government's liability would be appropriate. We believe that such an order
should reflect the Government's concession that a contract existed with respect
to Coast's claim for a capital credit to its net worth, and that the Government
acted inconsistently with the contract." On March 23, 1998, Chief Judge Loren
A. Smith entered an order in the Litigation granting Coast Federal's motion for
partial summary judgment as to liability with respect to Coast Federal's claim
for a capital credit to its net worth.
ALTERNATIVE DISPUTE RESOLUTION PROCESS
In response to the federal government's request, Coast Federal agreed to
participate in the alternative dispute resolution process (the "ADR Process")
established by Chief Judge Smith in his order dated March 3, 1998, with respect
to the Regulatory Capital Cases. However, by Order dated October 22, 1998, Judge
Margolis, the Claims Court Judge appointed to implement the ADR Process,
released the parties to the Litigation from further participation in the ADR
Process following the communication by the parties to Judge Margolis of their
mutual agreement that such participation was not likely to be fruitful.
DAMAGES
Each savings institution affected by FIRREA's and the Capital Regulations'
limitation on the inclusion in regulatory capital of supervisory goodwill or
FSLIC capital contributions reacted to the resulting reduction in their
regulatory capital in an individual fashion dictated by the unique facts and
circumstances faced by the institution. Accordingly, the extent and amount of
damages awarded to each such institution that has brought an action against the
federal government is expected to be dependent on the specific facts in each
case. Even if the plaintiffs in the Related Cases or Priority Cases are
successful in securing damage awards, there can be no assurance that Coast
Federal will obtain a damage award.
Plaintiffs in the Regulatory Capital Cases have tended to pursue damages based
on one or more of three alternative damage theories: (1) expectation damages,
(2) restitution, and (3) reliance damages. It is impractical to provide a full
description of the elements of damage recoverable under each of those
alternative damage theories. However, the following descriptions are provided
for purposes of communicating a basic understanding of these legal theories.
Expectation damages are generally intended to place the injured party in as good
a position as it would have been in if the contract had been fully performed.
Such damages may include the loss of any monetary benefits that the injured
party would have received in the absence of the breach plus any other losses
caused by the breach, less any costs or losses avoided by the injured party as a
direct result of the breach.
Restitution generally involves restoration to the injured party of any benefits
conferred by it on the breaching party. The injured party's restitution
interest is ordinarily measured by the reasonable value of the benefits
conferred by its performance of the contract on the breaching party, reduced by
any benefits received by the injured party through the breaching party's partial
performance.
Reliance damages are generally intended to restore the injured party to the
position it would have been in if the contract had not been made. Reliance
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damages are generally measured by any expenditures made by the injured party in
the course of performance of the contract or as a result of entering into the
contract.
The plaintiff has the burden of proving the amounts of its damages, or the value
of its performance as a basis for restitution, by a preponderance of the
evidence.
On September 29, 1999, Coast Federal filed with the Claims Court the final
reports of its expert witnesses. The reports describe the amounts and methods of
calculation of the damages which the experts believe Coast Federal suffered as a
result of the government's breach of the Assistance Agreement relating to
Coast's acquisition of Central. Coast Federal's principal expectation damages
analysis as set forth in the experts' reports calculates the damages to be
$1.397 billion. An alternative expectation damages analysis calculates damages
to be $782.1 million. Coast Federal's expectation damages analyses include
calculations of damages for lost profits, for the cost of replacing capital, and
for increased operating costs (such as costs of deposits, OTS assessments, and
deposit insurance premiums) caused by the government's breach. No calculations
for either restitution or reliance damages were included in the reports. The
expert reports are attached as exhibits to a filing made on September 29, 1999,
on behalf of Coast Federal with the Claims Court in Washington, D.C. In early
January 2000, the government completed its deposition of the expert witnesses
who prepared the reports, and on January 27, 2000, the government submitted its
own experts' reports on damages in response to the conclusions set forth in the
reports of Coast Federal's experts. However, the government did not file its
expert's reports with the Claims Court and such reports are not therefore
publicly available. Coast will likely complete its depositions of the expert
witnesses who prepared the government's experts' reports by the middle of May
2000.
The United States has argued in the Glendale Case and in the Priority Cases that
have gone to trial that some or all of the damages alleged by the plaintiffs in
those cases are too speculative to permit a recovery. Trial in the damages phase
of the Statesman Case commenced in May 1998, but the government and the
plaintiffs in that case reached a settlement prior to completion of the trial.
Trial of the damages phase of the Glendale case concluded in September 1998. The
plaintiff in the Glendale Case sought damages based on various damage theories
and ranging from approximately $800 million to $2 billion depending upon the
theory used. On April 9, 1999, the judge in the Glendale Case awarded the
plaintiff $909 million in restitution damages and for increased operating costs
(which the judge characterized as reliance damages), based on that judge's
evaluation of the evidence and analysis of the legal arguments presented in the
Glendale Case. The damages phase of the first of the Priority Cases to go to
trial on the issue of damages, California Federal Bank v. the United States,
Docket No. 92-138C (the "CalFed Case"), concluded in February 1999. The
plaintiff in the CalFed Case sought damages of between $725 million and $1.642
billion based on damage theories similar to those presented by the plaintiff in
the Glendale case. On April 16, 1999, the judge in the CalFed Case awarded the
plaintiff approximately $23 million in transaction costs under a cost of
replacement capital theory, based on that judge's evaluation of the evidence
and analysis of the legal arguments presented in the CalFed Case. A decision in
another Priority Case, LaSalle Talman Bank, F.S.B. v. the United States, Docket
No. 92-652C (the "LaSalle Talman Case"), was filed on September 30, 1999. The
plaintiff in the LaSalle Talman Case sought damages of between $858.8 million
and $1.197 billion based on various damages theories. The judge in the LaSalle
Talman Case awarded plaintiffs approximately $5 million in reliance damages,
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based on that judge's evaluation of the evidence and analysis of the legal
arguments presented in that case. A decision in a third Priority Case, Landmark
Land Company, Inc. v. United States, Docket No. 95-502C (the "Landmark Case"),
was filed on March 3, 2000. The plaintiffs in the Landmark Case sought damages
of between $1.042 billion and $1.432 billion based on various combined damages
theories of both the private plaintiff and the FDIC. The judge in the Landmark
Case, the same judge who had presided in the CalFed Case, awarded the private
plaintiff and the FDIC a total of approximately $39.2 million in restitution and
reliance damages, based on that judge's evaluation of the evidence and analysis
of the legal arguments presented in the Landmark Case.
The courts in the Glendale Case, the CalFed Case, the LaSalle Talman Case and
the Landmark Case declined to award damages under some or all of the plaintiffs'
damage theories. No judge in any of the cases made an award for lost profits
damages, which is one of the primary theories of expectation damages for which
Coast is currently seeking a recovery. In addition, no judge in any of the
cases has made an award of cost of replacement capital damages (other than
transaction costs), which is another one of the primary theories of expectation
damages for which Coast is currently seeking a recovery.
The remaining Priority Cases are scheduled for trial before the damages phase of
Coast Federal's case is expected to go to trial, and it is likely that rulings
in those cases will occur before trial of Coast Federal's damage claims.
Appeals of the judgments in the Glendale Case, the CalFed Case and the LaSalle
Talman Case have been filed with the Court of Appeals for the Federal Circuit,
and appeals of other Priority Cases are likely. Any decisions reached by the
Court of Appeals in those cases could affect Coast Federal's damages claims. For
these and other reasons, there can be no assurance as to the type or amount, if
any, of damages that Coast Federal may recover. Without limiting the generality
of the foregoing, there can be no assurance that Coast Federal will obtain any
monetary or other recovery in the Litigation.
MANAGEMENT OF THE LITIGATION
The Litigation Trustees are Ray Martin, Robert L. Hunt II, Norman H. Raiden and
James F. Barritt, who at the time of the Merger were the four senior Coast
executives with knowledge of the facts underlying the Litigation. Mr. Martin,
Mr. Hunt and Mr. Barritt were officers of Coast and Coast Federal both at the
time of the agreement with the federal government to treat certain amounts as a
permanent addition to Coast Federal's regulatory capital in connection with
Coast Federal's acquisition of Central, and also at the time of the alleged
breach of this agreement by the federal government, which gave rise to the
claims underlying the Litigation. Mr. Martin, Mr. Hunt and Mr. Barritt, together
with Mr. Raiden (who joined Coast soon after the alleged breach of the agreement
by the federal government), had been involved in the prosecution of the
Litigation prior to the Merger.
Mr. Martin is 64 years old and prior to the Merger served as Chairman of the
Board, Chief Executive Officer and Director of Coast and Coast Federal. Mr. Hunt
is 49 years old and prior to the Merger served as Director, President and Chief
Operating Officer of Coast and Coast Federal. Mr. Raiden is 67 years old and
prior to the Merger served as Senior Executive Vice President of Coast and Coast
Federal and General Counsel of Coast, and until December 3, 1997, served as
General Counsel of Coast Federal. Mr. Barritt is 41 years old and prior to the
Merger served as Senior Executive Vice President and Chief Financial Officer of
Coast and Coast Federal.
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Pursuant to the CPR Trust Agreement, the Litigation Trustees have the sole and
exclusive right to instruct Coast Federal and its successors with respect to the
prosecution of the Litigation (including all decisions as to retention,
dismissal and the terms of engagement of existing or new counsel for Coast
Federal, which retention may involve fees that are partly contingent, and other
advisors). The CPR Trust Agreement also provides that the Litigation Trustees
have the right, in their sole discretion, to instruct Coast Federal and its
successors to dismiss, settle or cease prosecution of the Litigation at any time
and on any terms; Ahmanson, including any successor, is required by the CPR
Trust Agreement to cause Coast Federal and its successors to follow such
instructions from the Litigation Trustees other than instructions that are not
reasonable.
The Litigation Trustees have entered into a letter agreement with the law firm
which has prosecuted the Litigation to date, Cooper, Carvin & Rosenthal, PLLC
(the "Firm"), dated February 13, 1998 (the "Letter Agreement"), in which the
Firm agrees that it will not bill Coast Federal or the CPR Trust for any fees
incurred subsequent to September 1, 1997, in excess of $7,650,000 (the "Cap").
In addition, up to $2 million of the Cap, i.e., any amounts over $5,650,000,
will only be payable to the Firm out of the Commitment Amount, if any, when
received by the CPR Trust from Ahmanson. In consideration of such limitations on
the Firm's customary charges for professional services, the Letter Agreement
provides that the CPR Trust will pay to the Firm, in addition to the Cap, a
contingent incentive fee in the amount of one percent (1%) of the Commitment
Amount, provided that no such incentive fee shall be payable in the event (1)
that both Charles J. Cooper and Steven S. Rosenthal shall cease to be partners
of the Firm prior to a final decision, including appeals, or other final
resolution of the Litigation, or (2) that either Mr. Cooper or Mr. Rosenthal
shall cease to be a partner of the Firm prior to a final decision, including any
appeals, or other final resolution of the Litigation, other than by death,
disability, or appointment to federal office.
The CPR Trust Agreement provides that as compensation the CPR Trust will pay
each Litigation Trustee, during the term of his service as a Litigation Trustee,
fees of $400,000 per year for five years (except that if the Litigation is
sooner terminated, the remainder of such fees (but in no event with respect to a
period longer than the remainder of such year plus two additional years) will be
accelerated upon final resolution of the Litigation and receipt by Ahmanson of
the Litigation Proceeds), plus reimbursement of all reasonable out-of-pocket
expenses. If the services of the Litigation Trustees continue to be necessary
after the initial five-year period or such receipt of Litigation Proceeds, the
Litigation Trustees shall be entitled to a fee of $200 per hour until
termination of the CPR Trust. Pursuant to the CPR Trust Agreement, each
Litigation Trustee may, but is not obligated to, defer all or part of his
compensation until 30 days after the earliest to occur of (i) the date on which
he elected to defer such compensation, (ii) the date he ceases to be a
Litigation Trustee, and (iii) the date of the receipt of the Commitment Amount
in full by the CPR Trust. Any Litigation Trustee electing to so defer will
receive the compensation he would have received plus an amount, calculated on a
monthly basis during the period of deferral (and included in the amount
deferred), equal to the product of the monthly balance of the amount deferred
and an annual rate equal to the Reference Rate, as defined in the CPR Trust
Agreement, plus 250 basis points. For the year ending December 31, 2000, Mr.
Barritt and Mr. Hunt made no deferral election and Mr. Martin and Mr. Raiden
elected to defer one-half of their 2000 compensation.
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SUMMARY FINANCIAL INFORMATION
The CPR Trust has no revenues. The Expense Fund is the CPR Trust's only source
of funding for the payment of the expenses of its operations. The amounts in
the Expense Fund will be applied to a variety of expenses, including the costs
of prosecuting the Litigation (including the fees and expenses of counsel,
experts, support staff and consultants), compensation of the Institutional
Trustee, the Delaware Trustee and the Litigation Trustees, the CPR Trust's
indemnification obligations, liability insurance for the CPR Trust's
indemnification obligations and any liabilities of the Litigation Trustees. To
the extent that Coast Federal and its successors must engage in protracted
litigation, such fees and expenses may increase significantly, and there can be
no assurance that the Expense Fund will be sufficient to cover such fees and
expenses.
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Following is a statement that details the activity in the Expense Fund, and
expenses that have been accrued but not yet paid for the year ended December 31,
1999, and for the period February 13, 1998 (the date of commencement of
operations of the CPR Trust) through December 31, 1998, as well as the balance
of the Expense Fund that was available to cover future expenses as of December
31, 1999.
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For the Period
February 13, 1998
For the Year Ended Through
December 31, 1999 December 31, 1998
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Initial deposit by Ahmanson $19,884,294
Expense Fund balance available for future
Expenses as of December 31, 1998 $16,180,061
Disbursements:
Litigation Trustee fees (983,333) (633,333)
Litigation and trust administration (268,594) (205,832)
Outside legal counsel and expert witness fees (3,894,464) (734,234)
Premises and equipment (53,449) (118,122)
Insurance (657) (1,003,249)
Office and other expenses (198,798) (63,305)
Accrued expenses:
Deferred Litigation Trustee fees (600,000) (700,000)
Accrued Litigation Trustee fees (16,667) (66,667)
Accrued litigation and trust
administration fees - (21,667)
Accrued outside legal counsel and expert
witness fees (371,200) (121,800)
Other accrued expenses (10,000) -
Accrued interest on deferred Litigation
Trustee fees (117,091) (36,024)
----------- -----------
Expense Fund balance available
for future expenses as of
year end $ 9,665,808 $16,180,061
=========== ===========
</TABLE>
In addition to the accrued expenses summarized above, $745,002 of expense was
accrued through December 31, 1999, for interest that may be payable to Ahmanson
13
<PAGE>
or its successor on disbursements from the Expense Fund. The CPR Trust's
obligation to pay such accrued interest payable is contingent upon receipt of
sufficient Litigation Proceeds. Expenses for "Litigation and trust
administration" refer to fees paid to three individuals retained by the CPR
Trust to provide litigation and trust administration support services.
The amounts in the Expense Fund will be applied to a variety of expenses,
including the costs of prosecuting the Litigation (including the fees and
expenses of counsel, experts, support staff and consultants), compensation of
the Institutional Trustee, the Delaware Trustee and the Litigation Trustees, the
CPR Trust's indemnification obligations, liability insurance for the CPR Trust's
indemnification obligations and any liabilities of the Litigation Trustees. To
the extent that Coast Federal and its successors must engage in protracted
litigation, such fees and expenses may increase significantly, and there can be
no assurance that the Expense Fund will be sufficient to cover such fees and
expenses.
The CPR Trust may issue additional CPR Certificates that represent pro rata
interests in the assets of the CPR Trust in order to pay expenses. However, it
may not be possible to obtain purchasers of the additional CPR Certificates and
there is no assurance that the terms of any such purchases would be reasonable.
In the event additional CPR Certificates are issued and existing CPR Certificate
holders are not given the opportunity to purchase, or do not purchase, a pro
rata amount in such issuance, such CPR Certificate holders' indirect interest in
the Payment Amount will be diluted. The CPR Trust will be authorized to borrow
additional funds for the sole purpose of funding expenses of the CPR Trust, but
only if such borrowings represent debt of the CPR Trust (and not ownership
interests therein) for federal income tax purposes. Furthermore, it may not be
possible for the CPR Trust to borrow funds and, if it is able to borrow funds,
there can be no assurance as to the terms upon which such borrowings may be
available.
CERTIFICATEHOLDER INQUIRIES
Certificateholder inquiries, including requests for the following: (i) change of
address; (ii) replacement of lost stock certificates; (iii) Common Stock name
registration changes; (iv) Quarterly Reports on Form 10-Q; (v) Annual Reports on
Form 10-K; and (vii) information regarding stockholdings,
should be directed to:
Bankers Trust Company
Four Albany Street, MS5041
New York, New York 10006
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
14
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Independent Auditors' Report
The Trustees
Coast Federal Litigation Contingent Payment Rights Trust:
We have audited the accompanying statement of financial condition of Coast
Federal Litigation Contingent Payment Rights Trust as of December 31, 1999 and
the related statements of operations, changes in certificateholders' equity and
cash flows for the year ended December 31, 1999, and the period February 13,
1998 (commencement of operations) through December 31, 1998. These financial
statements are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit 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 financial statements referred to above present fairly, in
all material respects, the financial position of Coast Federal Litigation
Contingent Payment Rights Trust as of December 31, 1999 and 1998 and the results
of its operations and its cash flows for the year ended December 31, 1999, and
the period February 13, 1998 (commencement of operations) through December 21,
1998 in conformity with generally accepted accounting principles.
KPMG LLP
Los Angeles, California
February 17, 2000
15
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Statement of Financial Condition
<TABLE>
<CAPTION>
December 31,
----------------------------------------------
1999 1998
---------------------- ---------------------
<S> <C> <C>
ASSETS
Cash in bank $ 11,726,923 $ 17,126,219
Other assets 639,477 839,996
---------------------- ---------------------
Total Assets $ 12,366,400 $ 17,966,215
====================== =====================
LIABILITIES AND CERTIFICATEHOLDERS' EQUITY
Expense fund $ 19,884,294 $ 19,884,294
Deferred Litigation Trustee fees 1,300,000 700,000
Other liabilities 1,506,117 411,432
---------------------- ---------------------
Total Liabilities 22,690,411 20,995,726
---------------------- ---------------------
Certificateholders' Equity
Certificates, no par value, 20,703,817
authorized, issued and outstanding - -
Accumulated deficit (10,324,011) (3,029,511)
---------------------- ---------------------
Total Certificateholders' Equity (10,324,011) (3,029,511)
---------------------- ---------------------
$ 12,366,400 $ 17,966,215
====================== =====================
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Statement of Operations
<TABLE>
<CAPTION>
For the Period
February 13, 1998
For the Year (Commencement of
Ended Operations) Through
December 31, 1999 December 31, 1998
--------------------------- -------------------------------
REVENUE $ - $ -
--------------------------- -------------------------------
<S> <C> <C>
EXPENSES
Litigation Trustee fees (1,600,000) (1,400,000)
Legal fees (2,730,037) (661,096)
Litigation consulting - expert witnesses (1,535,627) (194,938)
Litigation and trust administration (268,594) (227,500)
Interest expense (696,819) (201,298)
Premises and equipment (53,449) (113,622)
Insurance (201,177) (167,752)
Other (208,797) (63,305)
--------------------------- -------------------------------
Total Expenses (7,294,500) (3,029,511)
--------------------------- -------------------------------
Net Loss $ (7,294,500) $ (3,029,511)
=========================== ===============================
Net Loss Per Certificate $ (0.35) $ (0.15)
=========================== ===============================
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Statement of Changes in Certificateholders' Equity
<TABLE>
<CAPTION>
Total
Accumulated Certificateholders'
Certificates Deficit Equity
------------ --------------- -------------------
<S> <C> <C> <C>
Balance February 13, 1998 $ - $ - $ -
Net loss for the period
February 13, 1998 (commencement
of operations) through
December 31, 1998 - (3,029,511) (3,029,511)
------------ --------------- -------------------
Balance December 31, 1998 - (3,029,511) (3,029,511)
------------ --------------- -------------------
Net loss for the year ended
ended December 31, 1999 - (7,294,500) (7,294,500)
------------ --------------- -------------------
Balance December 31, 1999 $ - $ (10,324,011) $ (10,324,011)
============ =============== ===================
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Statement of Cash Flows
<TABLE>
<CAPTION>
For the Period
February 13, 1998
For the Year (Commencement of
Ended Operations) Through
December 31, 1999 December 31, 1998
----------------------- -----------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (7,294,500) $ (3,029,511)
---------------------- -----------------------
Adjustments to reconcile net loss to cash
used in operating activities:
Decrease (increase) in other assets 200,519 (839,996)
Increase in deferred litigation
trustee fees 600,000 700,000
Increase in other liabilities 1,094,685 411,432
-------------------- -----------------------
Total adjustments 1,895,204 271,436
-------------------- -----------------------
Net cash used in operating activities (5,399,296) (2,758,075)
-------------------- -----------------------
Cash flows from financing activities:
Initial deposit into the expense fund - 19,884,294
-------------------- -----------------------
Net (decrease) increase in cash (5,399,296) 17,126,219
Cash at beginning of period 17,126,219 -
-------------------- -----------------------
Cash at end of period $ 11,726,923 $ 17,126,219
==================== =======================
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ - $ -
==================== =======================
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Notes to Financial Statements
December 31, 1999
(A) Summary of Significant Accounting Policies
Principles of Presentation
The Coast Federal Litigation Contingent Payment Rights Trust (the "CPR Trust")
is a statutory business trust created under Delaware law on January 8, 1998. The
CPR Trust was created by Coast in connection with its merger, effected on
February 13, 1998 (the "Merger"), with and into H. F. Ahmanson & Co.
("Ahmanson"), for the purpose of holding the Commitment Agreement entered into
by Ahmanson and the CPR Trust, dated as of February 13, 1998 (the "Commitment").
The Commitment represents Ahmanson's obligation to pay to the CPR Trust an
amount equal to any net after-tax proceeds, as more particularly defined in the
CPR Trust Agreement referred to below (the "Commitment Amount"), that may be
received by Coast's wholly-owned subsidiary, Coast Federal Bank, FSB ("Coast
Federal") (or its successor), from Coast Federal's regulatory capital litigation
claims against the United States government in the case entitled Coast Federal
Bank, FSB v. United States, No. 92-466C (Cl. Ct. filed July 9, 1992) (the
"Litigation"). Subsequent to the Merger, Ahmanson merged Coast Federal with and
into Ahmanson's wholly-owned subsidiary, Home Savings of America, FSB ("Home
Savings"), with Home Savings being the successor institution. Ahmanson merged
into Washington Mutual, Inc. ("WAMU") on October 3, 1998 and Home Savings was
thereafter merged into WAMU's wholly-owned subsidiary Washington Mutual Bank,
F.A. ("Washington Mutual").
The governing instrument of the CPR Trust is the Amended and Restated
Declaration of Trust, dated as of February 13, 1998 (the "CPR Trust Agreement"),
entered into among Coast, the Litigation Trustees, Bankers Trust Company (the
"Institutional Trustee") and Bankers Trust (Delaware) (the "Delaware Trustee").
Pursuant to the CPR Trust Agreement, the four senior executives of Coast with
knowledge of the facts underlying the Litigation were appointed as "Litigation
Trustees" of the CPR Trust, and were given full authority to make all decisions
on behalf of Coast Federal (and its successors) with respect to the prosecution
and resolution of the Litigation.
The assets of the CPR Trust consist solely of the Commitment and the right to
draw on amounts in the Expense Fund for purposes of funding expenses of the CPR
Trust, including expenses of the Litigation, fees and expenses of the Litigation
Trustees and all administrative expenses. Under the CPR Trust Agreement,
Ahmanson agreed to provide the sum of $19,884,294 (which is equal to $20 million
less expenses related to the Litigation incurred by Coast Federal between
September 1, 1997 and February 13, 1998) (the "Expense Fund") to fund the
Litigation and other expenses of the CPR Trust, which amount is to be reimbursed
to Ahmanson from any proceeds of the Litigation, including any amounts received
in settlement of the Litigation, prior to the payment of any amounts to holders
of the Contingent Payment Rights Certificates (the "CPR Certificates"). The
Expense Fund is on deposit in a non-interest bearing demand deposit account in
the name of the CPR Trust at Washington Mutual.
20
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Notes to Financial Statements (Continued)
December 31, 1999
Within 60 days of the receipt of any Commitment Amount, the CPR Trust is
required under the CPR Agreement to pay such amounts (other than $10 million or
such greater amount as the Litigation Trustees reasonably determine may be
reasonably likely to be required to pay additional expenses or to satisfy the
CPR Trust's indemnification obligations (the "Retained Amount")) less the amount
of any accrued but unpaid expenses payable by the CPR Trust but not covered by
the Expense Fund, to the holders of the CPR Certificates as of a record date to
be set by the Litigation Trustees. The Retained Amount will be retained for a
period of two years, or such longer period as the Litigation Trustees reasonably
determine may be required.
Cash
For purposes of reporting cash flows, cash includes the balance of the Expense
Fund described above.
Fair Value of Financial Instruments
Substantially all of the CPR Trust's financial instruments are carried at fair
value or amounts approximating fair value. Assets, including cash, are carried
at their fair value or contracted amounts, which approximate fair value due to
the relatively short term to maturity. Similarly, liabilities, including
accounts payable, are carried at amounts approximating fair value.
Use of Estimates
The Litigation Trustees have made a number of estimates and assumptions relating
to the reporting of assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported amounts of expenses in order to prepare these
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
(B) Other Assets
Other assets, as reported in the accompanying Statement of Financial Condition,
consists primarily of a prepaid insurance premium, having an unamortized balance
of $634,977 as of December 31, 1999, which covers the operations of the CPR
Trust for the anticipated life of the CPR Trust. The initial premium totaled
$1,002,596 and is being expensed over five years beginning in February 1998.
21
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Notes to Financial Statements (Continued)
December 31, 1999
(C) Expense Fund
The initial deposit into the Expense Fund (as described above) was determined as
follows:
Initial provision by Ahmanson $20,000,000
Pre-acquisition expenditures(1) by Coast Federal (76,759)
Pre-acquisition expenditures(1) paid by CPR Trust (38,947)
-----------
Initial deposit into the Expense Fund $19,884,294
===========
(1) Pre-acquisition expenditures include Litigation expenses which
were incurred prior to the Merger, whether paid by Coast Federal
or The CPR Trust.
The CPR Trust Agreement provides that interest on disbursements from the Expense
Fund be paid by the CPR Trust out of the Commitment Amount, and that such
interest shall be equal to the Reference Rate, as defined in the CPR Trust
Agreement, plus 250 basis points, compounded quarterly.
(D) Other Liabilities
Other liabilities, as reported in the accompanying Statement of Financial
Condition, consisted of the following as of the dates indicated.
December 31,
---------------------
1999 1998
---------- ---------
Accrued interest on deferred
Litigation Trustee Fees(1) $ 153,115 $ 36,024
Accrued interest on Expense
Fund disbursements(2) 745,002 165,275
Accrued expenses(3) 608,000 210,133
---------- --------
$1,506,117 $411,432
========== ========
(1) See Note F of Notes to Financial Statements.
(2) See Note C of Notes to Financial Statements.
(3) Include accrued legal, audit, expert witness, Litigation Trustee,
and trust administration fees.
(B) Certificateholders' Equity
Certificateholders' equity consists solely of the accumulated deficit generated
from the operations of the CPR Trust. The CPR Trust Certificates have no stated
or par value for financial statement purposes.
22
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Notes to Financial Statements (Continued)
December 31, 1999
(F) Litigation Trustee Fees
The CPR Trust Agreement provides that as compensation the CPR Trust will pay
each Litigation Trustee, during the term of his service as a Litigation Trustee,
fees of $400,000 per year for five years (except that if the Litigation is
sooner terminated, the remainder of such fees (but in no event with respect to a
period longer than the remainder of such year plus two additional years) will be
accelerated upon final resolution of the Litigation and receipt by Ahmanson of
the Litigation Proceeds), plus reimbursement of all reasonable out-of-pocket
expenses. If the services of the Litigation Trustees continue to be necessary
after the initial five-year period or such receipt of Litigation Proceeds, the
Litigation Trustees shall be entitled to a fee of $200 per hour until
termination of the CPR Trust. Pursuant to the CPR Trust Agreement, each
Litigation Trustee may, but is not obligated to, defer all or part of his
compensation until 30 days after the earliest to occur of (i) the date on which
he elected to defer such compensation, (ii) the date he ceases to be a
Litigation Trustee, and (iii) the date of the receipt of the Commitment Amount
in full by the CPR Trust. Any Litigation Trustee electing to so defer will
receive the compensation he would have received plus an amount, calculated on a
monthly basis during the period of deferral (and included in the amount
deferred), equal to the product of the monthly balance of the amount deferred
and an annual rate equal to the Reference Rate, as defined in the CPR Trust
Agreement, plus 250 basis points. For the year ending December 31, 1999,
Messrs. Martin, Hunt and Raiden elected to defer one-half of their 1999
compensation, and for the year ending December 31, 1998, each Litigation Trustee
elected to defer one-half of his 1998 compensation.
(G) Contingent Liabilities
The CPR Trust has no legal actions pending against it.
(H) Leases
The CPR Trust has entered into an operating lease agreement for office space
expiring in February 2003. Future minimum lease payments for the operating
lease as of December 31, 1999, were as follows:
Year ended December 31:
2000 $ 51,600
2001 51,600
2002 51,600
2003 8,600
--------
$163,400
========
The CPR Trust incurred lease expenses of $51,600 and $45,580 for the year ended
December 31, 1999, and the period February 13, 1998 (commencement of operations)
through December 31, 1998, respectively.
23
<PAGE>
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
Notes to Financial Statements (Continued)
December 31, 1999
(I) Selected Quarterly Financial Data (Unaudited)
The following is a summary of unaudited quarterly statements of operations for
the year ended December 31, 1999, and for the period February 13, 1998
(commencement of operations) through December 31, 1998:
<TABLE>
<CAPTION>
Quarter Ended
---------------------------------------------------------- Year Ended
March 31, June 30, September 30, December 31, December 31,
1999 1999 1999 1999 1999
------------- ------------ --------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net loss $(1,343,237) $(2,199,387) $(2,234,609) $(1,517,267) $(7,294,500)
Net loss per certificate (.06) (.11) (.11) (.07) (.35)
February 13, Quarter Ended February 13,
through --------------------------------------- through
March 31, June 30, September 30, December 31, December 31,
1998 1998 1998 1998 1998
------------ ----------- -------------- ----------- -----------
Net loss $ (312,617) $ (790,410) $ (904,411) $(1,022,072) $(3,029,511)
Net loss per certificate (0.02) (0.04) (0.05) (0.05) (0.15)
</TABLE>
24
<PAGE>
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
Information concerning the Litigation Trustees is set forth under Part II, Item
7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Management of the Litigation."
ITEM 11. EXECUTIVE COMPENSATION
Information concerning compensation of the Litigation Trustees is set forth
under Part II, Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Management of the Litigation."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is no holder of CPR Certificates known to the Trust to be the beneficial
owner of more than five percent of the outstanding CPR Certificates.
Following is a table which indicates as of March 3, 2000 the amount and percent
of beneficial ownership of the CPR Certificates for each Litigation Trustee and
all Litigation Trustees as a group. Each individual has sole voting and sole
investment power with respect to the number of CPR Certificates set forth
opposite his name.
Name of Beneficial Number of
Owner or Number of Certificates
Persons in Group (1) Beneficially Owned
- -------------------- ------------------
Ray Martin 135,375
Robert L. Hunt II 276,353
Norman H. Raiden 14,772
James F. Barritt 17,561
Four Litigation Trustees as a Group 444,061
________________
(1) Each of the Litigation Trustees owns less than 1% of the outstanding CPR
Certificates except for Mr. Hunt who owns 1.3%. The four Litigation Trustees as
a group own 2.1% of the outstanding CPR Certificates.
Pursuant to the CPR Trust Agreement, each of the Litigation Trustees is
obligated, as a condition of his continuation as a Litigation Trustee, to retain
not less than 50% of the CPR Certificates held by him as of the date of the
Merger, February 13, 1998, until the Litigation Proceeds are received by
Ahmanson or its successor. Transfers by a Litigation Trustee to his family
members or to any trust created for the benefit of his family shall be included
25
<PAGE>
in such 50% calculation for so long as these transferees retain the CPR
Certificates. As of February 13, 1998, Mr. Martin held 135,375 CPR Certificates,
Mr. Hunt held 76,353 CPR Certificates, Mr. Raiden held 42,772 CPR Certificates,
and Mr. Barritt held 17,561 CPR Certificates. As of March 3, 2000, the only
Trustee to have transferred any CPR Certificates is Mr. Raiden, who transferred
28,000 CPR Certificates to family members in December of 1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report:
1. Index to Financial Statements:
None.
2. Index to Financial Statements Schedules:
None.
3. Exhibits
4.1 Form of Amended and Restated Declaration of Trust of Coast Federal
Litigation Contingent Payment Rights Trust dated February 13,
1998(incorporated by reference to Exhibit 4.1 to the registrant's
Current Report on Form 8-K dated February 19, 1998).
10.1 Form of Commitment entered into between the registrant and H.F.
Ahmanson & Company (incorporated by reference to Exhibit 10.1 to the
registrant's Registration Statement on Form S-4).
10.2 Contingent Fee Agreement with Cooper, Carvin & Rosenthal,LLP dated
February 13, 1998 (incorporated by reference to Exhibit 10.1 to the
registrant's Quarterly Report on Form 10-Q for the period ending March
31, 1998).
27. Financial Data Schedule
Exhibits, except as otherwise indicated above, are filed herewith.
(b) Form 8-K
The Company did not file any Current Report on Form 8-K during the
quarter ended December 31, 1999.
26
<PAGE>
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, on the 28th day of March
2000.
COAST FEDERAL LITIGATION CONTINGENT PAYMENT RIGHTS TRUST
By:/s/ Ray Martin
--------------
Ray Martin
Litigation Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on the 28th day of March 2000.
/s/ Ray Martin
- ----------------
Ray Martin
Litigation Trustee
/s/ Robert L. Hunt II
- ----------------------
Robert L. Hunt II
Litigation Trustee
/s/ Norman H. Raiden
- - --------------------
Norman H. Raiden
Litigation Trustee
/s/ James F. Barritt
- - --------------------
James F. Barritt
Litigation Trustee
27
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 11,726,923
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,366,400
<CURRENT-LIABILITIES> 2,061,113
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (10,324,011)
<TOTAL-LIABILITY-AND-EQUITY> 12,366,400
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,597,681
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 696,819
<INCOME-PRETAX> (7,294,500)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,294,500)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,294,500)
<EPS-BASIC> (0.352)
<EPS-DILUTED> (0.352)
</TABLE>
