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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of event reported: June 22, 1999
DANIELSON HOLDING CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-6732 95-6021257
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(State of Incorporation) (Commission File (IRS Employer
Number) Identification No.)
767 Third Avenue, New York, New York 10017
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 888-0347
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Item 5. Other Events
Danielson Reinsurance Corporation ("Danielson Re"), an indirect wholly
owned subsidiary of Danielson Holding Corporation (the "Registrant"), is the
grantor of the Mission Reinsurance Corporation Trust (the "Trust"). The Trust
was one of several created in connection with the insolvency and reorganization
of Mission Insurance Group, Inc. and its subsidiaries from which the Registrant
emerged. In connection with the liquidation of the Trust by the Missouri
Department of Insurance (the "Insurance Department"), a surplus existed from
which the Insurance Department sought to pay interest to the claimants of the
Trust. The Registrant challenged the Insurance Department's plan to pay interest
in the Circuit Court of Jackson County, Missouri, which is overseeing the
liquidation of the Trust, arguing that any surplus belonged to Danielson Re as
the grantor of the Trust. The Circuit Court upheld the plan and the Registrant
appealed that decision.
On June 22, 1999, the Missouri Court of Appeals reversed the decision
of the Circuit Court and remanded the matter to the Circuit Court, ruling that
no interest can be paid to claimants of insolvent insurance companies under the
Missouri Insurance Code. As a result of that decision, Danielson Re would be
entitled to any surplus remaining in the Trust after payment of all claims and
expenses of the Trust. Although it does not know the specific amount of the
surplus currently in the Trust, the Registrant has reason to believe that the
surplus currently approximates $14 million.
The Registrant anticipates that the Insurance Department will appeal
the decision of the Court of Appeals to the Missouri Supreme Court, where the
decision could be reversed. In the event the decision is reversed and the
Insurance Department is permitted to pay interest on claims, it is anticipated
that there would be no surplus remaining in the Trust after payment of the
interest. It therefore cannot be determined at this time when, or if, the
Registrant would receive any proceeds from the Trust's surplus.
Item 7. Financial Statements and Exhibits
A. Exhibits
The following exhibit is filed as part of this report.
99.1 Press Release dated July 2, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
July 2, 1999 DANIELSON HOLDING CORPORATION
By: /s/ David M. Barse
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David M. Barse
President
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EXHIBIT INDEX
EXHIBIT PAGE
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NUMBER DOCUMENT NUMBER
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99.1 Press Release dated 5
July 1, 1999
<PAGE>
FOR IMMEDIATE RELEASE
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Contact: David M. Barse
President & Chief Operating Officer
212/888-0347
DANIELSON HOLDING CORPORATION ANNOUNCES POTENTIAL
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BENEFIT FROM MISSOURI COURT DECISION
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New York City - July 2, 1999
Danielson Holding Corporation (DHC-AMEX) announced today that
the Missouri Court of Appeals had reversed the Circuit Court of Jackson County
Missouri's decision to award interest on claims under a plan of distribution of
assets of the Mission Reinsurance Corporation Trust (the "Trust"). The effect of
the decision of the Court of Appeals may result in the return to Danielson of
the surplus existing in the Trust, which was one of the trusts that had been
created in connection with the insolvency and reorganization of Mission
Insurance Group, Inc. and its subsidiaries from which Danielson emerged.
Danielson Reinsurance Corporation ("Danielson Re"), an indirect wholly owned
subsidiary of Danielson, is the grantor of the Trust. In connection with the
liquidation of the Trust by the Missouri Department of Insurance (the "Insurance
Department"), a surplus existed from which the Insurance Department sought to
pay interest to the claimants of the Trust. Danielson challenged the Insurance
Department's plan to pay interest in the Circuit Court overseeing the
liquidation of the Trust, arguing that any surplus belonged to Danielson Re as
the grantor of the Trust. The Circuit Court upheld the plan and Danielson
appealed that decision.
On June 22, 1999, the Missouri Court of Appeals reversed the decision
of the Circuit Court and remanded the matter to the Circuit Court, ruling that
no interest can be paid to claimants of insolvent insurance companies under the
Missouri Insurance Code. As a result of that decision, Danielson Re would be
entitled to any surplus remaining in the Trust after payment of all claims and
expenses of the Trust. Although it does not know the specific amount of the
surplus currently in the Trust, Danielson has reason to believe that the surplus
currently approximates $14 million.
Danielson anticipates that the Insurance Department will appeal the
decision of the Court of Appeals to the Missouri Supreme Court, where the
decision could be reversed. In the event the decision is reversed and the
Insurance Department is permitted to pay interest on claims, it is anticipated
that there would be no surplus remaining in the Trust after payment of the
interest. It therefore cannot be determined at this time when, or if, Danielson
would receive any proceeds from the Trust's surplus. In accordance with
generally accepted accounting principals, Danielson has not reflected any
prospect of receiving funds from this matter as an asset on its balance sheet or
as income.
Danielson Holding Corporation is an American Stock Exchange
listed company, engaging in financial services.
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