FORM 10-Q/A
AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission File Number 1-8052
TORCHMARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 63-0780404
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
2001 3rd Avenue South, Birmingham, Alabama 35233
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 325-4200
NONE
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) 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 the number of shares outstanding for each of
the issurer'sclasses of common stock, as of the latest
practicable date.
CLASS OUTSTANDING AT APRIL 30, 1994
Common Stock, $1.00 Par Value 72,414,730
Index of Exhibits (Page 12)
Total number of pages included are 13.
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PART II - OTHER INFORMATION
Item: 1. Legal Proceedings
This item is amended to update litigation disclosure.
As previously reported in the Form 10-K for the fiscal year
ended December 31, 1993, litigation was filed in May 1992 against
Liberty National Life Insurance Company ("Liberty National") in
the Circuit Court for Barbour County, Alabama (Robertson v.
Liberty National, Case No.: CV-92-021). This suit was amended in
October 1992 to include claims on behalf of a class of Liberty
National policyholders alleging fraud in the exchange of certain
cancer insurance policies. It seeks substantial equitable and
injunctive relief and unspecified compensatory and punitive
damages. A policyholder class was certified by the Barbour
County Court in March 1993. Additionally, subsequent to the
class certification, a number of individual lawsuits based on
substantially the same allegations as in Robertson were filed by
plaintiffs in Alabama, Georgia, Florida and Mississippi. Four
additional class action suits also based upon substantially the
same allegations as in Robertson were filed in Mobile County,
Alabama (Adair v. Liberty National, Case No.: 93-958 and Lamey v.
Liberty National, Case No.: CV 93-1256) and in Polk County,
Florida (Howell v. Liberty National, Case No.: GC-G 93-2023 and
Scott v. Liberty National, Case No.: GC-G 93-2415) after the
class certification. Lamey and Adair are presently stayed
pending the outcome of Robertson, and Howell and Scott are also
the subject of temporary stay orders. The individual post-class
certification lawsuits have been stayed as well.
On October 25, 1993, a jury in the Circuit Court for Mobile
County rendered a one million dollar verdict ($1,000 actual
damages) against Liberty in McAllister v. Liberty National, Case
No.: CV-92-4085, one of twenty-five suits involving cancer policy
exchanges which were filed prior to class certification in the
Barbour County litigation. Liberty filed appropriate post-
judgment motions and has appealed the McAllister verdict.
Previously, another judge in the Mobile County Court had granted
a summary judgment in favor of Liberty in another substantially
similar suit in which no cancer claims had been submitted
(Boswell v. Liberty National, Case No.: CV-92-3342), which was
appealed to the Alabama Supreme Court. On May 13, 1994, the
Alabama Supreme Court reversed and remanded Boswell holding that
the plaintiffs had alleged injury or damages in the form of the
additional policy premiums paid which were sufficient to
withstand a motion to dismiss. At this time, Liberty is
considering whether to file a petition for rehearing in the case.
The present Alabama Supreme Court decision does not give Liberty
any basis upon which to assess the likelihood or extent of any
adverse result in the case. However, the complaint does seek
punitive damages on behalf of seven plaintiff families in the
Circuit Court of Mobile County, and is pending in a forum where
substantial publicity adverse to Liberty has been generated in
connection with the McAllister v. Liberty National and Robertson
v. Liberty National cases, both of which are discussed herein and
in Torchmark's 1993 10-K and previous 10-Q filings.
The Robertson litigation was tentatively settled pending a
fairness determination by the Court after a hearing was held on
January 20, 1994. Class members were mailed notice of the
hearing and the proposed settlement.
On February 4, 1994, the Circuit Court for Barbour County,
Alabama ruled that with a $16 million increase in the value of
equitable and monetary relief contained in the proposed Robertson
settlement from approximately $39 million to $55 million, the
settlement would be fair and would be approved, provided that the
parties to the litigation accepted the amended settlement within
fourteen days of the issuance of the ruling. On February 17,
1994, the Court extended for two weeks the period for filing
objections to or accepting the court's order conditionally
approving the class action settlement. On February 22, 1994, the
Court entered an order in the Robertson litigation, which delayed
any final decision on the proposed class action settlement and
various motions to modify it (including motions to delete
Torchmark from the settlement release), pending certain specified
discovery to be completed within 90 days from the date the order
was entered. In the order, the Court directed limited additional
discovery regarding whether Torchmark had any active involvement
in the cancer policy exchanges. Pending completion of limited
additional discovery, the Court reserved jurisdiction and
extended the deadline for acceptance or rejection of the
modifications set forth in the February 4, 1994 order. On May 6,
1994, the Court entered an order in the Robertson litigation
setting a hearing on May 19, 1994 on all outstanding motions in
that case. At the hearing, intervenors were granted an
additional week to file materials with the Court. The Court
indicated that a final ruling is likely to be entered some time
thereafter.
In connection with orders of the Barbour County Circuit
Court, Torchmark provided for the $55 million proposed amended
settlement charge in its 1993 financial reports, although the
settlement has not been finally approved. Moreover, even if the
settlement is finally approved, Torchmark believes that it is
highly likely that intervenors will pursue an appeal of the
ruling to the Supreme Court of Alabama. In the event a
settlement is not agreed to and approved, the Robertson case will
be aggressively defended.
On March 17, 1994, litigation was filed against Liberty
National, a subsidiary of Torchmark, certain present and former
officers and directors of Torchmark, and KPMG Peat Marwick,
independent public accountants of Torchmark and its subsidiaries,
in the Circuit Court for Marion County, Alabama (Miles v. Liberty
National , Civil Action No. CV-94-67). The lawsuit asserts that
it is brought on behalf of a class composed of the shareholders
of Torchmark. The complaint alleges a failure to timely and
adequately report allegedly material contingent liabilities
arising out of insurance policy litigation involving Liberty
National and other subsidiaries. Compensatory and punitive
damages in an unspecified amount are sought.
In April 1994, the complaint in Miles was amended to add an
additional shareholder plaintiff and to name Torchmark as a
defendant. No class has currently been certified. Torchmark,
Liberty National and the individual
defendants intend to vigorously defend this action.
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SIGNATURES
Pursuant to the requirements of Section 12 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this Form 10-Q/A to be signed on its behalf by the undersigned,
thereunto duly authorized.
TORCHMARK CORPORATION
/s/ T. Randoph Fox
T. Randoph Fox, Vice President and
Assistant Treasurer
Date: May 25, 1994
