===========================================================================
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 Report (Date of earliest event reported):
June 19, 1997
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
33-13142
Kentucky 33-15521 61-0244930
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
Kincaid Towers, Lexington, Kentucky 40507
(Address of principal executive offices) (Zip Code)
(606) 253-5111
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
===========================================================================
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
-----------------------------------------------------
and Exhibits.
------------
(a) Financial Statements.
--------------------
Filed with this report are the following documents of
Kentucky Central Life Insurance Company-In Liquidation:
(1) Financial statements as of September 30, 1997
prepared on a modified liquidating basis
(unaudited).
(2) Notes to financial statements which have been filed
with this Form 8-K.
-2-
<PAGE>
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 hereunto duly authorized.
Dated: June 18, 1998
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
By: /s/ George Nichols III
--------------------------------
George Nichols III, Commissioner
of the Kentucky Department of
Insurance, as Liquidator of
Kentucky Central Life Insurance
Company
-3-
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
IN LIQUIDATION
BALANCE SHEET
As of September 30, 1997
(UNAUDITED)
<TABLE>
ASSETS Notes
-----
<S> <C> <C> <C>
Cash: 5,28,29
Unrestricted $ 1,793,109
Restricted 561,448
----------
2,354,557
Short-term investments: 6,28
Unrestricted 76,482,372
Restricted 5,022,171
----------
81,504,543
Bonds: 7,28
Unrestricted 67,789,129
Restricted 9,846,225
----------
77,635,354
Mortgage loans 8 12,997,022
Real estate 9 65,287,922
Investment in M-C Realty, Inc. 10 3,098,299
Other invested assets 11 100,815
Accounts receivable 12 11,311
Federal income tax recoverable 13 0
Miscellaneous assets 14 41,547
Accrued investment income 1,830,921
-----------
Total Assets $244,862,290
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------
DISCLAIMER: The information contained in these financial
statements has been prepared by the Liquidator from information
available to or known by the Liquidator as of the date of the
financial statements; and is based upon records, information or
books available to the Liquidator. The completion and timing of
certain information is at the the total discretion of the
Liquidator. The Liquidator makes no warranty as to the accuracy
of the information or of the opinions or evaluations contained in
the financial statements and expressly disclaims any liability
arising from the statements of fact, evaluation or opinion
contained in the financial statements.
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
IN LIQUIDATION
BALANCE SHEET
As of September 30, 1997
(UNAUDITED)
LIABILITIES Notes
-----
<TABLE>
<S> <C> <C> <C>
Class 1
Guaranty associations' reimbursable
costs under the Plan 1,15 $ 3,200,000
Accrued administrative expenses 4,587,260
-----------
7,787,260
Class 2
Policy benefits 1 7,644,357
Opt-in reimbursable amount 1,16 109,784,800
Opt-in traditional amount 1,17 4,845
Guaranty associations' advances 1,18 48,914,806
Guaranty associations' post-closing costs 1,19 45,115,211
Liability to Opt-out policyholders 1,20 6,694,838
Opt-out reimbursable amount 1,21 2,127,334
-----------
220,286,191
Class 3
Claims of the federal government 31(a) 0
Class 4
Not evaluated
Class 5
ABN Amro Bank 22 50,323,634
General creditors 23 9,669,775
Escheat funds 488,552
Taxes payable 4,497,750
------------
64,979,711
Class 6
Not evaluated
Class 7
Not evaluated
Class 8 4
Policyholder deductible 17,082,993
General creditor deductible 33,127
Escheat funds deductible 2,500
Taxes payable deductible 2,250
------------
17,120,870
Class 9
Not evaluated
Class 10 24
Shareholder outstanding dividends
and fractional shares 666,224
Common capital stock:
Voting - par value, $100 per sh. 100,000
Class A non-voting - par value, $1 per sh. 13,314,830
Preferred dividends, Mid-Central 3 1,671,981
Preferred stock, Mid-Central 3 8,799,900
------------
24,552,935
Other Liabilities 31
Tenant security deposits 5 275,446
Tenant-In-Possession rental fund 28,29 2,268,299
------------
2,543,745
------------
Total Liabilities 337,270,712
(Deficiency) of Assets Over Liabilities (92,408,422)
------------
Total Liabilities and (Deficiency) $244,862,290
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------
DISCLAIMER: The information contained in these financial
statements has been prepared by the Liquidator from information
available to or known by the Liquidator as of the date of the
financial statements; and is based upon records, information or
books available to the Liquidator. The completion and timing of
certain information is at the total discretion of the Liquidator.
The Liquidator makes no warranty as to the accuracy of the
information or of the opinions or evaluations contained in the
financial statements and expressly disclaims any liability
arising from the statements of fact, evaluation or opinion
contained in the financial statements.
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
IN LIQUIDATION
STATEMENT OF RECEIPTS AND DISBURSEMENTS
For the Six and Nine Months Ended September 30, 1997
(UNAUDITED)
<TABLE>
Notes
-----
<S> <C> <C>
Receipts 2 4/1 - 9/30 YTD 9/30/97
- -------- ---------- ------------
Premium receipts $ (21,776) $ (29,086)
Rental receipts 2,934,097 3,594,714
Mortgage loans:
(a) Principal 527,570 572,308
(b) Interest 400,872 596,680
Proceeds from:
(a) Mortgage loans 0 1,110,000
(b) Real estate 2,526,986 5,633,986
(c) Other invested assets 1,002,864 1,023,798
Reinsurance recoveries 0 0
Agents' balances received 81,091 126,175
Collection of subsidiaries receivables 0 163,897
Recovery of taxes previously paid 0 32,187
Other miscellaneous receipts and changes 43,676 45,092
Transfer of cash 19,920,010 19,920,010
----------- -----------
Receipts before Investment Activities 27,415,390 32,789,761
----------- -----------
Interest and dividend receipts 1,137,709 1,975,860
Proceeds from Sales:
(a) Short-term investments 114,060,750 149,089,122
(b) Bonds 2,002,027 3,226,077
(c) Stocks 23,672 23,672
----------- -----------
Receipts from Investment Activities 117,224,158 154,314,731
----------- -----------
Tenant-In-Possession receipts 28,29 1,891,474 4,938,676
----------- -----------
Total Cash Receipts $146,531,022 $192,043,168
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------
DISCLAIMER: The information contained in these financial
statements has been prepared by the Liquidator from information
available to or known by the Liquidator as of the date of the
financial statements; and is based upon records, information or
books available to the Liquidator. The completion and timing of
certain information is at the total discretion of the Liquidator.
The Liquidator makes no warranty as to the accuracy of the
information or of the opinions or evaluations contained in the
financial statements and expressly disclaims any liability
arising from the statements of fact, evaluation or opinion
contained in the financial statements.
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
IN LIQUIDATION
STATEMENT OF RECEIPTS AND DISBURSEMENTS
For the Six and Nine Months Ended September 30, 1997
(UNAUDITED)
<TABLE>
Notes
-----
<S> <C> <C> <C>
Disbursements 2 4/1 - 9/30 YTD 9/30/97
- ------------- ---------- ------------
Losses/benefit payments 25 $11,804,286 $11,963,879
LAE payments 9,165 9,165
Legal fees 2,501,316 3,687,423
Audit fees 47,442 49,544
Receivers fees 111,747 148,228
Consulting fees 1,599,472 2,152,005
Commissions (12,840) (5,435)
Salaries 387,150 522,619
Employee benefits 14,403 24,199
Payroll and other taxes 124,975 609,134
Rent and related expenses 111,878 1,628,011
Office expenses and miscellaneous 221,660 280,198
Interest expense 839,855 839,855
------------ ------------
Total Disbursements 17,760,508 21,908,826
------------ ------------
Distributions:
(a) Distributions of assets 26 37,699,888 37,699,888
(b) Early access distributions
------------ ------------
Distributions 37,699,888 37,699,888
------------ ------------
Disbursements & Distributions Before
Investment Activities 55,460,396 59,608,714
------------ ------------
Investment expenses 27 380,494 583,432
Purchase of:
(a) Short-term investments 100,506,841 142,589,040
(b) Bonds 0 0
(c) Stocks 0 0
(d) Mortgage loans 4,833 168,079
------------ ------------
Disbursements for Investment Activities 100,892,168 143,340,551
------------ ------------
Tenant-In-Possession disbursements 28,29 2,335,930 2,988,651
------------ ------------
Total Cash Disbursements 158,688,494 205,937,916
============ ============
Net Increase (Decrease) in Cash (12,157,472) (13,894,748)
Cash at April 1 and January 1, 1997 14,512,029 16,249,305
------------ ------------
Cash at September 30, 1997 5 $2,354,557 $2,354,557
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------
DISCLAIMER: The information contained in these financial
statements has been prepared by the Liquidator from information
available to or known by the Liquidator as of the date of the
financial statements; and is based upon records, information or
books available to the Liquidator. The completion and timing of
certain information is at the total discretion of the Liquidator.
The Liquidator makes no warranty as to the accuracy of the
information or of the opinions or evaluations contained in the
financial statements and expressly disclaims any liability
arising from the statements of fact, evaluation or opinion
contained in the financial statements.
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
IN LIQUIDATION
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
1. Reorganization and Reinsurance of the Life and Health
-----------------------------------------------------
Insurance Assets of Kentucky Central Life Insurance Company and
- ---------------------------------------------------------------
Order of Liquidation - On February 12, 1993, Kentucky Central
- --------------------
Life Insurance Company ("Kentucky Central" or the "Company") was
placed into rehabilitation by an order of the Franklin Circuit
Court ("Court") after a determination by the Commissioner of the
Kentucky Department of Insurance that such action was necessary
for the protection of the Company's policyholders. On February
9, 1994, after a thorough investigation regarding rehabilitating
versus liquidating the Company, the Commissioner, in his capacity
as Rehabilitator of Kentucky Central, filed a motion for
reorganization and reinsurance of the Company's life and health
assets and a petition of liquidation with the Court.
On August 18, 1994, the Court issued an order approving the
motion of the Rehabilitator for Reorganization and Reinsurance of
the Company's life and health assets with Jefferson-Pilot Life
Insurance Company ("JP Life"). (The Rehabilitator's Plan of
Reorganization and Reinsurance together with the Guaranty
Association Participation Agreement By and Among the National
Organization of Life and Health Insurance Guaranty Associations
and the Participating State Life and Health Insurance Guaranty
Associations and Kentucky Central Life Insurance Company Acting
By and Through Don W. Stephens, Insurance Commissioner of the
Commonwealth of Kentucky, As Rehabilitator and Liquidator of KCL
and Jefferson Pilot Life Insurance Company are hereinafter
collectively referred to as the "Plan.") In conjunction
therewith, the Court issued an order terminating the
rehabilitation and directing the liquidation of the Company (the
"Order"). The Company was ordered into liquidation following a
determination by the Court that the Company was insolvent and
that rehabilitation of the Company was not feasible. The Order
was affirmed by the Supreme Court of Kentucky on May 11, 1995.
The key element of the Rehabilitator's Plan of
Reorganization and Reinsurance, the transfer to JP Life of most
of the Company's assets in exchange for JP Life's agreement to
assume and "enhance" the life insurance policies and annuity
contracts previously issued by the Company, was closed on May 31,
1995. All policyholders of the Company were given the right, if
they chose to do so, to keep their life insurance and annuity
contracts, and immediately become policyholders of JP Life; such
policyholders are referred to herein as "Opt-ins." Those
policyholders who elected not to have their policies transferred
are referred to herein as "Opt-outs."
In consideration for JP Life's assumption of the liabilities
for Opt-ins, the Company transferred bonds, short-term
securities, cash, policy loans and certain miscellaneous assets
with a total estimated value of $762,862,093 to JP Life on the
date of closing.
<PAGE>
Policyholders representing approximately 95% of the total policy
values in force opted into the Plan and were transferred to JP
Life on the date of closing.
The life insurance guaranty associations of the states where
the Company was licensed to do business transferred assets
consisting of cash and notes with a total value of $109,986,918
to JP Life in connection with the closing. Such assets, along
with an enhancement added by JP Life, were used to restore the
policy values of Opt-ins whose policies were covered by one of
the guaranty association funds to their full amount as recorded
by the Company as of the closing date and for uncovered
policyholders restructured account values to the extent supported
by the assets. In return for this advancement of assets on
behalf of covered policyholders, the state guaranty associations
obtained what is now a class 2 priority claim against the
Company. The shortfall on uncovered policies was calculated at
closing to be $11,231,328.
Under the Plan, the Company retains a liability to Opt-ins
over and above the amount of their full policy value as of the
closing date. The ultimate amount of this liability, referred to
as the Reimbursable Amount, depends on the interest rates from
February 12, 1993 until a date five years from closing (i.e., May
31, 2000), and on the persistency of Opt-in policies during the
five-year period after closing.
Policyholders representing approximately 5% of the total
policy values in force opted out of the Plan. The Company is
obligated to pay these policyholders their proportionate share of
the Company's assets up to the full amount of their statutory
reserve as of February 12, 1993, plus any additions to their
policy values from premiums paid and less any deductions to their
policy values subsequent to that date. The full amount of such
obligation to Opt-outs was approximately $57 million. The Plan
calls for the Company to pay these amounts in three installments.
The first installment, equivalent to 75% of the total opt-out
amount, was due, and paid, 120 days after closing. The second
installment was paid June 23, 1997.
Assets not transferred to JP Life remained with the Company
and are being liquidated by the Commissioner of the Kentucky
Department of Insurance who has been designated as the Liquidator
of the Company. The Liquidator is vested by operation of law
with the title to all of the Company's property, contracts, and
rights of action, and may recover and reduce all such assets to
possession and liquidate them in accordance with the terms of the
Order and applicable law. The court has ordered the Liquidator
to liquidate the remaining assets of the estate as rapidly and
economically as he can. As these assets are liquidated, they
will be utilized to repay the guaranty associations and to make
-2-
<PAGE>
policyholders whole. The remaining assets of the Company, if
any, will be distributed to other creditors and shareholders in
the priority established by statute.
Pursuant to the terms of the Plan, $50,000,000 from the
assets of Kentucky Central was disbursed on February 13, 1996.
Of this amount $41,039,878 reduced the liability to the Guaranty
Associations on the Guaranty Associations' advances, $3,557,738
was applied to reduce policy benefits due uncovered policies and
$2,291,194 was applied to the Opt-in Traditional liability. The
remaining $3,111,190 was later distributed to Opt-out
policyholders.
In a similar transaction, $40,000,000 was distributed from
the assets of the Company in May and June 1997. Of this amount,
$32,890,768 reduced the liability to the Guaranty Associations on
the Guaranty Associations' advances, $2,774,651 was applied to
reduce policy benefits due uncovered policies and $1,834,469 was
applied to the Opt-in Traditional liability. The remaining
$2,500,112 was distributed to Opt-out policyholders on June 23,
1997.
2. Basis of Presentation - The accompanying financial
---------------------
statements of Kentucky Central Life Insurance Company (In
Liquidation) are unaudited. The balance sheet has been prepared
on a modified liquidating basis, that is, assets have been
reported at their estimated market value when known, otherwise,
they are reported on the basis more particularly described
herein. The financial statements are presented generally in a
format established by the National Association of Insurance
Commissioners ("NAIC") Report on Receiverships.
With regard to the liabilities, for the purposes of these
financial statements, the liabilities have been preliminarily
classified in accordance with the statutory scheme set forth in
Chapter 304 of the Kentucky Revised Statutes, Subtitle 33,
Section 430. The classifications and amounts are subject to
further review and change, and the Liquidator is not bound or
prejudiced by the classification of the liabilities on the
financial statements as the process for reviewing the liabilities
and claims is ongoing. Claims filed in the amount of
$1,418,345,521 are not reflected on the financial statements.
See footnote number 31(b) for additional information regarding
these claims.
The Statement of Receipts and Disbursements is prepared on a
cash basis. Since the Company has been in both rehabilitation
and liquidation, the books and records were not organized in such
a manner to facilitate the accounting of receipts and
disbursements on a cash basis from the date of rehabilitation.
-3-
<PAGE>
The information contained in these financial statements has
been prepared by the Liquidator from information available to or
known by the Liquidator as of the date of the financial
statements. The Liquidator makes no warranty as to the accuracy
of the information or of the opinions or evaluations contained in
the financial statements and expressly disclaims any liability
arising from the statements of fact, evaluation or opinion
contained in the financial statements.
3. Ownership and Affiliated Companies - The common stock of
----------------------------------
Kentucky Central consists of two classes: Voting and Class A
Non-voting. The Class A Non-voting common stock is publicly held
and was traded on the NASDAQ stock market until removed from
listing in April 1993. Further, Kentucky Central owns 100% of
the common stock of Mid-Central Investment Co., Inc. ("Mid-
Central"). While the Company's investment in Mid-Central has
previously been reported on the financial statements of Kentucky
Central on an equity basis, effective September 30, 1997, the
assets and liabilities of Mid-Central have been combined with the
assets and liabilities of Kentucky Central consistent with the
Liquidator's position regarding the true nature of these assets
and liabilities under the Insurers Rehabilitation and Liquidation
Law, KRS 304.33-010 et seq. The preferred stock of Mid-Central
is not owned by Kentucky Central, and the owners of said stock
have filed claims with the Liquidator. The Liquidator has
classified these claims, together with the related accrued
dividends, as a Class 10 liability.
4. Order of Distribution - The order of distribution from the
---------------------
assets of the Company's estate is set forth at KRS 304.33-430. An
amendment of the statute went into effect July 15, 1996. By its
express terms, the statute applies and governs the priority of
distribution of assets in any proceeding to liquidate an insurer
pending on the effective date of the statute. Accordingly, the
order of distribution of Kentucky Central's assets is governed by
the statute, as amended.
The statute, as amended, provides as follows:
Section 1. The order of distribution of claims from
the insurer's estate shall be as stated in this
section. The first fifty dollars ($50) of the amount
allowed on each claim in the classes under subsections
(2) to (6), inclusive, of this section, shall be
deducted from the claim and included in the class under
subsection (8) of this section. Claims may not be
cumulated by assignment to avoid application of the
fifty dollars ($50) deductible provision. Subject to
the fifty dollars ($50) deductible provision, every
claim in each class shall be paid in full or adequate
-4-
<PAGE>
funds retained for the payment before the members of the
next class receive any payment. No subclasses shall be
established within any class. No claim by a shareholder,
policyholder, or other creditor shall be permitted to
circumvent the priority classes through the use of equitable
remedies.
(1) Administration costs. The costs and expenses of
administration, including but not limited to the
following: the actual and necessary costs of
preserving or recovering the assets of the
insurer; compensation for all services rendered in
the liquidation; any necessary filing fees; the
fees and mileage payable to witnesses; and
reasonable attorneys' fees.
(2) Loss and unearned premium claims. Claims by
policyholders, beneficiaries, and insureds arising from
and within the coverage of and not in excess of the
applicable limits of insurance policies and insurance
contracts issued by the company, and liability claims
against insureds which claims are within the coverage
of and not in excess of the applicable limits of
insurance policies and insurance contracts issued by
the company, and claims of guaranty associations or
foreign guaranty associations. Notwithstanding the
foregoing, the following claims shall be excluded from
Class 2 priority:
(a) Obligations of the insolvent insurer arising out
of reinsurance contracts;
(b) Obligations incurred after the expiration date of
the insurance policy or after the policy has been
replaced by the insured or canceled at the
insured's request or after the policy has been
canceled as provided in this chapter.
Notwithstanding this subsection, earned premium
claims on policies, other than reinsurance
agreements, shall not be excluded;
(c) Obligations to insurers, insurance pools, or
underwriting associations and their claims for
contribution, indemnity or subrogation, equitable
or otherwise;
(d) Any claim which is in excess of any applicable
limits provided in the insurance policy issued by
the insolvent insurer;
-5-
<PAGE>
(e) Any amount accrued as punitive or exemplary
damages unless expressly covered under the terms
of the policy; and
(f) Tort claims of any kind against the insurer, and
claims against the insurer for bad faith or
wrongful settlement practices.
(3) Claims of the federal government other than those
claims included in Class 2.
(4) Wages.
(a) Debts due to employees for services performed, not
to exceed one thousand dollars ($1,000) to each
employee which have been earned within one (1)
year before the filing of the petition for
liquidation. Officers shall not be entitled to
the benefit of this priority.
(b) This priority shall be in lieu of any other
similar priority authorized by law as to wages or
compensation of employees.
(5) Residual classification. All other claims including
claims of the federal or any state or local government,
not falling within other classes under this section.
Claims, including those of any governmental body, for a
penalty or forfeiture, shall be allowed in this class
only to the extent of the pecuniary loss sustained from
the act, transaction or proceeding out of which the
penalty or forfeiture arose, with reasonable and actual
costs occasioned thereby. The remainder of such claims
shall be postponed to the class of claims under
subsection (8) of this section.
(6) Judgments. Claims based solely on judgments. If a
claimant files a claim and bases it both on the
judgment and on the underlying facts, the claim shall
be considered by the liquidator who shall give the
judgment such weight as he deems appropriate. The
claim as allowed shall receive the priority it would
receive in the absence of the judgment. If the
judgment is larger than the allowance on the underlying
claim, the remaining portion of the judgment shall be
treated as if it were a claim based solely on a
judgment.
(7) Interest on claims already paid. Interest at the legal
rate compounded annually on all claims in the classes
-6-
<PAGE>
under subsections (1) to (6) of this section,
inclusive, from the date of the petition for
liquidation or the date on which the claim becomes due,
whichever is later, until the date on which the
dividend is declared. The liquidator, with the
approval of the court may make reasonable
classifications of claims for purposes of computing
interest, may make approximate computations and may
ignore certain classifications and time periods as de
minimis.
(8) Miscellaneous subordinated claims. The remaining
claims or portions of claims not already paid, with
interest as in subsection (7) of this section:
(a) The first fifty dollars ($50) of each claim in the
classes under subsections (2) to (6), inclusive,
of this section, subordinated under this section;
(b) Claims under subsection (2) of KRS 304.33-380;
(c) Claims subordinated by KRS 304.33-600;
(d) Claims filed late;
(e) Portions of claims subordinated under subsection
(5) of this section; and
(f) Claims or portions of claims, payment of which is
provided by other benefits or advantages recovered
or recoverable by the claimant.
(9) Preferred ownership claims. Surplus or contribution
notes, or similar obligations, and premium refunds on
assessable policies. Interest at the legal rate shall
be added to each claim, as in subsections (7) and (8)
of this section.
(10) Proprietary claims. The claims of shareholders or
other owners.
Section 2. Section 1 of this Act shall apply to and govern
the priority of the distribution of assets in any proceeding
to liquidate an insurer pending on or commenced on or after
the effective date of the Act.
The liabilities on the accompanying balance sheet are presented
in accordance with the order of distribution set forth in the
amended statute.
-7-
<PAGE>
5. Cash - As of September 30, 1997, Kentucky Central had cash
----
on deposit in banks of $2,354,557 of which $561,448 was
restricted as tenant security deposits and the tenant-in-
possession rental fund. The tenant security deposits of $275,446
include deposits of $265,234 on real estate owned by the Company
and deposits of $10,212 held by the Company on behalf of the
Tenant-in-Possession.
6. Short-term investments - Short-term investments consisted of
----------------------
the following: certificates of deposit in the amount of $366,800,
money market accounts in the amount of $6,752,478, U.S. Treasury
Bills equal to $24,025,538 and a Dreyfus Cash Management Fund in
the amount of $50,359,726. Approximately $1,390,196 of the money
market accounts and $1,282,877 of the T-Bills are being held by
or on behalf of various state departments of insurance.
Certificates of deposit for $366,800 are held as collateral to
secure letters of credit which guarantee contract performance on
properties owned by the Company. Additionally, the Dreyfus Cash
Management Fund is being held by LaSalle National Bank
("LaSalle") in connection with the sale/leaseback of Kincaid
Towers. This transaction is described in detail in footnote
number 28.
7. Bonds - Bonds in the amount of $77,635,354 are principally
-----
stated at their market value as obtained from published
information concerning the market value of such bonds. The bond
values are not based upon valuations published by the NAIC
---
Committee on Valuation of Securities. Certain Fayette County,
Kentucky revenue bonds and Kentucky Development Finance Authority
bonds with a par value of $16,800,000 are included in the total
at their book value of $16,800,000 as their market value is not
readily ascertainable.
Additionally, bonds with a market value of $9,846,225 are
being held by or on behalf of the following state departments of
insurance: Colorado, Massachusetts, Minnesota, North Carolina
and South Carolina. Further, bonds of $43,565,444 are being held
by LaSalle National Bank in connection with the sale/leaseback of
Kincaid Towers. Again, this transaction is described in detail
in footnote number 28.
8. Mortgage Loans - Mortgage loans on real estate are not
-------------- ---
stated at their market value as of September 30, 1997, but are
stated at the lower of their unpaid principal balance or at the
appraised value of the underlying collateral. The appraisals
being used were primarily obtained on varying dates in 1993 and
early 1994. Further, the mortgage loans are reported net of
$350,831, the estimated costs to dispose of the loans.
9. Real Estate - Real estate is stated at its estimated market
-----------
value as of September 30, 1997, based on appraisals obtained
between 1993 and 1997. Additionally, the total of the real estate
-8-
<PAGE>
is reported less estimated disposition costs of $5,677,211.
In April 1997, the Company dissolved three wholly-owned
subsidiaries and transferred the property owned by the
subsidiaries to real estate. These former subsidiaries were:
Bluebonnet Hotel, Inc., Elk Grove Village Hotel, Inc. and 101
North Plaza Drive, Inc.
10. Investment in M-C Realty, Inc. - At September 30, 1997, the
------------------------------
Company owned 100% of the common stock of M-C Realty, Inc.
("M-C"). M-C owns 100% of the common stock of Wilkinson Hotel
Enterprises, Inc. ("WHE"). WHE is a 1% general partner and M-C
is a 95% limited partner in Wilkinson Hotels, Ltd. Wilkinson
Hotels Ltd. is the owner and operator of the Capital Plaza Hotel
in Frankfort, Kentucky.
The Company's investment in M-C is reported on an equity
basis. The primary asset of M-C is the hotel and its furniture
and fixtures. As of September 30, 1997, the hotel and its
furniture and fixtures had an appraised value equal to
$8,500,000.
The primary liabilities of M-C include bonds which were
payable at December 15, 1997 in the amount of $5,400,000, a
second mortgage in the amount of $300,622 held by Kentucky
Economic Development Finance Authority and $531,001 due on a
Community Development Block Grant issued by the City of
Frankfort. The Company holds the bonds while Central Bank &
Trust Company is the Trustee. The Liquidator has entered into an
agreement with the Trustee of the bonds and the holder of the
second mortgage which permits Wilkinson Hotels, Ltd. to continue
to make interest and other payments on the bonds and the mortgage
through December 15, 1998.
Prior to September 30, 1997, M-C and certain current and
former affiliates of M-C filed refund claims for corporate taxes
paid to the Commonwealth of Kentucky for the 1991-94 tax years.
The total amount of refunds sought is $1,132,166. The Revenue
Cabinet has not yet stated its position as to payment of these
refunds. The probability of collection of the refunds is unknown
at this time. Accordingly, the refund claims are not reflected
on the balance sheet as of this date.
11. Other Invested Assets - The Company has an investment in
---------------------
Centennial Business Development Fund, Ltd. in the amount of
$99,411. This amount represents the Company's equity in the
partnership, net of unrealized gains or losses. This amount does
not purport to reflect the market value of the Company's
investment. Additionally, the Company has an investment in
Colonial Commercial Corporation and Golden Gem Growers, Inc. The
total market value of the Company's investment is $1,404.
-9-
<PAGE>
The Company is also a 99% partner in two rental property
ventures styled Fred Burns Limited Partnerships I and II. The
value to the Company of these investments, if any, is dependent
upon the outcome of pending litigation. Due to the inherent
uncertainty involved with litigation, it was deemed inappropriate
to place any value upon these interests at this time.
12. Accounts Receivable - This includes amounts due the Company
-------------------
for phone services provided to occupants of Kincaid Towers.
13. Federal Income Tax Recoverable - The Company filed amended
------------------------------
federal income tax returns on September 13, 1996 for the 1989-91
tax years requesting funds of $18,502,455 plus interest. The
amended returns were filed on the basis that certain Treasury
Regulations were invalid. The Treasury Regulations at issue
prevent the carryback of life subgroup losses to offset nonlife
subgroup income on a consolidated return. The Company filed suit
in the United States District Court for the Eastern District of
Kentucky on May 5, 1997 in order to collect the refund claims.
The case is still pending at this time. The probability of
collection of the refund claims is unknown at this time.
Accordingly, no amount is shown for the refund claims on the
balance sheet as of this date.
14. Miscellaneous Assets - This amount consists of a utility
--------------------
deposit of $2,000 for property owned by the Company in Frankfort,
Kentucky, $26,615 of notes receivable which were collected after
the statement date, and capital equity credits in Golden Gem
Growers, Inc. in the amount of $12,932.
No value has been reflected on the balance sheet for Agents
Debit Balances, Furniture & Fixtures and Other Receivables and
Prepaid Expenses due to the fact that realization of the value of
the accounts is unlikely. However, collection activities
continue on all accounts due the Company and any unused fixed
assets will be disposed of at the appropriate time. The net book
value of the accounts as of September 30, 1997 was as follows:
Agents Debit Balances - $6,405,231, Furniture & Fixtures -
$85,357 and Other Receivables and Prepaid Expenses - $16,966,042.
15. Guaranty Associations' Reimbursable Costs under the Plan -
--------------------------------------------------------
This is an estimate by the guaranty associations of their
administrative costs under the Plan. The Guaranty Associations
have incurred additional costs since submitting this estimate
which are also reimbursable under the Plan. While the additional
costs are likely to be several million dollars, no additional
amount is reflected in the financial statements because the
additional expenses have not been reviewed and agreed to by the
Liquidator.
-10-
<PAGE>
16. Opt-in Reimbursable Amount - This liability is a combination
--------------------------
of the following: reimbursement for the reduced account values
resulting from the difference in the rate credited to
policyholders from February 12, 1993 to May 31, 1995 versus the
new money rate as described in the Plan, reimbursement for the
reduced account values resulting from non-contractual expenses
charged by JP Life during the moratorium period subsequent to the
closing as required by the Plan and reimbursement of reduced
account values resulting from lower than market credited interest
rates applied by JP Life during the moratorium period subsequent
to the closing as required under the Plan.
17. Opt-in Traditional Amount - Under the Plan, JP Life agreed
-------------------------
to credit KCL Traditional Life policyholders with the difference
between their restructured and unrestructured account values if
JP Life was reimbursed this amount. Accordingly, this liability
represents the amount owed to JP Life for the Traditional Life
policyholders.
18. Guaranty Associations' Advances - This amount, together with
-------------------------------
accrued interest at the rate set forth in the Plan, is the amount
that the guaranty associations paid JP Life on behalf of Kentucky
Central to cover the short-fall in assets that were transferred
to JP Life at closing.
19. Guaranty Associations' Post-closing Costs - This is an
-----------------------------------------
estimate of the guaranty associations continuing support costs
through the five-year Plan period, together with accrued interest
at the rate set forth in the plan.
20. Liability to Opt-out Policyholders - On May 31, 1995,
----------------------------------
policyholders which elected to opt-out of the Plan surrendered
their policies to Kentucky Central. The calculation of policy
account values for opt-out liabilities was prepared pursuant to
the Plan approved by the Court. The first payment (75% of the
opt-out payment) was made within 120 days of Closing. The second
payment (12.5% of the opt-out payment) was made two years after
closing. The balance (12.5% of the opt-out payment) is to be
disbursed with interest four years after closing.
21. Opt-out Reimbursable Amount - This liability is the
---------------------------
difference between the amounts scheduled to be paid to Opt-out
policyholders using the opt-out percentage as defined in the Plan
versus 100% of the statutory reserve as of February 12, 1993
adjusted for policy loans and interim period amounts.
22. ABN Amro Bank - This amount represents the principal
-------------
allegedly due ABN Amro Bank, N.V., ("ABN") according to its Proof
of Claim filed May 1, 1995. In addition, ABN claims interest,
fees, costs and expenses in an amount totaling $6,198,889.13, as
-11-
<PAGE>
of that date. As of September 30, 1997, to secure this alleged
debt ABN holds both securities, subject to the Court's control as
described elsewhere herein, having a value as of that date of
$93,925,170, plus a mortgage on and an assignment of rents of the
tenants of Kincaid Towers. This claim of ABN is subject to
litigation described elsewhere herein contesting among other
issues all amounts due and owing whether in the form of
principal, interest, fees, costs, or expenses. Additionally, the
Liquidator seeks return of the securities pledged to secure
payment of such amounts. See footnote numbers 28 and 29 for
further explanations.
23. General Creditors - This liability consists primarily of
-----------------
amounts due to agents under a deferred compensation agreement
formerly maintained by the Company.
24. Other Equity Claims - The amounts reflected as Class 10
-------------------
claims include the book value of the shareholders' common stock
and additional paid-in-capital ($13,414,830), the outstanding
dividends and fractional shares related to the common stock
($666,224), the book value of the preferred stock of Mid-Central
($8,799,900) and the related accrued dividends ($1,671,981).
These balances do not reflect the potential claims of current and
former Kentucky Central shareholders who may allege that they
purchased and/or sold their stock based on misstated financial
statements and does not reflect any other legal claims to which
the shareholders may be entitled and which may or may not be
included in the $1.4 billion of claims described herein. Such
claims may be substantially in excess of the balances reflected.
25. Losses/Benefit Payments - This amount includes payments made
-----------------------
to policyholders with claims occurring prior to May 31, 1995 and
continuing claims on credit insurance and payments made to Opt-
out policyholders.
26. Distribution of Assets - As described in footnote 1,
----------------------
$40,000,000 was distributed from the assets of the Company in May
and June 1997 for policyholder-related liabilities. However, the
Statement of Receipts and Disbursements reflects "Distributions
of assets" equal to $37,699,888. The difference is due, in part,
to the 1997 distribution to Opt-out policyholders of $2,500,112.
This amount is included in the "Losses/Benefit Payments" account.
Additionally, the "Distributions of assets" account reflects a
$200,000 payment to the official unsecured creditors' committee
of Burnett & Associates in The Official Unsecured Creditors'
---------------------------------
Committee v. Kentucky Central Insurance Company, et al., U.S.
- -------------------------------------------------------
Bankruptcy Court, E.D. Ky., Adversary No. 95-5024. This payment
was made in settlement of a claim by the unsecured creditors'
committee for an alleged preferential payment received by
Kentucky Central Insurance Company from Burnett & Associates.
-12-
<PAGE>
27. Investment Expenses - This expense is generally related to
-------------------
the operation and maintenance of the Company's investments in
bonds and real estate.
28. Kincaid Towers - In 1987, Kentucky Central "sold" Kincaid
--------------
Towers, which is two office towers, an adjoining six floor
parking garage and two other smaller parcels located in downtown
Lexington, Kentucky, to a newly created entity, KCL Funding,
Inc., in exchange for $52.6 million. KCL Funding, Inc. financed
the purchase through the issuance of commercial paper backed by a
standby letter of credit issued by ABN AMRO Bank, N.V. As
security for its letter of credit, ABN AMRO received a mortgage
on Kincaid Towers. Kentucky Central then leased the property
from KCL Funding. The term of the sale/leaseback was five years.
Under the terms of the sale/leaseback, KCL Funding could
"put" the Kincaid Towers back to Kentucky Central and require
Kentucky Central to repurchase Kincaid Towers for the original
purchase price, less any principal reduction.
In January 1992, ABN AMRO notified Kentucky Central that it
would not extend the letter of credit beyond the expiration of
the original term of the transaction which was February 20, 1992.
Thus, Kentucky Central needed to obtain approximately $51 million
by February 20, 1992. Thereafter, an agreement was reached
whereby ABN AMRO did extend the letter of credit (eventually
until November 1992) but in exchange for the "pledge" of more
than $65 million of Kentucky Central's securities which were
transferred to a custodial account at LaSalle National Bank
("LaSalle"), a wholly owned subsidiary of ABN AMRO.
The Liquidator has demanded the return of the securities but
ABN AMRO and LaSalle have refused. As of September 30, 1997,
short-term investments and bonds with a total market value of
$93,925,170 are in the possession of LaSalle. As a result, a
Complaint was filed naming ABN AMRO, LaSalle, KCL Funding, and
Kincaid, Wilson, Schaeffer, Hembree, Van Inwegen & Kinser as
defendants.
On August 8, 1996, the Liquidator filed a motion to compel
ABN AMRO and LaSalle to return securities (short-term
investments and bonds) to the Liquidator for the benefit of the
Estate which would have a value in excess of that value of
securities necessary to secure the obligation, if any, of
Kentucky Central to ABN AMRO to repurchase Kincaid Towers.
Pursuant to this motion, the Liquidator is seeking the return of
securities which have a value of approximately $49 million and is
seeking the return of these securities unencumbered by any claim
by any defendant in the litigation. The Court took the
Liquidator's motion under submission, and on September 25, 1997,
denied the motion. Further
-13-
<PAGE>
details of the litigation, George Nichols III, as Liquidator for
-------------------------------------
Kentucky Central v. ABN AMRO Bank, N.V., et al, Franklin Circuit
- ----------------------------------------------
Court, Civil Action No. 93-CI-00196-AP-004, are included in the
summary portion of each Report to the Court filed on a periodic
basis in Franklin Circuit Court.
29. Tenant-In-Possession Rental Fund - From March 1994 through
--------------------------------
August 1996, Kentucky Central deposited monthly payments under
its lease with KCL Funding in an account at Central Bank & Trust
Company. Those deposits totaled $14,709,510.
The Liquidator filed a motion and on July 22, 1996, the
Franklin Circuit Court ruled that Kentucky Central need not
transfer the deposits to ABN AMRO and that the issue of whether
Kentucky Central owes such payments under the lease agreement
will be determined in the litigation described in footnote number
28. Subject to that same Order, the Company is required to pay
rent in an amount equal to the fair market rent for the space it
actually occupies.
The Franklin Circuit Court further ruled that all rent
collected from occupants of Kincaid Towers shall be deposited in
an account ("the Rental Fund") and will be utilized under certain
procedures and conditions for the operation, maintenance and
capital improvements of Kincaid Towers. These financial
statements reflect a liability to the Rental Fund for the rental
income (cash) received in excess of the disbursements related to
the property. On September 30, 1997, the amount in the Rental
Fund equaled $2,268,299. A monthly report which details the
activity of the Rental Fund is filed with the Court under seal.
30. Liability to Opt-in Policyholders - The Plan creates a
---------------------------------
liability to policyholders for the difference between
policyholder account values as calculated before and after
restructuring. The liability to Opt-in policyholders was reduced
at closing by amounts paid to JP Life for the benefit of the
policyholders by the guaranty associations on behalf of Kentucky
Central (and such reduction is currently shown as a liability to
the guaranty associations). The Plan also calls for a discharge
of the liability to Opt-in policyholders upon an order by the
Court after several events have occurred. It is currently
anticipated that the entire amount of this liability
(approximately $249 million) will ultimately be discharged by the
Court. Therefore, no dollar amount is included in the financial
statement.
31. Contingent Liabilities
----------------------
(a) Income Taxes - The Company may have a tax liability for
------------
Phase III taxable income. Phase III taxable income results from
certain reductions to the Company's "policyholders' surplus
-14-
<PAGE>
account." The policyholders' surplus account is an untaxed
income account that was accumulated under prior tax law. It is
the Company's contention, supported by tax case law, that the
Company will not have any federal tax liability related to
reductions in this account. If a liability is found to exist,
the tax is estimated to be between $2.1 and $2.6 million.
Additionally, any such tax liability will increase the amount by
which the Company's liabilities exceed its assets.
(b) Claims Filed - Claims in the amount of $1,418,345,521
------------
have been filed against Kentucky Central pursuant to the claims
process required under KRS 304 Subtitle 33. The majority of
these claims are not reflected in the financial statements as
they are in the process of being reviewed. However, a few of the
known claims are reflected. While a number of the claims may be
rejected and disallowed, to the extent these claims are proven
valid, they will have the effect of increasing the amount by
which the Company's liabilities exceed its assets for the claims
which are not already recorded as liabilities. Additionally,
interest will accrue at the legal rate on those claims which are
proven valid; such interest is a class 7 liability.
The Liquidator cautions that under KRS 304.33-360(2),
certain claimants may assert valid claims after the expiration of
the claims bar date. Further, under KRS 304.33-360(1), certain
claims - specifically, preferred ownership and proprietary claims
under subsections (9) and (10) of KRS 304.33-430 and claims for
unearned premiums and cash surrender values or other investment
values in life insurance and annuities - are not required to be
filed. Thus, total claims asserted against the Liquidator may
actually be in excess of the amounts set forth above. The extent
of any such additional liability is uncertain at this time.
(c) Pending Litigation - A summary of the litigation in
------------------
which the Company is a party is included in each Report to the
Court filed on a periodic basis in Franklin Circuit Court. The
claims of litigants against the Company have not been analyzed
for financial reporting purposes. Accordingly, no judgment has
been made as to whether the Company will have any liability to
the litigants or the amount, if any, of such liability.
-15-
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
(IN LIQUIDATION)
As of September 30, 1997
(UNAUDITED)
<TABLE>
CASH
- ---- AMOUNT
------
<S> <C>
UNRESTRICTED:
IN COMPANY OFFICE $ 330
REAL ESTATE PROPERTY MANAGER ACCOUNTS 550,381
CENTRAL BANK, LEXINGTON, KY 1,238,988
CENTRAL BANK, LEXINGTON, KY 3,410
---------
TOTAL $1,793,109
=========
RESTRICTED:
MEADOW GREEN CONDO, TENANT SECURITY DEPOSIT $ 12,000
TERRACE GREEN CONDO, TENANT SECURITY DEPOSIT 6,058
VILLA GREEN CONDO, TENANT SECURITY DEPOSIT 4,753
FALCON CREST CONDO, TENANT SECURITY DEPOSIT 15,239
PALM LAKE SHOPPING CTR, TENANT SECURITY DEPOSIT 27,619
GUADALUPE PLAZA, TENANT SECURITY DEPOSIT 12,245
BLUEBONNET OFFICE BLDG, TENANT SECURITY DEPOSIT 10,000
UNIVERSITY PARK TOWERS, TENANT SECURITY DEPOSIT 171,920
CENTRAL BANK & TRUST CO., TENANT SECURITY DEPOSITS 15,012
CENTRAL BANK & TRUST CO., TENANT-IN-POSSESSION 286,002
CENTRAL BANK & TRUST CO., TENANT SECURITY DEPOSIT 600
---------
TOTAL $ 561,448
=========
$2,354,557
</TABLE>
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
(IN LIQUIDATION)
As of September 30, 1997
(UNAUDITED)
SHORT-TERM INVESTMENTS
- ----------------------
<TABLE>
AMOUNT
------
<S> <C>
UNRESTRICTED:
CENTRAL BANK TRI-PARTY ACCOUNT $1,128,672
PNC BANK FIDELITY TREASURY FUND #696 4,233,610
U.S. TREASURY BILL - MATURES 10/23/97 2,990,169
U.S. TREASURY BILL - MATURES 11/20/97 4,963,941
U.S. TREASURY BILL - MATURES 12/11/97 4,949,012
U.S. TREASURY BILL - MATURES 01/15/98 2,956,051
U.S. TREASURY BILL - MATURES 02/19/98 4,901,190
LASALLE BANK DREYFUS CASH MANAGEMENT FUND 50,359,726
----------
TOTAL $76,482,372
==========
RESTRICTED:
CERTIFICATE OF DEPOSIT - SECURING LETTER OF CREDIT $ 16,800
UNITED CAROLINA BANK - NORTH CAROLINA DEPOSIT 760,871
FUNDS HELD BY ARKANSAS DEPARTMENT OF INSURANCE 100,000
FUNDS HELD BY NEW MEXICO DEPARTMENT OF INSURANCE 100,000
FUNDS HELD BY S. CAROLINA DEPARTMENT OF INSURANCE 79,325
U.S. TREASURY BILL - MATURES 01/02/98 -
S. CAROLINA DEPT OF INS 1,282,877
FUNDS HELD BY COLORADO DEPARTMENT OF INSURANCE 250,000
FUNDS HELD BY GEORGIA DEPARTMENT OF INS - BILTMORE FUND 100,000
U.S. TREASURY BILL - MATURES 10/30/97 -
TENANT-IN-POSSESSION 1,982,297
CERTIFICATES OF DEPOSIT - AS PER FRANCHISE AGREEMENT 350,000
----------
TOTAL $5,022,171
==========
$81,504,543
</TABLE>
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
(IN LIQUIDATION)
BONDS
As of September 30, 1997
(UNAUDITED)
<TABLE>
<C> <S> <C> <C> <C>
UNRESTRICTED: MATURITY PAR
CUSIP # ISSUER RATE DATE VALUE
912827J78 UNITED STATES TREAS NTS 6.250 02/15/03 925,000
912827K43 UNITED STATES TREAS NTS 5.500 04/15/00 200,000
912827ZN5 UNITED STATES TREAS NTS 8.500 11/15/00 200,000
448814DM2 HYDRO-QUEBEC 9.400 02/01/21 1,000,000
341081DA2 FLORIDA PWR< 7.875 12/01/12 2,000,000
341081DC8 FLORIDA PWR< 7.875 01/01/13 1,000,000
371154AJ4 GENL TEL NO WEST 8.750 04/15/16 1,803,000
482620AH4 K N ENERGY 9.625 08/01/21 2,000,000
893526BY8 TRANSCANADA PIPELINES 9.875 01/01/21 2,000,000
001920AD9 ARCO CHEMICAL 10.250 11/01/10 1,250,000
013716AJ4 ALCAN ALUMINUM 8.875 01/15/22 2,000,000
019512AD4 ALLIED SIGNAL 9.875 06/01/02 2,500,000
023771Q27 AMERICAN AIRLINES CORPORATION 11.000 05/07/14 2,000,000
039483AG7 ARCHER DANIELS 8.875 04/15/11 1,100,000
122014AC7 BURLINGTON RESOURCES 9.875 06/15/10 2,000,000
136440AL8 CANADIAN PACIFIC LTD 9.450 08/01/21 2,000,000
191219AN4 COCA-COLA ENTERPRISE 8.500 02/01/12 2,000,000
247361FA1 DELTA AIR LINES INC. 10.050 06/16/05 2,022,000
247361PT9 DELTA AIRLINES, INC. 10.000 05/19/09 1,000,000
247361PU6 DELTA AIRLINES, INC. 10.000 05/19/09 500,000
247361PV4 DELTA AIRLINES INC. 10.000 05/26/09 500,000
277461AQ2 EASTMAN KODAK CO 9.875 11/01/04 2,000,000
277461AS8 EASTMAN KODAK CO 9.750 10/01/04 1,000,000
423328AH6 HELLER & CO 9.375 03/15/98 2,000,000
482584AP4 KMART 7.750 10/01/12 1,500,000
891027AB0 TORCHMARK 8.625 03/01/17 350,000
891027AB0 TORCHMARK 8.625 03/01/17 1,000,000
87265CAU4 TRW INC MTN 9.375 04/15/21 2,000,000
893485AJ1 TRANSAMERICA CP 9.875 01/01/98 2,000,000
962166AK0 WEYERHAEUSER 8.375 02/15/07 1,500,000
49126NAC9 KENTUCKY DEV. FINANCE AUTH.B 5.340 12/15/97 5,400,000
528851AE8 LEXINGTON-FAYETTE COUNTY KEN 7.750 05/01/02 15,000
528851AF5 LEXINGTON-FAYETTE COUNTY KEN 7.750 05/01/03 75,000
528851AG3 LEXINGTON-FAYETTE COUNTY KEN 7.750 05/01/04 80,000
528851AH1 LEXINGTON-FAYETTE COUNTY KEN 7.750 05/01/05 90,000
528908AM8 LEXINGTON-FAYETTE URBAN CO 5.000 02/01/18 797,532
528914AC8 LEXINGTON FAYETTE URBAN COUNTY 5.860 05/01/20 11,400,000
912827K43 UNITED STATES TREAS NTS 5.500 04/15/00 500,000
TOTAL 61,707,532
MARKET VALUE -Unrestricted 67,789,129
RESTRICTED: MATURITY PAR
CUSIP # ISSUER RATE DATE VALUE
3135865J4 FEDERAL NATL MTG ASSN 7.300 07/10/02 1,100,000
31359CAL9 FEDERAL NATL MTG ASSN 6.400 01/13/04 3,000,000
912810CE6 UNITED STATES TREAS BONDS 8.750 11/15/08 300,000
912827K43 UNITED STATES TREAS NTS 5.500 04/15/00 100,000
912827ZN5 UNITED STATES TREAS NTS 8.500 11/15/00 750,000
603823WV3 MINNEAPOLIS & ST. PAUL, M 8.950 01/01/22 2,000,000
891027AB0 TORCHMARK 8.625 03/01/17 250,000
891027AB0 TORCHMARK 8.625 03/01/17 2,000,000
TOTAL 9,500,000
MARKET VALUE -Restricted 9,846,225
MARKET VALUE -TOTAL 77,635,354
</TABLE>
The accompanying notes are an integral part of these financial statements.
- --------------------------------------------------------------------------
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
(IN LIQUIDATION)
As of September 30, 1997
(UNAUDITED)
MORTGAGE LOANS
LOAN NO. LOAN TITLE/OWNER PROPERTY
MAILING ADDRESS ADDRESS
6355 Webb Bros. Woodlands
Woodland Apts. Lexington, Kentucky
6462 Madison, Arlene Scruggs 500 Hollow Creek Road #27
P. O. Box 11881 Lexington, Kentucky
Lexington, Kentucky 40578
6531 Delaplain Development Company 110 Triport Road
P. O. Box 974 Georgetown, Kentucky
Georgetown, KY 40234
6712 Moore Properties of Tampa, Inc. 102 East Tyler Street
6712A P. O. Box 406 Tampa, Florida
Tampa, FL 33601
6778 Cohen, Harry S. & Arlene 1165-1169 Centre Parkway
1165 Centre Parkway Lexington, Kentucky
Lexington, KY 40517
6840 Webb Properties 565, 575 & 585 W. Main St.
3000 Lexington Financial Center Lexington, Kentucky
Lexington, KY 40507
6877 Fred Burns Limited Partnership I 1053 Winburn Drive
3341 Post Road Lexington, Kentucky
Lexington, KY 40503
6878 Fred Burns Limited Partnership II 1840 McCullough Drive
3341 Post Road Lexington, Kentucky
Lexington, KY 40503
Total Value $13,347,853
Less: Estimated Sales Cost (350,831)
----------
Statement Value $12,997,022
==========
The accompanying notes are an integral part of these financial statments.
- -------------------------------------------------------------------------
<PAGE>
KENTUCKY CENTRAL LIFE INSURANCE COMPANY
IN LIQUIDATION
REAL ESTATE
As of September 30, 1997
(UNAUDITED)
ASSET Description and Location of Property
No.
4201 Meadow Green Condos, Lexington, KY
4202 Terrace Green Condos, Lexington, KY
4203 Villa Green Condos, Lexington, KY
4204 Falcon Crest Condos, Lexington, KY
4225 Land, Baton Rouge, LA
4230 Land, McAllen, TX
4246 Palm Lake Shopping Center, Tampa, FL
4265 Vine Center Condo 2005, Lexington, KY
4281 Industrial Bldg, Goldrush Dr, Lexington, KY (sold 11/97)
4282 Jordan Plating Bldg, Georgetown, KY
4283 Guadalupe Plaza, Albuquerque, NM
4285 Travelodge, Marina, CA (sold 1/98)
4291 Rio Bravo Shopping Center, Albuquerque, NM
4293 Vine Center Condo 2205, Lexington, KY
4294 Bluebonnet Villas, Baton Rouge, LA
4295 Bluebonnet Office Bldg, Baton Rouge, LA
4296 Bluebonnet Flex Bldg, Baton Rouge, LA
4297 Men's Wearhouse, McAllen, TX
4299 One Gateway Plaza, Colorado Springs, CO
4307 Retail Center, McAllen, TX
4308 TEC Office Bldg, McAllen, TX
4309 Stein Mart Bldg., McAllen, TX
4310 Cinemark Theater Bldg, McAllen, TX
4312 Office Bldgs, 1100 US 127 South, Frankfort, KY
4313 Whse, 1045 Georgetown St, Lexington, KY
4314 Office Bldg & Parking Lot, Upper/Main St, Lexington, KY
4315 University Park Towers, Miramar, FL (sold 10/97)
4316 Arby's (H&S Food Services), US 460, Georgetown, KY
4317 Comfort Inn, Elk Grove Village, IL (sold 1/98)
4318 Quality Suites (Bluebonnet Hotel), Baton Rouge, LA
4319 Traxx (101 N Plaza Dr), Nicholasville, KY (sold 2/98)
4320 Land (Kentucky Barkley), Georgetown, KY
4444 Vine Center Condo 2001, Lexington, KY
Total Value $70,965,132
Less: Estimated Sales Costs (5,677,211)
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Statement Value $65,287,922
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The accompanying notes are an integral part of these financial statements.
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