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) September 10, 1996
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MAXICARE HEALTH PLANS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-12024 95-3615709
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(State or other jurisdiction (Commission (IRS Employer
of incorporation or File Number) Identification No.)
organization)
1149 South Broadway Street, Los Angeles, California 90015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (213) 765-2000
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Item 5. Other Events.
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Maxicare Health Plans, Inc. reported that it believes the
availability of its pre-change net operating loss
carryforwards ("NOLs") for federal income tax return
purposes has increased by approximately $216 million as
compared to amounts previously quantified as of December
31, 1995. This belief is based on a tax report received
from the Company's independent accountants, Ernst & Young
LLP, and the Company's understanding regarding the
application of Sections 382 and 383 of the Internal
Revenue Code of 1986, as amended (the "Code").
As a result of a "change of ownership" experienced by the
Company on December 5, 1990, the Company's pre-change NOLs
of approximately $325 million became subject to limitation
under Section 382 of the Code. The Company believes the
annual limitation under Section 382 of the Code for its
pre-change NOLs has increased from $6.3 million per year
to $9.2 million per year which represents an increase of
approximately $44 million over the carryover period from
$94 million to $138 million. In addition, the Company
believes approximately $182 million of additional pre-
change NOLs are currently available for federal income tax
return purposes as of December 31, 1995 under other
provisions of Section 382 of the Code. The pre-change NOLs
are subject to a fifteen year carryover period and expire
for federal income tax purposes in the years 2002 through
2005. In the event any of the pre-change NOLs are not
fully utilized in an annual period, the Company is allowed
to carryover such amounts to subsequent years during the
carryover period.
The Company believes approximately $320 million of the
total pre-change NOLs of $325 million will be available
for utilization for federal income tax return purposes
over the carryover period. The Company is unable to
quantify at this time to what extent it may be able to
fully utilize its remaining pre-change NOLs for federal
income tax return purposes prior to their expiration. From
December 5, 1990 through December 31, 1995 the Company has
utilized approximately $40 million of the pre-change NOLs
for federal income tax return purposes and has recognized
approximately $80 million of pre-change NOLs for financial
statement reporting purposes. The increase in pre-change
NOLs available for financial statement reporting purposes
has not been fully determined at this time. Should the
Company experience a second "change of ownership", the
limitations under Section 382 of the Code on pre-change
NOLs would be recalculated.
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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 hereunto duly authorized.
Maxicare Health Plans, Inc.
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(Registrant)
September 10, 1996 /s/ EUGENE L. FROELICH
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Eugene L. Froelich
Chief Financial Officer
and Executive Vice President -
Finance and Administration
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