FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________ to _______________
Commission File Number 0-12450
CAPITAL INDUSTRIES, INC.
(By the Capital Industries Liquidating Trust)
(Exact name of registrant as specified in its charter)
INDIANA 35-6624860
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
263 Sioux Circle, Noblesville, Indiana 46060
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code:
(317) 773-1010
Securities Registered Pursuant to Section 12(b) of the Act:
NONE
Securities Registered Pursuant to Section 12(g) of the Act:
N/A
(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 (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. [x] YES NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405,
Regulation S-K (ss. 229.405 of this chapter) 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 this Form 10-K.
The aggregate market value of the issuer's voting stock held by non-affiliates,
as of December 31, 1997, was $__________ N/A.
The number of shares of the Registrant's Common Stock, without par value,
outstanding as of December 31, 1997, was 0 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The Annual Report to unitholders for the year ended December 31, 1997, is
included herein as Part II.
Page 1 of 13 Pages
<PAGE>
This Form 10-K is being filed by the Capital Industries Liquidating
Trust (the "Trust") under the filing codes and Commission file number of Capital
Industries, Inc ("Capital Industries"). Capital Industries dissolved on April
24, 1996 and filed a Form 15 on June 27, 1996 following the formation of the
Trust and the distribution of all of Capital Industries' assets to its
shareholders and the Trust. However, pursuant to discussions with the
Commission's Staff in connection with the Commission's review of the proxy
materials related to the liquidation of Capital Industries and the formation of
the Trust, the Trust agreed to file its audited financial statements with the
Commission under cover of Form 10-K using the file number of Capital Industries,
without necessarily complying with the other requirements of Form 10-K. The
audited financial statements of the Trust are included herein in Part II and the
Financial Data Schedule is included herewith as Exhibit 27. The remaining
information required by Form 10-K is not included in this Form 10-K.
<PAGE>
Item II Annual Report to Unitholders
CAPITAL INDUSTRIES LIQUIDATING TRUST
Financial Statements
For the Year Ended December 31, 1997
<PAGE>
Report of Independent Accountants
To the Unitholders
Capital Industries Liquidating Trust
We have audited the accompanying statement of net assets in liquidation of
Capital Industries Liquidating Trust as of December 31, 1997, and the related
statements of changes in net assets in liquidation, and cash flows for the year
then ended. These financial statements are the responsibility of 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 audit provides a reasonable basis for our opinion.
As described in Note 1, Capital Industries Liquidating Trust was established to
liquidate the remaining assets and liabilities of Capital Industries, Inc. Upon
dissolution of the Company. As a result, the financial statements are prepared
on a liquidation basis of accounting.
In our opinion, the financial statements referred to above present fairly, in
all materials respects, the net assets in liquidation of Capital Industries
Liquidating Trust as of December 31, 1997, and the changes in its net assets in
liquidation and its cash flows for the year then ended, in conformity with
generally accepted accounting principles applied on the basis of accounting
described in the preceding paragraph.
/s/ Coopers & Lybrand L.L.P.
Indianapolis, Indiana
January 19, 1998
-1-
<PAGE>
Capital Industries Liquidating Trust
Statement of Net Assets in Liquidation
as of December 31, 1997
Assets
Cash and cash equivalents $ 78,759
Assets held by HCT Trust (Note 3) 515,672
Land and land improvements 125,520
Building 191,880
--------
Total assets 911,831
--------
Liabilities
Accounts payable and other accrued expenses 11,677
--------
Total liabilities 11,677
--------
Net assets $900,154
========
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
Capital Industries Liquidating Trust
Statement of Changes in Net Assets in Liquidation
for the year ended December 31, 1997
Income (loss)
Rental $ 60,000
Interest 35,949
Income tax refund 15,126
Miscellaneous 346
Expected loss on disposal of Jacksonville
property and excess land (Note 6) (246,500)
-----------
Total loss (135,079)
Expenses:
Trustee expenses 27,851
Depreciation expense 10,350
Other 5,348
-----------
Total liabilities 43,549
-----------
Decrease in net assets from trust operations (178,628)
Net assets, beginning of period 1,393,459
Distribution to beneficiaries (314,677)
-----------
Net assets, end of period $ 900,154
===========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
Capital Industries Liquidating Trust
Statement of Cash Flows
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Cash flows from operating activities:
<S> <C>
Decrease in net assets from operations $(178,628)
Depreciation 10,350
Expected loss on disposal of Jacksonville property and excess land 246,500
Adjustments to reconcile decrease in net assets from operations to
net cash used in operating activities:
Decrease in other current assets 506
Decrease in assets held by HCT Trust 262,602
Decrease in accrued expenses (23,677)
---------
Net cash flows provided by operating activities 317,653
---------
Cash flows from financing activities:
Distribution to unitholders (314,677)
---------
Net cash flows used in financing activities (314,677)
---------
Net increase in cash 2,976
Cash, beginning of period 75,783
---------
Cash, end of period $ 78,759
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
Capital Industries Liquidating Trust
Notes to Financial Statements
1. Formation of Capital Industries Liquidating Trust:
Haygood Limited Partnership (Haygood) and Capital Industries, Inc.
(Capital) entered into an Asset Purchase and Sale Agreement on July 17,
1995, as amended September 28, 1995, (the Agreement) whereby Capital
agreed to sell to Haygood substantially all of the assets associated
with Capital's wholly owned subsidiary Truckpro Parts and Service, inc.
(Truckpro).
Upon divestiture of Truckpro, Capital established the Capital
Industries Liquidating Trust (the Trust) on April 24, 1996. Capital
transferred all remaining assets and liabilities previously owned or
owed to the Trust, and Capital was effectively liquidated. On April 24,
1996, the transferred assets were valued according to the results of an
independent appraisal.
The purpose of the Trust is to liquidate the Trust estate in a manner
calculated to conserve and protect the Trust estate and to collect and
distribute the income and proceeds to the Trust beneficiaries in a
prompt and orderly fashion after payment for expenses. The Trust will
continue until all distributions of the Trust estate are completed or
at April 24, 1999, whichever occurs first.
2. Summary of Significant Accounting Policies:
a. Liquidation Basis of Accounting: These financial statements
are prepared on a liquidation basis of accounting which is in
conformity with generally accepted accounting principles for
entities in liquidation. All assets and liabilities are valued
at fair market value.
b. Building and Land Improvements: Building and land improvements
are depreciated using the straight-line method over the useful
lives of the assets, estimated to be 20 years for land
improvements and 40 years for the building. Expenditures for
improving or rebuilding an existing asset which extends the
useful life of the asset are capitalized.
c. Use of Estimates in the Preparation of Financial Statements.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions affecting the reported
amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expense
during the reporting period. Actual amounts could differ from
the estimated amounts.
d. Rental Income: Haygood is currently leasing the Jacksonville,
Florida, property owned by the Trust for $5,000 per month.
This rental income is recognized when earned by the Trust.
e. Income Taxes: The Trust qualifies as a grantor trust under
Internal Revenue Code Sections 671-679 and similar state tax
codes. As such, the Trust is not subject to federal and state
income taxes on its income. The income and expenses of the
Trust are passed through to and are reportable by the
beneficiaries for income tax reporting purposes.
-5-
<PAGE>
3. HCT Trust Agreement:
In accordance with the Agreement, a trust was created (HCT Trust) to
provide a source of funds for indemnification claims made by Haygood,
if any. Upon satisfaction of any claims made by Haygood, the assets of
HCT Trust will revert to the Trust. The HCT Trust Agreement between and
among Capital, Truckpro, and Haygood was entered into as of September
28, 1995.
Assets owned by HCT Trust as of December 31, 1997 are comprised of
$284,469 of restricted cash and $231,203 of interest-bearing notes
receivable due January 1, 1998 from HD America, Inc. (HDA), a truck
parts buying cooperative.
Significant provisions of the HCT Trust Agreement are summarized below:
a. The HCT Trust shall commence on the execution date and have a
term of three years, and will terminate on September 30, 1998.
b. The HCT Trust was not established for the purpose of
continuing or engaging in the conduct of a trade or business.
c. In a consent to assignment, HDA has indicated to the Trust and
Haygood its willingness to consent to an assignment of both
the certificates and the proceeds of the certificates to the
HCT Trust, and subsequently to Haygood, and to make payments
under the certificates either to the HCT Trust or Haygood
following such assignments, provided the certificates remain
nonnegotiable following each such assignment and all debts to
HDA have been paid in full.
d. Provided there are no outstanding claims reported by Haygood
to the trustees of the HCT Trust as of the release of funds
date, the trustees shall, upon written notice, distribute the
funds and accrued earnings contained in the HCT Trust to the
Trust on December 31, 1996, December 31, 1997, and the third
anniversary of the closing. In accordance with these terms,
HCT Trust distributed $296,236 and $284,369 to the Trust on
January 6, 1997 and January 14, 1998, respectively. There are
currently no such claims being asserted by Haygood.
e. On the termination date, if no claims for indemnification
remain outstanding, Haygood will purchase the remaining unpaid
HDA note from the trustees of the HCT Trust. When all notes
have been redeemed, the remaining cash balance will be
distributed to the Trust.
4. Environmental Liability:
Capital was identified as a "potentially responsible party" for cleanup
of environmental pollution which occurred on the Jacksonville, Florida,
property owned by Capital. The liability for Capital's share of the
cleanup costs was transferred to the Trust. On May 20, 1997, the Trust
received a letter from the Florida Department of Environmental
Protection that the site was inspected and the Trust is released from
any further obligation to conduct rehabilitation at the site unless
subsequent discharge of petroleum products occurs at the site.
Management believes that adequate provision has been made for all
obligations.
-6-
<PAGE>
5. Beneficiaries of the Trust:
The Trust agreement provides that at least annually, and on such other
times as may be determined, the cash and noncash assets comprising a
portion of the Trust Estate may be distributed tithe Beneficiaries of
the Trust.
On January 14, 1997, the Trust paid $314,677 as a distribution to
unitholders of the Trust. With 273,632 units outstanding, the
distribution represented an amount of $1.15 per unit.
An additional distribution of $342,050 was made to unitholders of the
Trust on January 8, 1998, which represented a distribution of $1.25 per
unit.
6. Subsequent Event:
In January 1998, the Trustees accepted an offer of $345,000 for the
Jacksonville property an excess land. If completed, the transaction
would result in a loss on disposal, including commission costs, of
approximately $246,500. In accordance with SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, the expected loss of $246,500 is reflected in the
statement of changes in net assets in liquidation for the year ended
December 31, 1997.
-7-
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on behalf of the undersigned, thereto duly authorized.
CAPITAL INDUSTRIES LIQUIDATING TRUST
Date: March 5, 1998 By: /s/ Paul A. Shively
----------------------------------
Paul A. Shively, Trustee
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
TRUST'S AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000726593
<NAME> Capital Industries Liquidating Trust
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 78,759
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 78,759
<PP&E> 317,400
<DEPRECIATION> 0
<TOTAL-ASSETS> 911,831
<CURRENT-LIABILITIES> 11,677
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> (135,079)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 43,549
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (178,628)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
