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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 29, 2000
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UICI
(Exact name of registrant as specified in its charter)
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Delaware 0-14320 75-2044750
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(State or other jurisdiction of incorporation (Commission File (IRS Employer
or organization) Number) Identification No.)
4001 McEwen Drive, Suite 200, Dallas, Texas 75244
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (972) 392-6700
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS
On September 29, 2000, UICI (the "Company" or "UICI") completed its
previously announced sale of substantially all of the non-cash assets associated
with its United CreditServ credit card business, including its credit card
receivables portfolios and its Sioux Falls, South Dakota servicing operations,
for a cash sales price of approximately $124.0 million.
While the sales price was less than originally projected, the shortfall
was offset by higher than projected cash collections on credit card receivables
made through the closing of the sale. In addition to the cash sales price
received at closing, the transaction contemplates an incentive cash payment
contingent upon the post-closing performance of the ACE credit card portfolio
over a one-year period. UICI continues to hold United CreditServ's building and
real estate in Sioux Falls, South Dakota, and has leased the facilities to the
purchaser pursuant to a long-term lease. UICI has also retained the right to
collect approximately $250 million face amount of previously written off credit
card receivables.
In connection with the sale, UICI or certain of its subsidiaries have
retained substantially all liabilities associated with its credit card business,
including liability for payment of all certificates of deposit issued by United
Credit National Bank (an indirect wholly-owned subsidiary of UICI), merchant
holdback liabilities, liabilities associated with pending litigation and other
contingencies. Following the sale, United Credit National Bank holds
approximately $96.0 million in available cash, cash equivalents and short term
U.S. Treasury securities and has approximately $79.0 million of certificates of
deposits outstanding. United Credit National Bank has initiated a program to
prepay all of its outstanding certificates of deposit and currently expects to
discharge all such deposit liabilities on or before October 31, 2000. United
Credit National Bank is in the process of preparing a formal voluntary plan of
liquidation to be filed with and approved by the Office of the Comptroller of
the Currency, and UICI currently anticipates that the voluntary liquidation of
United Credit National Bank, including the provision for all remaining
liabilities and distribution to UICI of all residual cash, will be complete on
or before year-end.
As previously disclosed, the Company and United Credit National Bank
are parties to separate lawsuits filed in February 2000 by American Credit
Educators, Inc. and American Fair Credit Association, Inc. organizations through
which United CreditServ formerly marketed its credit card programs (American
Credit Educators, LLC v. United Credit National Bank and UICI and American Fair
Credit Association, Inc. v. United Credit National Bank and UICI, each pending
in the United States District Court for the District of Colorado). On September
28, 2000, plaintiffs in the litigation filed motions to compel UICI to, among
other things, deposit a significant portion of the proceeds of the sale of
UICI's credit card business in escrow under court supervision. UICI believes
that the motions are wholly without merit and intends to oppose them vigorously.
A copy of the Company's September 29, 2000 press release is filed
herewith as Exhibit 99.1.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit
Number Description of Exhibit
99.1 Press release announcing completion of sale of substantially all of the
non-cash assets associated with UICI's United CreditServ credit card
business
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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.
UICI
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(Registrant)
Date October 2, 2000 By /s/ Gregory T. Mutz
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Gregory T. Mutz
President and Chief Executive
Officer
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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99.1 Press release announcing completion of sale of substantially
all of the non-cash assets associated with UICI's United
CreditServ credit card business
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