<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
<TABLE>
<S> <C>
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
Commission File Number 0-13881
CITY INVESTING COMPANY LIQUIDATING TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
Delaware 13-6859211
(STATE OF ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
99 University Place, 7th Floor,
New York, New York 10003-4528
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
Registrant's telephone number, including area code: (212) 473-1918
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Units of Beneficial Interest
(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. Yes X No
--- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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. X
---
At December 31, 1996, there were 38,979,372 Trust Units of Beneficial Interest
outstanding. The aggregate market value of the Trust's Units of Beneficial
Interest held by non-affiliates of the Trust based on the closing price of the
Units on such date of $0.9375 per Unit was approximately $36.5 million.
<PAGE>
<PAGE>
To Our Unit Holders:
The accompanying financial statements set forth the status of the City Investing
Company Liquidating Trust (the 'Trust') at December 31, 1996. Wrapped around
this report is the January 15, 1997 tax letter, pages A through D, that provides
1996 Federal income tax information relevant to Unit Holders. Please remove the
outside wrap-around page carefully, as it should be helpful in calculating your
1996 tax consequences.
The Trust has posted on its newly instituted world wide web site:
http://www.cnvlz.com the financial statements and the tax letter. Quarterly
financial statements will be available on the Trust's world wide web site no
later than May 15, August 15, and November 15, 1997.
During 1996, the Trust's cash and cash equivalents, investment securities and
restricted funds increased to $60,266,069. The increase in cash and cash
equivalents and investment securities in 1996 is the result of an increase in
interest earned on the investment of investment securities and cash equivalents
in 1996 and the receipt of royalty and rental income from real estate. The Trust
also realized a long term gain of $81,390 on the April 15, 1996 sale of
approximately two per cent of its real estate.
The major assets held by the Trust at this time are investments in U.S.
Treasuries with original maturities within one year of purchase. The Trustees
believe that these resources are sufficient to meet all anticipated liquidity
requirements. The Trust will continue to retain substantial cash and investment
reserves pending the resolution of certain legal proceedings discussed in the
accompanying report.
Since the Trust was created, the Trust's objectives have been and continue to be
maximizing the return to its Unit Holders and completing the liquidation of all
assets and liabilities as efficaciously as possible. We made progress in 1996
and are continuing in 1997 to take all practical steps to resolve the remaining
litigation facing the Trust.
Cordially,
<TABLE>
<S> <C> <C>
Geo. T. Scharffenberger Eben W. Pyne Lester J. Mantell
Trustee Trustee Trustee
</TABLE>
January 15, 1997
For all information about UNIT HOLDINGS:
UNITS HELD IN STREET NAME, please communicate with your bank or broker.
REGISTERED UNIT HOLDERS, please communicate with ChaseMellon Shareholder
Services, transfer agent for City Investing Company Liquidating Trust, at:
<TABLE>
<S> <C>
telephone: 1-800-851-9677
write to: ChaseMellon Shareholder Services
450 West 33rd Street, 15th Floor
New York, NY 10001-2697
world wide web site: http://www.cmssonline.com
</TABLE>
For current FINANCIAL AND TAX INFORMATION, please go to our world wide web
site:
http://www.cnvlz.com
For all OTHER INFORMATION please communicate with us at:
<TABLE>
<S> <C>
write to: CITY INVESTING COMPANY LIQUIDATING TRUST
99 University Place, 7th floor, New York, NY 10003-4528
telephone: 212-473-1918
fax: 212-473-3927
E-mail address: [email protected]
</TABLE>
-1-
<PAGE>
<PAGE>
ITEM 1. BUSINESS
THE TRUST
On September 25, 1985, pursuant to the Plan of Complete Liquidation and
Dissolution of City Investing Company ('City') approved by stockholders of City
on December 12, 1984, City transferred all its remaining assets and liabilities
('Trust Estate') to the City Investing Company Liquidating Trust (the 'Trust')
to assure compliance with Section 337 of the Internal Revenue Code. The common
stock transfer books of City were permanently closed on September 25, 1985, and
the holders of record of common stock of City as of the close of business on
that date became holders of beneficial interest in the Trust on the basis of one
unit of beneficial interest for each share of common stock of City held on
September 25, 1985. After September 25, 1985, the outstanding certificates that
formerly represented shares of common stock of City are deemed to evidence the
same number of units of beneficial interest in the Trust.
The City Investing Company Liquidating Trust Agreement ('Trust Agreement')
provides that the Trust is organized for the sole purpose of liquidating the
Trust Estate in a manner calculated to conserve and protect the Trust Estate,
and to collect and distribute to the beneficiaries proceeds therefrom in as
prompt and orderly a fashion as possible after the payment of, or provision for,
expenses and liabilities. The Trustees are required to distribute to the
beneficiaries cash or other property comprising a portion of the Trust Estate as
the Trustees may, in their sole discretion, determine may be distributed without
detriment to the ability of the Trust to pay or discharge claims, expenses,
charges, liabilities and obligations. For information concerning a limitation on
the Trust's ability to pay liquidating distributions or dividends imposed in
connection with certain pending litigation, see Item 3, 'Legal Proceedings' and
Item 8-Note 9, 'Dividend Restrictions' below.
On June 27, 1996, the Trustees extended the time limit of the Trust's existence
to September 25, 1998 from September 25, 1996 in order to continue the orderly
disposal of assets and the settlement of claims and obligations of the Trust.
ITEM 3. LEGAL PROCEEDINGS
Prior to and after its liquidation, City was named as a party in various
litigations that pursuant to the Trust Agreement were assumed and became
liabilities of the Trust. The status of litigation and claims currently pending
or threatened which affect the Trust are as follows:
Rolo and Tenerelli v. City Investing Company Liquidating Trust, et al.
Plaintiffs are owners of lots and houses who have instituted this putative class
action as members of the North Port Out-Of-State Lot Owners' Association on
behalf of all persons who purchased lots or houses from General Development
Corporation ('GDC').
The action has been filed in the U.S. District Court for the District of New
Jersey. An amended complaint filed in May 1991 names as defendants AmBase
Corporation ('AmBase'), the Trust, The Home Insurance Company, Carteret Savings
Bank, and certain individual former and current directors and officers of AmBase
and City and trustees of the Trust, and certain financial institutions. The
amended complaint contains eight counts and pleads RICO and securities law
violations, as well as state common law causes of action for breach of contract,
fraud, negligence and negligent misrepresentation. Equitable and injunctive
relief is sought, as well as damages.
On August 24, 1995, the United States District Court for New Jersey dismissed
plaintiffs' Amended Complaint and denied plaintiffs leave to file a further
amended complaint. Thereafter, plaintiffs filed a motion for reconsideration of
the Court's decision. On October 23, 1995, the Court affirmed its decision and
again denied plaintiffs' application to file a further amended complaint.
Plaintiffs have appealed this decision to the Court of Appeals for the Third
Circuit. The appeal has been briefed, argued and awaits disposition by the
Court. Pending resolution of this appeal, the Trust cannot make any liquidating
distributions or pay any dividend.
-2-
<PAGE>
<PAGE>
City Investing Company Liquidating Trust v. Continental Casualty Co. On May 26,
1993, the Supreme Court of Delaware affirmed the decision by the Chancery Court
of New Castle County, Delaware, holding the Trust liable to Continental Casualty
Company ('Continental') by reason of a prior indemnification agreement by City
for liabilities incurred by Continental with respect to a judicial bond issued
by Continental in 1981 in connection with certain tax litigation between GDC and
the Florida Department of Revenue ('DOR'). On November 30, 1993, the Trust,
Continental and Bank of Delaware executed an Agreement effectively discharging
the Trust's liability to Continental from the proceeds of the cash collateral
($3,105,000) for the supersedeas bond posted by the Trust in connection with its
appeal to the Supreme Court of Delaware and transferring the remaining
collateral to Bank of Delaware to be held as security for any liability to the
DOR arising out of the judicial bond posted for the benefit of GDC, as to which
City issued an indemnity. The Agreement further obligates the Trust to make
annual payments to Bank of Delaware equal to the difference between interest
earned on the new escrow and the Florida post judgment interest accrual rate of
12% per annum. As of December 31, 1996, a total of $3,747,654 was held in escrow
in connection with this matter. From 1993 until the United States Supreme Court
denied the Trust's petition for certiorari on October 7, 1996, the issue of
whether the DOR claim against GDC was entitled to priority in the GDC bankruptcy
(in which case GDC and not the Trust would be liable for most of the DOR claim)
was the subject of litigation in various Federal courts. The amount to be paid
to the DOR, if any, from the amounts currently held in escrow is currently the
subject of negotiations between the Trust's counsel and the DOR.
Marina Pacifica: Environmental Protection Agency Claim. Marina Pacifica, a
California limited partnership whose general partner was a former subsidiary of
City, was notified on November 4, 1987, by the United States Environmental
Protection Agency (the 'EPA'), that it was deemed a potentially responsible
party ('PRP') with respect to the Operating Industries, Inc. Superfund Site (the
'Site') in Monterey Park, California. The Site, a landfill for municipal and
industrial waste, was included on the National Priorities List in May 1986.
Marina Pacifica was in the business of developing and selling condominiums.
Development of one construction site required the relocation of six oil wells.
Drilling muds generated during the relocation activities allegedly were disposed
of at the Site. The EPA has documented the release or threatened release of
hazardous substances at the Site and has taken actions to control the release of
these substances at the Site. The EPA identified three initial stages of
remedial action for the Site, the Records of Decision for which were signed in
July 1987, November 1987, September 1988 and amended in September 1990. The EPA
has estimated the aggregate cost of these initial stages of remediation at $287
million. In September 1996, the EPA issued a Record of Decision specifying final
remedial measures for the Site which it estimates will cost an additional $115
million.
In May 1989, a settlement was reached between the EPA and a group of PRPs to
conduct remedial activities for the first two initial stages and to pay state
and federal response costs incurred up to June 1, 1988. At that time, the EPA
listed Marina Pacifica as 53rd of 181 separate PRPs identified by the EPA in
terms of volume of waste disposed of at the Site. The EPA has since entered into
a subsequent settlement with additional PRPs for the same matter. Counsel for
Marina Pacifica notified the EPA that Marina Pacifica had been dissolved and
that it would not participate in the settlements.
In September 1990, the EPA sent a special notice letter to all PRPs, including
Marina Pacifica, demanding payment of the total costs incurred by the government
since June 1, 1988, which the EPA estimated were at least $15.3 million. The EPA
also requested a good faith offer to perform or pay for the remedy selected for
the third initial remedial stage. The EPA included an updated list of 269 PRPs,
of which Marina Pacifica appeared 57th. Marina Pacifica did not make a counter
offer. Counsel has advised that, based on its volumetric share and other
material factors, actual payments, if any, required of Marina Pacifica would be
a small fraction of the $402 million estimated cost of the remediation effort.
Income Tax Matters. The Trust may have a contingent liability with respect to
certain issues raised by the Internal Revenue Service upon audit of income tax
returns of City filed with respect to periods on or before September 25, 1985.
One of these issues is currently pending before the Tax Court of the United
States. These issues, if resolved unfavorably to City, would result in a
substantial liability. As other parties are primarily and jointly responsible
for this contingent liability, the Trust is unable to estimate the ultimate
cost, if any, of its exposure.
-3-
<PAGE>
<PAGE>
PART II
ITEM 5. MARKET PRICE OF UNITS
The Trust's Units of Beneficial Interest ('Units') trade as a regular National
Association of Securities Dealers Automated Quotation ('NASDAQ') security and
appear daily in the list entitled Small Capitalization Issues. The high and low
prices for the Units during 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
1996 1995
-------------------- --------------------
HIGH LOW HIGH LOW
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter $1.13 $0.94 $0.69 $0.69
Second Quarter 1.19 1.00 0.88 0.69
Third Quarter 1.25 1.13 1.00 0.88
Fourth Quarter 1.13 0.94 1.06 0.94
- ------------------------------------------------------------------------------------------
</TABLE>
As of December 31, 1996, there were approximately 15,800 holders of the Trust's
Units of Beneficial Interest. No cash distributions were made in either 1996 or
1995.
In connection with the proceeding entitled Rolo and Tenerelli v. City Investing
Company Liquidating Trust, et al., the Trust is unable to make any dividend
payments or liquidating distributions without further judicial action. The Trust
may have a contingent liability with respect to certain issues raised by the
Internal Revenue Service upon audit of tax returns of City Investing Company
filed with respect to periods ending on or before September 25, 1985. These
issues, if resolved unfavorably to City Investing Company, would result in a
substantial liability. As other parties are primarily and jointly responsible
for this contingent liability, the Trust is unable to estimate the ultimate
cost, if any, of its exposure. The Trust also remains subject to possible claims
by the United States Environmental Protection Agency and other third parties.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
-----------------------
(IN THOUSANDS, EXCEPT PER UNIT DATA) 1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Losses on dispositions of assets, net $(834) $(645) $(491) $(974) $(540)
Interest, dividend and other income 4,210 1,597 1,247 1,079 1,791
Net income (loss) 2,947 452 267 (523) 770
Net income (loss) per unit 0.08 0.01 0.01 (0.01) 0.02
Total assets 65,504 62,792 62,340 62,073 62,596
Book value per unit 1.68 1.61 1.59 1.59 1.61
- -------------------------------------------------------------------------------------------------------------
</TABLE>
-4-
<PAGE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Trust recorded net income of $2,946,857 ($0.08 per unit) in 1996 compared
with $452,453 ($0.01 per unit) in 1995 and $266,870 ($0.01 per unit) in 1994. It
is difficult to compare amounts in comparable periods, as the financial
statements of the Trust are prepared on the basis of accounting used for Federal
income tax purposes; that is, amounts are reflected in the financial statements
when amounts are received or paid.
In 1996, the net losses on the disposition of assets of $834,096 consisted
principally of the Tapken v. Brown, et al. settlement of $550,000 which was paid
from escrow on November 26, 1996. The remaining losses on the disposition of
assets of $284,096 in 1996, compared to $645,298 in 1995 and $490,793 in 1994
consisted principally of legal fees incurred in connection with the defense of
litigation against the Trust. In 1995, there was a loss of $199,926 as a result
of the Trust's sale of its limited partnership interest in PACE/City Associates,
L.P. ('PCA').
Interest, dividend and other income of $4,210,430 in 1996, $1,597,572 in 1995
and $1,246,901 in 1994, was principally derived from interest earned on
investment securities. The increase in 1996 and 1995 was primarily due to an
increase in the amount of interest income collected from investment securities
as a result of the 1995 sale of the Trust's interest in PCA along with an
increase in interest rates, compared to 1994.
Administrative expenses were $429,476 in 1996, $499,820 in 1995, and $489,239 in
1994. The lower level of administrative expenses in 1996 compared to 1995 and
1994 is primarily due to a reduction in costs of administration of the Trust.
A principal asset of the Trust was its investment in PACE/City Associates, L.P.
('PCA'), a non-public partnership which held an indirect investment in certain
printing companies. In accordance with accounting used for Federal income tax
purposes, that investment was reflected in the Trust's financial statements at
$27,815,623 at December 31, 1994. On March 8, 1995, the Trust received an offer
from Kohlberg Kravis Roberts & Co. ('KKR'), the general partner of PCA, to
purchase the Trust's limited partnership interest in PCA for $27,821,241. In May
1995, the Trust sold its investment in PCA to KKR for that amount. That
investment had been reflected in the Trust's financial statements at $28,021,167
at the time of the Trust's sale of its interest in PCA. The $28,021,167
reflected the capitalization of investment advisory fees incurred in connection
with the sale. Accordingly, the Trust recognized a loss of $199,926 in
connection with this sale, which is included in losses on dispositions of
assets, net, in the accompanying financial statements.
At December 31, 1996, the Trust had cash and cash equivalents, investment
securities and restricted funds of $60,266,069. The Trustees believe that such
cash resources and investment securities are sufficient to meet all anticipated
liquidity requirements.
No cash distributions were made in either 1996 or 1995. For information
regarding dividend restrictions see Item 8-Note 9 to the financial statements
herein.
-5-
<PAGE>
<PAGE>
ITEM 8. FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
THE TRUSTEES AND HOLDERS OF UNITS OF BENEFICIAL INTEREST
CITY INVESTING COMPANY LIQUIDATING TRUST:
We have audited the accompanying balance sheets of the City Investing Company
Liquidating Trust (the 'Trust') as of December 31, 1996 and 1995, and the
related statements of operations, cash flows and changes in trust equity for
each of the years in the three-year period ended December 31, 1996. These
financial statements are the responsibility of the Trust's Trustees. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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 the
Trustees, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
As described in Note 2 to the financial statements, the Trust's policy is to
prepare its financial statements on the basis of accounting used for Federal
income tax reporting purposes. Accordingly, the accompanying financial
statements are not intended to present financial position, income and expenses,
cash flows and changes in trust equity in conformity with generally accepted
accounting principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Trust as of December 31,
1996 and 1995, and its income and expenses and its cash flows for each of the
years in the three-year period ended December 31, 1996, on the basis of
accounting referred to above.
See Note 8 to the financial statements for a description of litigation and other
contingent liabilities.
KPMG PEAT MARWICK LLP
New York, New York
January 15, 1997
-6-
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER UNIT DATA) 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Losses on dispositions of assets, net $(834) $(645) $(491)
Interest, dividend and other income 4,210 1,597 1,247
- -------------------------------------------------------------------------------------------------------------
Total income 3,376 952 756
Administrative expenses 429 500 489
- -------------------------------------------------------------------------------------------------------------
NET INCOME $2,947 $452 $267
- -------------------------------------------------------------------------------------------------------------
NET INCOME PER UNIT $0.08 $0.01 $0.01
- -------------------------------------------------------------------------------------------------------------
OUTSTANDING UNITS 38,979 38,979 38,979
- -------------------------------------------------------------------------------------------------------------
</TABLE>
BALANCE SHEETS
DECEMBER 31
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $78 $217
Investment securities 56,438 53,078
Restricted funds 3,751 4,213
Investments 609 609
Real estate 4,628 4,675
- ----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $65,504 $62,792
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES AND TRUST EQUITY
Accounts payable $0 $235
Trust equity 65,504 62,557
- ----------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND TRUST EQUITY $65,504 $62,792
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
-7-
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,947 $452 $267
Adjustments to reconcile net income to net cash used for
operating activities:
Gain on sale of real estate (81) 0 0
Loss on sale of investment in PCA 0 200 0
Interest income earned on investment in U.S. Treasuries (3,769) (1,195) (853)
Other, net 0 0 (11)
- --------------------------------------------------------------------------------------------------------------
Net cash used for operating activities (903) (543) (597)
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of real estate 128 0 0
Proceeds from sale of investment in PCA 0 27,821 0
Maturities of investment securities 70,699 41,370 26,501
Purchases of investment securities (70,579) (68,149) (25,104)
Restricted funds 462 (185) (1,103)
Other, net 54 (205) 0
- --------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities 764 652 294
- --------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (139) 109 (303)
Cash and cash equivalents at beginning of year 217 108 411
- --------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $78 $217 $108
- --------------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CHANGES IN TRUST EQUITY
YEAR ENDED DECEMBER 31
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $62,557 $62,105 $61,838
Net income 2,947 452 267
- --------------------------------------------------------------------------------------------------------------
BALANCE AT END OF YEAR $65,504 $62,557 $62,105
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
-8-
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
The City Investing Company Liquidating Trust (the 'Trust') was created on
September 25, 1985, pursuant to an Agreement and Declaration of Trust ('Trust
Agreement') by and between City Investing Company ('City') and the three
trustees of the Trust ('Trustees'). The Trust Agreement is governed by the laws
of the State of Delaware.
On September 25, 1985, pursuant to a Plan of Complete Liquidation and
Dissolution approved by stockholders of City on December 12, 1984, City
transferred all its remaining assets and liabilities ('Trust Estate') to the
Trust to assure compliance with Section 337 of the Internal Revenue Code. The
sole 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 to the beneficiaries the income and proceeds therefrom in as prompt
and orderly a fashion as possible after the payment of, or provision for,
expenses and liabilities.
The common stock transfer books of City were permanently closed on September 25,
1985, and the holders of record of common stock of City as of the close of
business on that date became holders of units of beneficial interest in the
Trust on the basis of one unit of beneficial interest for each share of common
stock of City held on September 25, 1985. After September 25, 1985, the
outstanding certificates that formerly represented shares of common stock of
City are deemed to evidence the same number of units of beneficial interest in
the Trust.
The Trust Agreement, signed on September 25, 1985, set forth a time limit of
three years for the disposition of the Trust's assets and distribution to the
unit holders unless a later termination was required by the Trustees. As a
result of the protracted nature of certain litigation and other claims asserted
against the Trust, on September 7, 1988, April 23, 1990, September 2, 1992, June
16, 1994, and June 27, 1996, the Trustees extended the time limit of the Trust's
existence to September 25, 1990, September 25, 1992, September 25, 1994,
September 25, 1996, and then to, September 25, 1998, respectively.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation: The accompanying financial statements have been prepared
on the basis of accounting used for Federal income tax purposes. Accordingly,
certain revenue and the related assets are recognized when received rather than
when earned, and certain expenses are recognized when paid rather than when the
obligation is incurred.
Valuation of assets and liabilities: The Trust Equity balance on September 25,
1985 was established at an amount equivalent to the number of units of
beneficial interest outstanding (38,979,372) multiplied by the average of the
high and low trading prices of such units on the first day of trading ($3.1875),
or an aggregate of $124.2 million. The fair market value for Federal income tax
purposes of each asset other than cash and cash equivalents was determined by
that asset's proportionate share of the Trust Equity increased by accounts
payable and decreased by cash and cash equivalents at September 25, 1985. The
proportionate share of each of these assets was determined by the estimated
value of such Trust asset in relation to the estimated value of all of the Trust
assets other than cash and cash equivalents. In determining the estimated value
of Trust assets, the Trustees evaluated, where appropriate, such factors as
City's historical carrying values, expected amounts and dates of realization,
prevailing interest rates, available market prices and restrictions with respect
to disposition.
-9-
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Income taxes: For Federal income tax purposes, the September 25, 1985 transfer
of assets and liabilities to the Trust and distribution to stockholders of units
in the Trust was treated as a distribution of assets and liabilities by City to
its stockholders and a contribution by the stockholders of such net assets to
the Trust in return for units. The Trust is treated as a grantor trust and not
as a corporation. Accordingly, any income or loss of the Trust will not be
taxable to the Trust but will be taxable to the unit holders as if the unit
holders had themselves realized the income or loss from their undivided
interests in Trust assets.
Gains (losses) on dispositions of assets, net: Gains (losses) on dispositions
of assets, net, also includes settlement costs and legal fees incurred in
connection with the defense of litigation against the Trust.
Net income (loss) per unit: Net income (loss) per unit is calculated by
dividing net income (loss) of the Trust by the number of outstanding Units of
Beneficial Interest.
Cash and cash equivalents: The Trust considers all investments in money market
funds as cash equivalents.
NOTE 3 - INVESTMENT SECURITIES
Investment securities at December 31, 1996 and December 31, 1995 consist of U.S.
Treasuries with maturities of less than one year and are carried at cost.
<TABLE>
<CAPTION>
Investment securities at December 31, consist of the following:
- --------------------------------------------------------------------------------------------------
1996 1995
-------------------------------- --------------------------------
CARRYING FAIR CARRYING FAIR
(IN THOUSANDS) VALUE COST VALUE VALUE COST VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasuries
maturing within
one year $56,438 $56,438 $57,385 $53,078 $53,078 $55,085
- --------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The gross unrealized gains on investment securities at December 31, consist of the following:
- -------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 1996 1995
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized gains $947 $2,007
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 4 - RESTRICTED FUNDS
Restricted funds at December 31, 1996, represents funds held in escrow in
connection with City Investing Company Liquidating Trust v. Continental Casualty
Co. of $3,747,654 and other of $2,707. At December 31, 1995, restricted funds
consisted of funds held in escrow in connection with City Investing Company
Liquidating Trust v. Continental Casualty Co. of $3,391,053, Tapken v. Brown, et
al. of $550,000; mortgage maturing in May 1996 of $267,993, and other of $3,500.
NOTE 5 - INVESTMENTS
<TABLE>
<CAPTION>
Investments at December 31 are as follows:
- ----------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cayman Resources Corporation $27 $27
Other investments 582 582
- ----------------------------------------------------------------------------------------------------------------
Total investments $609 $609
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
-10-
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Trust holds 3,108,105 shares of Cayman Resources Corporation ('Cayman')
common stock, which are carried at their tax basis. At December 31, 1996 and
1995, the fair market value of the Cayman stock, based on quoted market prices,
was $124,324 and $96,351, respectively.
NOTE 6 - REAL ESTATE
Prior to January 2, 1990 the Trust held an undivided interest in a note received
from Texas City Investment Company ('Texas City') in connection with a sale of
land located in Galveston County, Texas on July 22, 1983. Texas City failed to
pay fully the note in accordance with its terms. On January 2, 1990 the
beneficial owners of the note (including the Trust) foreclosed on the property
securing the note and the Trust now holds an undivided interest in the property.
The Trust's interest in the property is classified as real estate in the
accompanying financial statements and valued at the January 2, 1990 fair market
value of $4,675,000, less $46,658, the carrying value of two parcels sold on
April 15, 1996. The Trust realized a long term gain of $81,390 on the April 15,
1996 sale of approximately two per cent of the real estate.
NOTE 7 - TRUST ADMINISTRATION
Through June 30, 1995, the Trust had engaged AmBase Corporation ('AmBase') to
provide day-to-day administration of the Trust at an annual administrative fee
of $100,000. The Trust terminated the administrative agreement with AmBase
effective as of June 30, 1995. Two of the Trustees are former directors of
AmBase and one of the Trustees is a former officer of AmBase. The Trust assumed
the administration of the Trust effective July 1, 1995, at a cost that is less
than the fee previously paid to AmBase.
NOTE 8 - CONTINGENT LIABILITIES
In accordance with the Trust Agreement, the Trust has assumed the obligation to
make payments, where required, to discharge all litigation and other contingent
liabilities of City which existed at September 25, 1985. The Trust may have a
contingent liability with respect to certain issues raised by the Internal
Revenue Service upon audit of tax returns of City Investing Company filed with
respect to periods ending on or before September 25, 1985. These issues, if
resolved unfavorably to City, would result in a substantial liability. As other
parties are primarily and jointly responsible for this contingent liability, the
Trust is unable to estimate the ultimate cost, if any, of its exposure. The
Trust also remains subject to possible claims by the United States Environmental
Protection Agency and other third parties. For a description of all known
significant litigation and claims currently pending or threatened which affect
the Trust, see Item 3 -- Legal Proceedings beginning on page 2.
NOTE 9 - DIVIDEND RESTRICTIONS
The existence of the contingent liabilities referred to in Note 8 may affect the
timing of future distributions of Trust assets. In connection with the
proceeding entitled Rolo and Tenerelli v. City Investing Company Liquidating
Trust, et al., the Trust is unable to make any dividend payments or liquidating
distributions without further judicial action.
-11-
<PAGE>
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
THE TRUSTEES
The Trustees of the Trust are Geo. T. Scharffenberger, Eben W. Pyne and Lester
J. Mantell. Each Trustee will serve for the term of the Trust subject to his
earlier resignation or removal. There are no family relationships between the
Trustees.
Geo T. Scharffenberger (77) was a director and Chairman of the Board of AmBase
Corporation until January 26, 1993. Mr. Scharffenberger was formerly Chairman
and a director of City and served as City's Chief Executive Officer from 1966
until May 1985.
Eben W. Pyne (79) was a director of AmBase Corporation until January 26, 1993.
Mr. Pyne retired in 1982 as a Senior Vice President of Citibank, N.A. He is also
a consulting director of Long Island Lighting Company and was a director of
City.
Lester J. Mantell (59) was an Assistant Vice President -- Tax of AmBase
Corporation from April 1995 to December 1996. He served as the Executive Vice
President, Chief Financial Officer and Treasurer of AmBase Corporation from
October 1994 to January 1995, and as Senior Vice President -- Tax of AmBase
Corporation from April 1993 to October 1994. Prior thereto, he served as a
consultant to AmBase Corporation from January 1992 to April 1993, as a Senior
Vice President of AmBase Corporation from January 1990 until December 31, 1991,
and as a Vice President of AmBase Corporation from June 1985 to December 1989.
Mr. Mantell was formerly Vice President and Director of Taxes of City from 1977
to May 1985.
See also 'Certain Relationships and Related Transactions' below.
ITEM 11. EXECUTIVE COMPENSATION
Pursuant to Section 9.1 of the Trust Agreement, the Trustees, in lieu of
commissions or other compensation fixed by law for Trustees, receive as
compensation for services thereunder the aggregate sum of $36,000 per year to be
allocated equally among the Trustees. Each Trustee is also reimbursed from the
Trust Estate for all expenses reasonably incurred by him in the performance of
his duties pursuant to the Trust Agreement.
There are no plans, pursuant to which cash or non-cash compensation was paid or
distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the Trustees, except for amounts that they may
receive as holders of Units of Beneficial Interest.
-12-
<PAGE>
<PAGE>
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following are the only persons known to the Trust to own beneficially
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934)
more than five percent of the Trust's Units of Beneficial Interest. The
information provided below was obtained from Amendment No. 5 to Schedule 13D of
Goldman, Sachs & Co., as filed with the Securities and Exchange Commission
('SEC') as of September 11, 1992, from Amendment No. 8 to Schedule 13D of
Farallon Capital Management, Inc. filed with the SEC as of November 19, 1996,
from Amendment No. 5 to Schedule 13G as filed with the SEC by Heine Securities
Corp. as of February 1, 1996 and from Amendment No. 4 to Schedule 13D of
Oppenheimer & Co., Inc. as filed with the SEC as of September 16, 1992.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
UNITS
BENEFICIALLY %
NAMES AND ADDRESSES OF BENEFICIAL OWNERS OWNED OF CLASS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
GOLDMAN, SACHS & CO 12,615,564 32.4%
85 Broad Street, New York, NY 10004
FARALLON CAPITAL MANAGEMENT, INC. 8,317,348 21.3%
One Maritime Plaza, Suite 1250, San Francisco, CA 94111
HEINE SECURITIES CORP. 6,572,091 16.9%
51 John F. Kennedy Parkway, Short Hills, NJ 07078
OPPENHEIMER & CO., INC. 1,997,265 5.1%
200 Liberty Street, New York, NY 10281
- -------------------------------------------------------------------------------------------------------------------------
TOTALS 29,502,268 75.7%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The following table shows the Units of Beneficial Interest of the Trust
beneficially owned by each Trustee and the Trustees as a group as of January 13,
1997.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
UNITS
BENEFICIALLY %
NAMES OF BENEFICIAL OWNERS OWNED OF CLASS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Eben W. Pyne 1,000 *
Lester J. Mantell -- --
Geo. T. Scharffenberger -- --
Trustees as a group (three) 1,000 *
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Represents less than one quarter of 1% of the class.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Through June 30, 1995, the Trust had engaged AmBase Corporation ('AmBase') to
provide day-to-day administration of the Trust at an annual administrative fee
of $100,000. The Trust terminated the administrative agreement with AmBase
effective as of June 30, 1995. Two of the Trustees are former directors of
AmBase and one of the Trustees is a former officer of AmBase. The Trust assumed
the day-to-day administration of the Trust effective July 1, 1995, at a cost
that is less than the fee previously paid to AmBase.
-13-
<PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
(a) Documents Filed as Part of This Report:
1. Index to Financial Statements:
Independent Auditors' Report.....................................................................6
Statements of Operations.........................................................................7
Balance Sheets...................................................................................7
Statements of Cash Flows.........................................................................8
Statements of Changes in Trust Equity............................................................8
Notes to Financial Statements....................................................................9
2. Index to Financial Statement Schedules:
Not applicable
3. Exhibits:
2. Plan of Complete Liquidation and Dissolution of City Investing Company (incorporated by reference
to Exhibit 2A to City Investing Company Form 8-K dated December 12, 1984 and filed on December 21,
1984).
3. Agreement and Declaration of Trust dated September 25, 1985 by and between City Investing Company
and Geo. T. Scharffenberger, Eben W. Pyne and Lester J. Mantell, as Trustees, together with
Schedule I thereto (incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1985), as amended on September 7, 1988 (incorporated by reference
to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q for the quarter ended
September 30, 1988), as amended on April 23, 1990 (incorporated by reference to Exhibit 6.1 to
City Investing Company Liquidating Trust Form 10-Q for the quarter ended September 30, 1990), as
amended on September 2, 1992 (incorporated by reference to Exhibit 6.1 to City Investing Company
Liquidating Trust Form 10-Q for the quarter ended September 30, 1992), as amended on June 16, 1994
(incorporated by reference to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q
for the quarter ended September 30, 1994), as amended on June 27, 1996 (incorporated by reference
to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q for the quarter ended June
30, 1996).
3a. Specimen certificate representing Units of Beneficial Interest in City Investing Company
Liquidating Trust (certificate formerly representing shares of Common Stock of City Investing
Company, showing legends to be placed on certificates when issued from time to time upon transfer
of Units of Beneficial Interest) (incorporated by reference to Exhibit 3.4 of City Investing
Company Liquidating Trust Form 8-B filed with the Commission on September 25, 1985).
10.1 Administration Agreement, between AmBase Corporation and City Investing Company Liquidating Trust,
effective January 1, 1992 (incorporated by reference to Exhibit 10 to City Investing Company
Liquidating Trust Form 10-Q for the quarter ended June 30, 1993).
10.2 Securities Purchase Agreement dated as of May 15, 1995 between PACE/City Associates, L.P. and WCP
Associates, L.P.
10.3 Cross-Receipt acknowledging dissolution of PACE/City Associates, L.P. and receipt of $27,821,241.
Copies of Exhibits will be provided upon written request to the Trust.
(b) Form 8-K
The Trust was not required to file a report on Form 8-K during the quarter ended December 31, 1996.
</TABLE>
-14-
<PAGE>
<PAGE>
SIGNATURES:
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on this 15th day of January 1997.
CITY INVESTING COMPANY LIQUIDATING TRUST
LESTER J. MANTELL
Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant on
the 15th day of January 1997.
A majority of the Trustees:
GEO. T. SCHARFFENBERGER
Trustee
EBEN W. PYNE
Trustee
LESTER J. MANTELL
Trustee
-15-
<PAGE>
<PAGE>
APPENDIX A
- --------------------------------------------------------------------------------
CITY INVESTING COMPANY LIQUIDATING TRUST Fed. I.D. #13-6859211 January 15, 1997
1996 U.S. FEDERAL INCOME TAX INFORMATION
This letter provides information relating to the amount and character of
the income, gain, loss, deductions and basis adjustment ('Tax Items') of the
City Investing Company Liquidating Trust ('Trust') for 1996. You should use this
information in preparing your 1996 U.S. Federal income tax return.
If you (i) acquired Trust Units ('Units') upon liquidation of City
Investing Company, (ii) reported long-term capital gain or loss upon the
liquidation, and (iii) did not dispose of any Units in 1996, you can calculate
on the Schedule your share of the Trust Tax Items by multiplying the Amount per
Unit [Column 1A] of each Tax Item by the Number of Units you held [Column 1B]
and entering the product under the Taxable Amount [Column 1C].
If you (i) disposed of Units in 1996, or (ii) acquired your Units other
than upon the liquidation of City Investing Company, or (iii) did not report
long-term capital gain or loss upon the liquidation, you will probably have
different income tax consequences that cannot readily be calculated by the
Trust. For administrative convenience, you may calculate your share of the Trust
Tax Items by (i) multiplying the Amount per Unit [Column A] of each Tax Item by
the Number of Units you held [Column B] on the first day of each month
applicable to your holding period, (ii) entering the product under the Taxable
Amount [Column C] and (iii) entering the sum of the amounts in Columns 11C
through X111C, if any, in Column X1V.
Individual taxpayers may report on Form 1040 the amounts of Tax Items
computed for Federal income tax purposes as follows:
<TABLE>
<S> <C>
Tax Item 1c. Interest Income -- line 1, Schedule B
Tax Item 2. Dividend Income -- line 5, Schedule B
Tax Item 3c. Net Short-Term Capital Gain/(Loss) -- line 5, Schedule D
Tax Item 4. Net Long-Term Capital Gain/(Loss) -- line 13, Schedule D
Tax Item 5. Miscellaneous Income -- line 21
Tax Item 6. Trust Expenses -- line 22, Schedule A, (if you itemize deductions)
Tax Item 7. Adjustment to Basis -- FOR INFORMATION PURPOSES
</TABLE>
THIS LETTER IS NOT INTENDED TO PROVIDE INCOME TAX ADVICE RELATING TO THE
ACQUISITION, HOLDING AND DISPOSITION OF UNITS, YOU ARE STRONGLY ENCOURAGED TO
DISCUSS THE INCOME TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF UNITS
WITH YOUR TAX ADVISOR.
For all information about UNIT HOLDINGS:
UNITS HELD IN STREET NAME, please communicate with your bank or
broker.
REGISTERED UNIT HOLDERS, please communicate with ChaseMellon Shareholder
Services, transfer agent for City Investing Company Liquidating Trust, at:
<TABLE>
<S> <C>
telephone: 1-800-851-9677
write to: ChaseMellon Shareholder Services
450 West 33rd Street, 15th Floor
New York, NY 10001-2697
world wide web site: http://www.cmssonline.com
</TABLE>
For current FINANCIAL AND TAX INFORMATION, please go to our world wide
web site:
http://www.cnvlz.com
For all OTHER INFORMATION please communicate with us at:
<TABLE>
<S> <C>
write to: CITY INVESTING COMPANY LIQUIDATING TRUST
99 University Place, 7th floor, New York, NY 10003-4528
telephone: 212-473-1918
fax: 212-473-3927
E-mail address: [email protected]
</TABLE>
-A-
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
SCHEDULE OF 1996 U.S. FEDERAL TAX ITEMS
<TABLE>
<CAPTION>
I
TOTAL IF HELD FROM
JANUARY 1 THROUGH
DECEMBER 31
----------------------------------------------------
A x B = C
TAX ITEM:* AMOUNT
- ---------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT#
----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Interest Income:
a) U. S. Gov't. Obligations 0.103357 x =
b) All Other 0.000230 x =
c) Total Interest Income (1a+1b) 0.103587 x =
2. Dividend Income 0.000410 x =
3. Net Short-Term Capital
Gain/(Loss):
a) U.S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total (3a+3b) 0.000000 x =
4. Net Long-Term Capital
Gain/(Loss): (0.021399) x =
5. Miscellaneous Income 0.004020 x =
6. Trust Expenses 0.011018 x =
7. Adjustment to Basis
Tax Items (1c+2+3c+4+5-6) 0.075600 x =
<CAPTION>
II
JANUARY
------------------------------------------------------
A x B = C
TAX ITEM* AMOUNT
- --------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
------------------------------------------------------
1. Interest Income:
a) U. S. Gov't. Obligations 0.019625 x =
b) All Other 0.000000 x =
c) Total Interest Income (1a+1b) 0.019625 x =
2. Dividend Income 0.000029 x =
3. Net Short-Term Capital
Gain/(Loss):
a) U.S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total (3a+3b) 0.000000 x =
4. Net Long-Term Capital
Gain/(Loss): (0.000101) x =
5. Miscellaneous Income 0.000731 x =
6. Trust Expenses 0.000908 x =
7. Adjustment to Basis
Tax Items (1c+2+3c+4+5-6) 0.019376 x =
<CAPTION>
III
FEBRUARY
-------------------------------------------------------
A x B = C
TAX ITEM* AMOUNT
- --------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
-------------------------------------------------------
1. Interest Income:
a) U. S. Gov't. Obligations 0.002048 x =
b) All Other 0.000022 x =
c) Total Interest Income (1a+1b) 0.002070 x =
2. Dividend Income 0.000035 x =
3. Net Short-Term Capital
Gain/(Loss):
a) U.S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total (3a+3b) 0.000000 x =
4. Net Long-Term Capital
Gain/(Loss): (0.000030) x =
5. Miscellaneous Income 0.000541 x =
6. Trust Expenses 0.000607 x =
7. Adjustment to Basis
Tax Items (1c+2+3c+4+5-6) 0.002009 x =
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VIII
JULY
----------------------------------------------------
A x B = C
TAX ITEM:* AMOUNT
- ---------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Interest Income:
a) U. S. Gov't. Obligations 0.000000 x =
b) All Other 0.000016 x =
c) Total Interest Income (1a+1b) 0.000016 x =
2. Dividend Income 0.000037 x =
3. Net Short-Term Capital
Gain/(Loss):
a) U.S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total (3a+3b) 0.000000 x =
4. Net Long-Term Capital
Gain/(Loss): (0.000029) x =
5. Miscellaneous Income 0.000395 x =
6. Trust Expenses 0.000542 x =
7. Adjustment to Basis
Tax Items (1c+2+3c+4+5-6) (0.000123) x =
<CAPTION>
IX
AUGUST
----------------------------------------------------
A x B = C
TAX ITEM* AMOUNT
- --------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
----------------------------------------------------
1. Interest Income:
a) U. S. Gov't. Obligations 0.008141 x =
b) All Other 0.000141 x =
c) Total Interest Income (1a+1b) 0.008282 x =
2. Dividend Income 0.000046 x =
3. Net Short-Term Capital
Gain/(Loss):
a) U.S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total (3a+3b) 0.000000 x =
4. Net Long-Term Capital
Gain/(Loss): (0.003589) x =
5. Miscellaneous Income 0.000376 x =
6. Trust Expenses 0.000728 x =
7. Adjustment to Basis
Tax Items (1c+2+3c+4+5-6) 0.004387 x =
<CAPTION>
X
SEPTEMBER
----------------------------------------------------
A x B = C
TAX ITEM* AMOUNT
- --------- PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d]
----------------------------------------------------
1. Interest Income:
a) U. S. Gov't. Obligations 0.013199 x =
b) All Other 0.000001 x =
c) Total Interest Income (1a+1b) 0.013200 x =
2. Dividend Income 0.000057 x =
3. Net Short-Term Capital
Gain/(Loss):
a) U.S. Gov't. Obligations 0.000000 x =
b) All Other 0.000000 x =
c) Total (3a+3b) 0.000000 x =
4. Net Long-Term Capital
Gain/(Loss): (0.000822) x =
5. Miscellaneous Income 0.000307 x =
6. Trust Expenses 0.000262 x =
7. Adjustment to Basis
Tax Items (1c+2+3c+4+5-6) 0.012480 x =
- ------------------
* The Trust Tax Items for 1996 have been calculated in accordance with the
letter on the front side of this page, and our letter of November 26, 1985
(reproduced on Page D) providing certain tax information, which are integral
parts hereof and which you should review with your tax advisor before
reporting your share of the Trust Tax Items on your 1996 U.S. Federal income
tax return.
# Taxable Amount [Column IC] is equal to the Amount per Unit [Column IA]
multiplied by No. of Units you held [Column IB] continuously from January 1
through December 31, 1996.
[d] Taxable Amount [Column C] is equal to the Amount per Unit [Column A]
multiplied by No. of Units you held [Column B] on the first day of each
month.
! Taxable Amount [Column XIV] is equal to the sum of the Taxable Amounts in
Columns IIC through XIIIC for each month that you held Trust Units on the
first day.
-B-
<PAGE>
<PAGE>
CITY INVESTING COMPANY LIQUIDATING TRUST
SCHEDULE OF 1996 U.S. FEDERAL TAX ITEMS
<CAPTION>
IV V
MARCH APRIL
- ----------------------------------------------------------------------------------------------------------------------------
A x B = C A x B = C
AMOUNT AMOUNT
PER NO. OF TAXABLE PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d]
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0.019638 x = 0.000060 x =
0.000018 x = 0.000025 x =
0.019656 x = 0.000085 x =
0.000036 x = 0.000034 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
(0.000013) x = (0.001439) x =
0.000276 x = 0.000280 x =
0.000551 x = 0.000967 x =
0.019404 x = (0.002007) x =
<CAPTION>
VI VII
MAY JUNE
- ----------------------------------------------------------------------------------------------------------------------------
A x B = C A x B = C
AMOUNT AMOUNT
PER NO. OF TAXABLE PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d]
- ----------------------------------------------------------------------------------------------------------------------------
0.020089 x = 0.000461 x =
0.000003 x = 0.000004 x =
0.020092 x = 0.000465 x =
0.000049 x = 0.000033 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.002141 x = (0.000136) x =
0.000199 x = 0.000337 x =
0.001003 x = 0.000221 x =
0.021478 x = 0.000478 x =
<CAPTION>
XI XII
OCTOBER NOVEMBER
- ----------------------------------------------------------------------------------------------------------------------------
A x B = C A x B = C
AMOUNT AMOUNT
PER NO. OF TAXABLE PER NO. OF TAXABLE
UNIT x UNITS = AMOUNT[d] UNIT x UNITS = AMOUNT[d]
- ----------------------------------------------------------------------------------------------------------------------------
0.019092 x = 0.000508 x =
0.000000 x = 0.000000 x =
0.019092 x = 0.000508 x =
0.000023 x = 0.000017 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
0.000000 x = 0.000000 x =
(0.004339) x = (0.013022) x =
0.000349 x = 0.000229 x =
0.000643 x = 0.003601 x =
0.014482 x = (0.015869) x =
<CAPTION>
XIV
TOTAL IF HELD ON SOME,
XIII BUT NOT ALL,
DECEMBER FIRST DAYS OF EACH MONTH
- ----------------------------------------------------------------------------------------------------------------------------
A IIC + IIIC + IVC + VC +VIC+
AMOUNT x B = C VIIC + VIIIC + IXC +
PER NO. OF TAXABLE XC + XIC + XIIC + XIIIC
UNIT x UNITS = AMOUNT[d] TAXABLE AMOUNT!
- ----------------------------------------------------------------------------------------------------------------------------
0.000496 x =
0.000000 x =
0.000496 x =
0.000014 x =
0.000000 x =
0.000000 x =
0.000000 x =
(0.000020) x =
0.000000 x =
0.000985 x =
(0.000495) x =
</TABLE>
-C-
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
CITY INVESTING COMPANY LIQUIDATING TRUST
RE: TAX INFORMATION
This letter is to advise you of the tax return information to be provided
to you annually as a holder of units ('Units') in the City Investing Company
Liquidating Trust ('Trust'). The Trust, being a 'grantor' trust, will be
disregarded for Federal income tax purposes and you will be treated as having a
direct interest in an allocable portion of each asset and liability of the
Trust. Consequently, an allocable portion of all items of Trust income,
deductions and credits ('Tax Items') must be reported by you on your income tax
return. Your taxable year and accounting method will determine the income tax
treatment of your allocable portion of Tax Items. As soon as practicable after
the end of each year, but no later than April 15 of the following year, you will
be provided with a schedule listing your allocable share of Tax Items for the
year, which will be determined by the number of Units you own in relation to the
total number of outstanding Units. This will enable you to file your federal,
state and local income tax returns. The types of Tax Items which will be
required to be reported by you on your income tax return may include, but are
not limited to interest income, original issue discount income, short-term and
long-term capital gains and losses, dividend income, market discount income,
depreciation, state, local and foreign taxes and deductible expenses incurred by
the Trust.
For purposes of determining gain or loss from the sale or other disposition
of your undivided interest in assets held by the Trust, your holding period and
adjusted basis for your undivided interest in each of the assets held by the
Trust will be determined by your date of acquisition and the price you paid for
your Units. If you received your Units upon the liquidation of City Investing
Company, you will be treated as acquiring your undivided interest in the net
assets of the Trust at a price of $3.1875 per Unit and your holding period for
your undivided interest in the assets held by the Trust will have begun on
September 26, 1985. If you sell your Units, you will be deemed to sell an
undivided interest in each asset of the Trust for an allocable portion of the
sales price for the Units. For example, if you sell your Units, you may be
required to recognize ordinary income with respect to your interest in market
discount obligations held by the Trust. For administrative convenience, gains
and losses from the sale or other disposition by the Trust of assets held by the
Trust, including the collection of installment notes receivable, will be
reported to you by the Trust as if all Unit holders obtained their Units, and,
consequently, their undivided interests in the assets held by the Trust, upon
the liquidation of City Investing Company. Subsequent Unit holders may have
different income tax consequences, but these tax consequences cannot readily be
calculated. For example, with respect to the collection of installment notes
receivable, the Trust will report to you the portion of amounts received which
are reportable as market discount, which will be taxed as ordinary income, on
the basis of an acquisition date of September 25, 1985 and a price per Unit of
$3.1875. For this purpose, it will be assumed that the installment notes
receivable will not be eligible for installment sales reporting tax treatment.
For administrative convenience, certain special rules will apply to the
determination of the effective date of transfers of Units. A transfer will not
be considered effective until the first day of the month following the month in
which the transfer occurs (or, if earlier, the first day following the date on
which the Trust disposes of any asset the basis of which exceeds 5% of the bases
of all the assets held by the Trust on September 25, 1985). Record holders of
Units on the first day of a month or the day after which such a disposition of
assets takes place will be entitled to receive all distributions made on or
after such date and before any subsequent effective date of transfer and will be
treated for tax purposes as the owner of the underlying assets of the Trust for
such period. In accordance with these rules, the Trust will determine for
periods ending at the end of each month (and for periods ending on the day the
Trust disposes of any asset the basis of which exceeds 5% of the bases of all
assets held by the Trust on September 25, 1985) the Tax Items to be included on
the schedule to be provided to you annually. For administrative convenience, Tax
Items will be determined using the cash method of tax accounting.
This letter is not intended to provide income tax advice relating to the
holding of Units. As such, you are strongly encouraged to discuss the income tax
consequences of an investment in Units with your tax advisor.
November 26, 1985
-D-
STATEMENT OF DIFFERENCES
------------------------
The degree symbol shall be expressed as [d].
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements contained in Item 1 of Form 10-K for the period ended
December 31, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 78
<SECURITIES> 56,438
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 65,504
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 65,504
<TOTAL-LIABILITY-AND-EQUITY> 65,504
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,947
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,947
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<PAGE>
