UNITED STATES
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 15, 2000
CITIZENS FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Kentucky 0-20148 61-1187135
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
12910 Shelbyville Road, Louisville, Kentucky 40243
(Address of principal executive offices)
(502) 244-2420
(Registrant's telephone number)
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CITIZENS FINANCIAL CORPORATION, Form 8-K:
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER
On June 15, 2000, the Company was informed of an action filed against its
subsidiary, United Liberty Life Insurance Company ("United") by two
policyholders in the Butler County (Ohio) Court of Common Pleas. The Company
acquired United in May, 1998. The complaint in the action refers to a
particular class of life insurance policies that United issued over a period
of years ending around 1971. The complaint alleges that United has been
obligated under these policies to pay dividends to all holders of these
policies as a group equal to 25% of United's net gain from operations each
year and that United's actual dividend payments from 1993 through 1999 were
less than the required amount. The complaint does not specify the amount of
the alleged underpayment but it implies that the maximum amount would be
about $1 million. The plaintiffs also allege that United is liable to pay
punitive damages, also in an unspecified amount, for breach of an implied
covenant of good faith and fair dealing to the plaintiffs in relation to the
dividends. The plaintiffs are seeking to have the action certified as a class
action on behalf of all other policyholders whose policies were still in
force in 1993.
United has filed its answer denying the material allegations of the complaint
and intends to defend the action vigorously. The Company expects that the
parties will next engage in pre-trial discovery proceedings, in relation both
to the plaintiffs' underlying allegations and their request for class action
certification. At this early stage of the litigation, the Company is unable
to determine whether an unfavorable outcome of the action is likely to occur
or, alternatively, whether the chance of such an outcome is remote.
Therefore, at this time, management has no basis for estimating potential
losses, if any.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
CITIZENS FINANCIAL CORPORATION
/s/ Lane A. Hersman
BY:-------------------------------------
Lane A. Hersman
Executive Vice President
Date: July 19, 2000
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