SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) May 21, 1997
HOME STATE HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-22016 13-3429087
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Three South Revmont Drive, Shrewsbury, NJ 07702
(Address of Principal Executive Offices) (zip code)
Registrant's telephone number, including area code (908) 935-2600
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(Former Name or Former Address, if Changed Since Last Report
<PAGE>
Item 5. Other Events
As disclosed in its May 21, 1997 press release, Home State Holdings,
Inc. (the "Company") has incurred a substantial operating loss for the first
quarter of 1997. In addition, as discussed in its press release of June 5, 1997,
the Company's insurance subsidiaries have ceased writing new business and
certain of such subsidiaries have ceased accepting renewals of existing
business. Insurance subsidiaries in certain states are under regulatory
administrative supervision. Certain regulatory bodies may also require the
appointment of a receiver to manage the operations of one or more subsidiaries.
The Company has, to date, not filed its Form 10-Q for the first quarter
of 1997 as it continues to investigate the reasons for the operating loss in
such quarter. The magnitude of such operating loss has substantially reduced the
book value of the Company's equity from the amount reported at year end 1996.
The Company is consulting with its independent accountants to determine
whether there will be any effect on periods previously reported. Accordingly,
until such determination is made, the Company's financial statements for the
year ended December 31, 1996, and the related audit report thereon, should not
be relied upon.
Also, as disclosed in the June 5, 1997 press release, the Company is in
violation of the covenants in agreements with its banks and subordinated note
holders and it is unlikely that the proceeds from any sale of the Company's
insurance subsidiaries and other assets would be sufficient to discharge those
obligations.
The Company's May 21, 1997 and June 5, 1997 press releases are filed as
exhibits to this Report.
CAUTIONARY STATEMENT
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. This Form 8-K or any other written or
oral statements made by or on behalf of the Company may include forward-looking
statements which reflect the Company's current views with respect to future
events and financial performance. These forward-looking statements are subject
to certain uncertainties and other factors that could cause actual results to
differ materially from such statements. These uncertainties and other factors
(which are described in more detail under the caption "Safe Harbor Disclosure"
in Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations in the Company's Form 10-K for the year ended December 31,
1996 and in other documents filed with the Securities and Exchange Commission)
include, but are not limited to, uncertainties relating to general economic
conditions and cyclical industry conditions, uncertainties relating to
government and regulatory policies, volatile and unpredictable developments
(including catastrophes), the legal environment, uncertainties of the reserving
process and the competitive environment in which the Company operates. The
words "believe," "expect," "anticipate," "project" and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of their
dates. The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1. May 21, 1997 press release of the Company.
2. June 5, 1997 press release of the Company.
<PAGE>
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.
Date: June 9, 1997 HOME STATE HOLDINGS, INC.
By: /s/ Mark S. Vaughn
---------------------------
Mark S. Vaughn, President
HOME STATE HOLDINGS, INC.
[GRAPHIC OMITTED]
Press Release
For More Information, Contact: For Immediate Release
Investor Relations - (908) 935-2736 May 21, 1997
Shrewsbury, NJ - May 21, 1997 - Home State Holdings, Inc. (NASDAQ-HOMS)
announced today that it incurred a substantial operating loss for the first
quarter of 1997 resulting primarily from unanticipated loss development below
the attachment points of reinsurance coverage, losses for the 1997 year and
related adjustments to reinsurance profit sharing, deferred acquisition costs
and other assets. The net loss brings statutory surplus in its insurance company
subsidiaries to a level approaching regulatory required minimums and, as a
result of these losses, the Company is in violation of certain covenants in
agreements with its banks and its subordinated note holders. The Company is
continuing to work with its financial advisor, Donaldson, Lufkin & Jenrette, in
evaluating all of its alternatives in its efforts to obtain an infusion of
capital or other support which will be required for the operations of its
insurance company subsidiaries.
CAUTIONARY STATEMENT
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. This press release or any other written or oral
statements made by or on behalf of the Company may include forward-looking
statements which reflect the Company's current views with respect to future
events and financial performance. These forward-looking statements are subject
to certain uncertainties and other factors that could cause actual results to
differ materially from such statements. These uncertainties and other factors
(which are described in more detail elsewhere in documents filed by the Company
with the Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended December 31, 1996) include, but are not
limited to, uncertainties relating to general economic conditions and cyclical
industry conditions, uncertainties relating to government and regulatory
policies, volatile and unpredictable developments (include storms and
catastrophes), the legal environment, the uncertainties of the reserving process
and the competitive environment in which the Company operates. The words
"believe," "expect," "anticipate," "project," "plan," "expect" and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
their dates. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Home State Holdings, Inc. is a property and casualty insurance holding company
primarily engaged in providing standard and preferred personal and commercial
auto insurance through its subsidiaries in New Jersey, New York, Pennsylvania,
Connecticut, Delaware, West Virginia, Georgia and Florida. Home State Holdings,
through several of its financial service subsidiaries, is engaged in certain
insurance related financial services activities.
HOME STATE HOLDINGS, INC.
[GRAPHIC OMITTED]
Press Release
For More Information, Contact: For Immediate Release
Investor Relations - (908) 935-2736 June 5, 1997
Shrewsbury, NJ - June 5, 1997 - Home State Holdings, Inc. (the "Company")
(NASDAQ-HOMS) announced today that it is no longer engaged in discussions with
any potential investors to provide funding of its insurance company subsidiaries
as a group, namely, Home State Insurance Company, Quaker City Insurance Company,
Pinnacle Insurance Company, Westbrook Insurance Company and New York Merchant
Bakers Insurance Company (the "Subsidiaries") and that the Company has notified
all jurisdictions that, subject to any applicable regulatory requirements its
Subsidiaries will cease writing new business. The Company also announced that
the New York Insurance Department has directed both Home Mutual Insurance
Company of Binghamton, New York, a managed mutual, and New York Merchant Bakers
Insurance Company to cease accepting renewals of existing policies with the
exception of personal auto business at New York Merchant Bakers. Management is
continuing to explore possible interest of third parties in the acquisition of
any of its Subsidiaries on a stand-alone basis. Any Subsidiaries which are not
sold will continue in run-off status to wind up their affairs. The Subsidiaries
domiciled in the states of Connecticut, Georgia, New Jersey and Pennsylvania are
under administrative supervision in those states. Additionally, one or more of
the insurance regulatory bodies in which the Subsidiaries are domiciled may
require the Subsidiary over which it has jurisdiction to enter into a Consent
Order to Rehabilitation which would provide for the appointment of a receiver to
manage the operations of such. The Company also announced that the services of
Donaldson, Lufkin & Jenrette, which had been assisting the Company in its
efforts to obtain additional capital, have been discontinued. The Company is in
violation under certain covenants in agreements with its banks and its
subordinated note holders and it is unlikely that the proceeds from a sale of
its Subsidiaries and other assets will be sufficient to discharge those
obligations.
CAUTIONARY STATEMENT
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. This press release or any other written or oral
statements made by or on behalf of the Company may include forward-looking
statements which reflect the Company's current views with respect to future
events and financial performance. These forward-looking statements are subject
to certain uncertainties and other factors that could cause actual results to
differ materially from such statements. These uncertainties and other factors
(which are described in more detail elsewhere in documents filed by the Company
with the Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended December 31, 1996) include, but are not
limited to, uncertainties relating to general economic conditions and cyclical
industry conditions, uncertainties relating to government and regulatory
policies, volatile and unpredictable developments (include storms and
catastrophes), the legal environment, the uncertainties of the reserving process
and the competitive environment in which the Company operates. The words
"believe," "expect," "anticipate," "project," "plan," "expect" and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
their dates. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Home State Holdings, Inc. is a property and casualty insurance holding company
primarily engaged in providing standard and preferred personal and commercial
auto insurance through its subsidiaries in New Jersey, New York, Pennsylvania,
Connecticut, Delaware, West Virginia, Georgia and Florida. Home State Holdings,
through several of its financial service subsidiaries, is engaged in certain
insurance related financial services activities.
