Citizens Financial Corporation Form 8-K
UNITED
STATES
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 report) October
21, 2005
CITIZENS
FINANCIAL CORPORATION
(Exact
name of registrant as specified in its charter)
KENTUCKY 0-20148 61-1187135
(State of incorporation) (Commission
File
Number)
(IRS
Employer
Identification No.)
12910
SHELBYVILLE ROAD
LOUISVILLE,
KENTUCKY 40243
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (502)
244-2420
Not
Applicable
Former
name or former address, if changed since last report
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the securities Act (17
CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17
CFR 240.13e-4(c))
Section
8 - Other Events
Item
8.01. Other Events.
On
October 21, 2005, a Final Order and Judgment was entered by an Ohio state court
in an action brought against the Registrant’s wholly-owned subsidiary United
Liberty Life Insurance Company (“United Liberty”) by two policyholders in 2000.
This litigation is described in Item 3 of the Registrant’s Form 10-K for the
year ended December 31, 2004 filed on March 31, 2005. The Final Order and
Judgment approved the provisional Settlement Agreement dated October 8, 2004,
also described in that Form 10-K. The Final Order and Judgment will become
final
and effective unless an appeal is taken during the appeal period, which expires
November 20, 2005.
The
Complaint in this action referred to a class of life insurance policies,
including related certificates of participation, that United Liberty issued
over
a period of years ending around 1971 (known as “Five Star Policies”). It alleged
that United Liberty’s dividend payments on these policies from 1993 through 1999
were less than the amounts required by the certificates of participation. It
did
not specify the amount of the alleged underpayment but implied a maximum of
about $850,000. The plaintiffs also alleged that United Liberty 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.
As
a
result of the Settlement Agreement, which applies to all holders of the Five
Star policies wherever they reside, the Registrant recognized as of December
31,
2004 an obligation for future payments to the policyholders and their attorneys
totaling $825,000.
The
$825,000 obligation for future payments under the Settlement Agreement consists
of [i] up to $500,000 payable to all persons who owned Five Star Policies that
were still in force in 1993, [ii] $315,000 in attorneys’ fees payable to counsel
for the class and [iii] a $10,000 incentive award payable to the lead plaintiffs
for the class.
The
$500,000 portion of the settlement is payable in respect of dividend obligations
on the Five Star Policies from 1993 through 2000 and is to be paid in three
annual installments. Under the Settlement Agreement, the Registrant is required
to make the first payment on or before January 19, 2006 (the “Initial Payment
Date”). The attorneys’ fees and incentive award are also payable by the Initial
Payment Date.
SIGNATURE
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.
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Citizens Financial Corporation
|
|
Registrant
|
Date:
October 27, 2005
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By: Len
E. Schweitzer
|
|
/s/ Len E.
Schweitzer
Vice
President and
Chief
Financial Officer
|
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