Attached files
| file | filename |
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| EX-99.2 - PRESIDENTIAL LIFE CORP | v168659_ex99-2.htm |
| 8-K - PRESIDENTIAL LIFE CORP | v168659_8k.htm |
Presidential
Life Uncovers Apparent Self-Dealing by its Largest Shareholder
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The
Kurz Family Foundation, a charitable foundation controlled by Herbert
Kurz, apparently used charitable assets for personal
expenses
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The
Board of Directors has removed both Mr. Kurz as Chairman of Presidential
Life and Charles Snyder as Chief Financial
Officer
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The
Company has appointed Dominic D’Adamo as Acting Chief Financial
Officer
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Nyack, N.Y. (December 10,
2009) — Presidential Life Corporation ("Presidential Life" or the
“Company”) (Nasdaq: PLFE), today announced that it has recently discovered
several irregularities relating to the 2007 tax return filed by the Kurz Family
Foundation, Ltd. (the "Foundation") as part of an application made by the
Foundation to the New York State Insurance Department (“NYSID”) for approval of
its acquisition of a controlling interest in the Company. Mr. Herbert
Kurz, a director and stockholder of Presidential Life, is also an officer and
director of the Foundation, which is a separate entity from Presidential
Life. The Foundation is the beneficial owner of approximately 20.8%
of Presidential Life's outstanding common stock.
A special
committee of the independent directors of Presidential Life has commenced an
internal investigation into the circumstances surrounding the 2007 Foundation
tax return. The special committee has retained independent counsel,
Orrick, Herrington & Sutcliffe LLP, to lead the investigation.
An
examination of the 2007 Foundation tax return revealed issues concerning
potential self-dealing by Mr. Kurz and improper use of charitable assets for
personal expenses. While the Foundation’s tax returns are unrelated
to Presidential Life, the special committee’s investigation is focused on the
role of Mr. Kurz, who has been responsible for the day-to-day affairs of the
Foundation and who signed the Foundation’s 2007 tax return on behalf of the
Foundation, and of Mr. Charles Snyder, who signed the return as a paid
preparer. Mr. Snyder was acting in a personal capacity in connection
with the Foundation. Mr. Snyder is also the Chief Financial Officer
of Presidential Life.
Upon
discovery of these irregularities, Presidential Life immediately and voluntarily
informed the New York State Insurance Department ("NYSID") of the investigation
and is cooperating with an investigation instituted by the NYS Superintendent of
Insurance into the affairs, conduct and practices of the
Foundation. The NYSID has jurisdiction over the Company's operating
subsidiary, Presidential Life Insurance Company (the "Subsidiary") and persons
controlling the Subsidiary. The NYSID has issued a subpoena to the
Foundation and to Mr. Snyder in connection with certain expenditures made by the
Foundation.
As a
result of the investigation, the Board has removed Mr. Kurz as Chairman of
Presidential Life. Mr. Kurz remains a director of Presidential
Life. Under applicable Delaware law, the Board does not have the
power to remove a director. In addition, the Board of Directors has
removed Mr. Snyder as Chief Financial Officer of Presidential
Life. Mr. Snyder will remain a non-executive employee of the Company,
performing duties at the request of the Board and the Chief Executive Officer to
facilitate the transition to the new CFO.
Presidential
Life also today announced the appointment of Dominic F. D’Adamo as Acting Chief
Financial Officer, effective immediately. Mr. D’Adamo was, most
recently, Senior Vice President of Finance at EmblemHealth Inc. from 2003 to
2008. Previously, he was Managing Director and Corporate Controller
of Marsh Inc. from 1976 to 2003. Mr. D’Adamo has a M.B.A. and a
B.B.A. from Baruch College of the City University of New York. He is
a licensed CPA and a member of the American Institute of Certified Public
Accountants. Mr. D’Adamo also served as a member of the AICPA
Insurance Agents & Brokers Task Force.
“This
matter does not involve the financial statements or operations of Presidential
Life and will have no impact on Presidential Life's financial condition, results
of operations or cash flow. The Board of Directors expects the
highest standards from its directors and executives and, as a result, concluded
these changes were in the best interests of safeguarding the integrity and
values of Presidential Life,” said Mr. William M. Trust Jr., the Lead
Independent Director of the Board. “We are delighted that an
executive of the caliber and experience of Mr. D’Adamo was readily available to
step into the role of Acting Chief Financial Officer. We have no
doubt that Mr. D’Adamo will fit in seamlessly as we progress with our strategic
business plan to deliver value to stockholders and will help assure a smooth
transition until a permanent CFO is named. As ever, the Board remains
committed to the highest standards of corporate governance.”
Background
of the Investigation
The
Independent Committee of the Board of Directors of Presidential Life discovered
the irregularities in connection with its due diligence relating to evaluating
the Consent Solicitation being conducted by Mr. Kurz. The discovery
was made upon review of the application made to the NYSID by Mr. Kurz and the
Foundation in connection with Mr. Kurz’s transfer to the Foundation of a
controlling interest in the Company. Mr. Kurz is an officer and
director of the Foundation, and his counsel has represented to the NYSID that
Mr. Kurz is the "individual . . . responsible for and in charge of the day to
day affairs of the Foundation."
Under the
New York Insurance Law, Mr. Kurz and the Foundation were required to file an
application for and obtain the approval of the NYSID before the transfer of a
controlling interest to the Foundation (in October 2008). Instead,
Mr. Kurz filed the application late, in March 2009. The 2007 Return
of Private Foundation on IRS Form 990-PF (the "2007 Return"), which Mr. Kurz had
signed as an officer of the Foundation, was attached to that
application.
Preliminary
reports prepared by counsel to the investigation committee have been provided to
the NYSID pursuant to its request. The preliminary reports conclude
that Mr. Kurz and the Foundation (through Mr. Kurz) likely engaged in
improper self-dealing, made taxable expenditures and used the Foundation’s
assets in a manner that is inconsistent with its charitable status under Section
501(c)(3) of the Internal Revenue Code.
About
Presidential Life
Presidential
Life Corporation, through its wholly owned subsidiary Presidential Life
Insurance Company, is a leading provider of fixed deferred and immediate
annuities and life insurance products to financial service professionals and
their clients. Headquartered in Nyack, New York, the Corporation was founded in
1969 and, through the Insurance Company, markets its product in 49 states and
the District of Columbia. For more information, visit our website
www.presidentiallife.com.
Forward
Looking Statement
This
press release contains forward-looking statements within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to, statements
about our future plans and business strategy and expected or anticipated future
events and performance.
These
forward-looking statements involve risks and uncertainties that are discussed in
our filings with the Securities and Exchange Commission, including economic,
competitive, legal and other factors. Accordingly, there is no
assurance that our plans, strategy and expectations will be
realized. Actual future events and results may differ materially from
those expressed or implied in forward-looking statements.
Contacts:
Brunswick
Group
Stan Neve
/ Greg Faje
212-333-3810