FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[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
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________ to _______________
Commission File Number 0-12450
CAPITAL INDUSTRIES, INC.
(By the Capital Industries Liquidating Trust)
(Exact name of registrant as specified in its charter)
INDIANA 35-6624860
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
263 Sioux Circle, Noblesville, Indiana 46060
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code:
(317) 773-1010
Securities Registered Pursuant to Section 12(b) of the Act:
NONE
Securities Registered Pursuant to Section 12(g) of the Act:
N/A
(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. [x] YES NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405,
Regulation S-K (ss. 229.405 of this chapter) 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.
The aggregate market value of the issuer's voting stock held by non-affiliates,
as of December 31, 1996, was $__________ N/A.
The number of shares of the Registrant's Common Stock, without par value,
outstanding as of December 31, 1996, was 0 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The Annual Report to unitholders for the year ended December 31, 1996, is
included herein as Part II.
Page 1 of 13 Pages
This Form 10-K is being filed by the Capital Industries Liquidating
Trust (the "Trust") under the filing codes and Commission file number of Capital
Industries, Inc ("Capital Industries"). Capital Industries dissolved on April
24, 1996 and filed a Form 15 on June 27, 1996 following the formation of the
Trust and the distribution of all of Capital Industries' assets to its
shareholders and the Trust. However, pursuant to discussions with the
Commission's Staff in connection with the Commission's review of the proxy
materials related to the liquidation of Capital Industries and the formation of
the Trust, the Trust agreed to file its audited financial statements with the
Commission under cover of Form 10-K using the file number of Capital Industries,
without necessarily complying with the other requirements of Form 10-K. The
audited financial statements of the Trust are included herein in Part II and the
Financial Data Schedule is included herewith as Exhibit 27. The remaining
information required by Form 10-K is not included in this Form 10-K.
Item II Annual Report to Unitholders
CAPITAL INDUSTRIES LIQUIDATING TRUST
Financial Statements
For the Period From Inception (April 24, 1996) to December 31, 1996
Report of Independent Accountants
To the Unitholders
Capital Industries Liquidating Trust
We have audited the accompanying statement of net assets in liquidation of
Capital Industries Liquidating Trust as of December 31, 1996, and the related
statements of changes in net assets in liquidation, and cash flows for the
period from inception (April 24, 1996) to December 31, 1996. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit 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
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
As described in Note 1, Capital Industries Liquidating Trust was established to
liquidate the remaining assets and liabilities of Capital Industries, Inc. upon
dissolution of the Company. As a result, the financial statements are prepared
on a liquidation basis of accounting.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation of Capital Industries
Liquidating Trust as of December 31, 1996, and the changes in its net assets in
liquidation and its cash flows for the period from inception (April 24, 1996) to
December 31, 1996, in conformity with generally accepted accounting principles
applied on the basis of accounting described in the preceding paragraph.
/s/ Coopers & Lybrand L.L.P.
Indianapolis, Indiana
February 21, 1997
Statement of Net Assets in Liquidation
as of December 31, 1996
ASSETS
Current assets:
Cash and cash equivalents $ 75,783
Other current assets 506
----------
Total current assets 76,289
Assets held by HCT Trust 778,274
Land and land improvements, net of depreciation 222,150
Building, net of depreciation 352,100
----------
Total assets 1,428,813
----------
LIABILITIES
Current liabilities:
Accounts payable and other accrued expenses 35,354
----------
Total liabilities 35,354
----------
Net assets $1,393,459
==========
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets in Liquidation for the period from inception
(April 24, 1996) to December 31, 1996
Income:
Rental $ 40,000
Interest 26,250
Miscellaneous 9,427
-----------
Total income 75,677
Trustee expenses 40,005
Rental expense 18,599
Insurance expense 19,739
Depreciation expense 6,900
Other 11,259
-----------
Total expenses 96,502
-----------
Decrease in net assets from operations (20,825)
Net assets, beginning of period 0
Transfer of net assets from Capital Industries, Inc. 1,865,777
Distribution to beneficiaries (451,493)
-----------
Net assets, end of period $ 1,393,459
===========
The accompanying notes are an integral part of these financial statements.
Statement of Cash Flows
for the period from inception (April 24, 1996) to December 31, 1996
Cash flows from operating activities:
Decrease in net assets from operations $ (20,825)
Depreciation and amortization 18,550
Adjustments to reconcile decrease in net
assets from operations to net cash used
in operating activities:
Increase in assets held by HCT Trust (11,372)
Decrease in accrued expenses (21,095)
---------
Net cash flows used in operating activities (34,742)
---------
Cash flows from investing activities:
Net cash transferred in from Capital Industries, Inc. 562,018
---------
Net cash flows from investing activities 562,018
---------
Cash flows from financing activities:
Distribution to unitholders (451,493)
---------
Net cash flows used in financing activities (451,493)
---------
Net decrease in cash 75,783
Cash, beginning of period 0
---------
Cash, end of period $ 75,783
=========
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
1. Formation of Capital Industries Liquidating Trust:
Haygood Limited Partnership (Haygood) and Capital Industries, Inc.
(Capital), entered into an Asset Purchase and Sale Agreement on July 17,
1995, as amended September 28, 1995, whereby Capital agreed to sell to
Haygood substantially all of the assets associated with Capital's wholly
owned subsidiary Truckpro Parts and Service, Inc. (Truckpro). Upon
divestiture of Truckpro, Capital established the Capital Industries
Liquidating Trust (the "Trust") on April 24, 1996. Capital transferred
all remaining assets and liabilities previously owned or owed to the
Trust, and Capital was effectively liquidated. Net assets transferred
from Capital to the Trust were as follows:
Cash and cash equivalents $ 562,018
Assets held by HCT Trust 766,901
Land and land improvements 222,910
Building 358,240
Other assets 12,157
Accrued expenses (56,449)
-----------
Net assets transfer red $ 1,865,777
===========
The 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 the income and proceeds to the Trust beneficiaries in a prompt
and orderly fashion after payment for expenses. The Trust will continue
until all distributions of the Trust estate are completed or at April 24,
1999, whichever occurs first.
2. Summary of Significant Accounting Policies:
a. Liquidation Basis of Accounting: These financial statements are
prepared on a liquidation basis of accounting which is in conformity
with generally accepted accounting principles for entities in
liquidation.
b. Building and Land Improvements: Building and land improvements are
depreciated using the straight-line method over the useful lives of
the assets, estimated to be 20 years for land improvements and 40
years for the building. Expenditures for improving or rebuilding an
existing asset which extends the useful life of the asset are
capitalized.
c. Use of Estimates in the Preparation of Financial Statements: The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions affecting the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenue and expense during the reporting period. Actual amounts could
differ from the estimated amounts.
2. Summary of Significant Accounting Policies, continued:
d. Rental Income: Haygood is currently leasing the Jacksonville, Florida,
property owned by the Trust for $5,000 per month. This rental income
is recognized when earned by the Trust.
e. Income Taxes: The Trust qualifies as a grantor trust under Internal
Revenue Code Sections 671-679 and similar state tax codes. As such,
the Trust is not subject to federal and state income taxes on its
income. The income and expenses of the Trust are passed through to and
are reportable by the beneficiaries for income tax reporting purposes.
3. HCT Trust Agreement:
In accordance with the Agreement, a trust was created (HCT Trust) to
provide a source of funds for indemnification claims made by Haygood, if
any. Upon satisfaction of any claims made by Haygood, the assets of HCT
Trust will revert to the Trust. The HCT Trust Agreement between and among
Capital, Truckpro, and Haygood was entered into as of September 28, 1995.
Assets owned by HCT Trust as of December 31, 1996 are comprised of $550,344
of restricted cash and $227,930 of notes receivable due January 1, 1998
from HD America, Inc. (HDA), a truck parts buying cooperative. Significant
provisions of the HCT Trust Agreement are summarized below:
a. The HCT Trust shall commence on the execution date and have a term of
three years, and will terminate on September 30, 1998.
b. The HCT Trust was not established for the purpose of continuing or
engaging in the conduct of a trade or business.
c. In a consent to assignment, HDA has indicated to the Trust and Haygood
its willingness to consent to an assignment of both the certificates
and the proceeds of the certificates to the HCT Trust, and
subsequently to Haygood, and to make payments under the certificates
either to the HCT Trust or Haygood following such assignments,
provided the certificates remain nonnegotiable following each such
assignment and all debts to HDA have been paid in full.
d. Provided there are no outstanding claims reported by Haygood to the
trustees of the HCT Trust as of the release of funds date, the
trustees shall, upon written notice, distribute the funds and accrued
earnings contained in the HCT Trust to the Trust on December 31, 1996,
December 31, 1997, and the third anniversary of the closing. HCT Trust
distributed $296,236 to the trust on January 6, 1997. There are
currently no such claims being asserted by Haygood.
e. On the termination date, if no claims for indemnification remain
outstanding, Haygood will purchase the remaining unpaid HDA note from
the trustees of the HCT Trust.
4. Fixed Assets
Major classes of fixed assets, net, consist of the following:
Land $ 200,000
Land improvements 22,910
Building 358,240
---------
581,150
Less accumulated depreciation (6,900)
---------
$ 574,250
=========
The Trust initially valued the fixed assets based upon the results of an
appraisal completed on July 24, 1996.
5. Environmental Liability:
Capital was identified as a "potentially responsible party" for clean-up
of environmental pollution which occurred on the Jacksonville, Florida,
property owned by Capital. The liability for Capital's share of the
clean-up costs was transferred to the Trust and management believes that
adequate provision has been made for all obligations.
6. Beneficiaries of the Trust:
The Trust agreement provides that at least annually, and on such other
times as may be determined, the cash and noncash assets comprising a
portion of the Trust Estate may be distributed to the Beneficiaries of
the Trust. The Trust has 273,632 units outstanding as of December 31,
1996. On October 21, 1996, the Trust paid $451,493 as a distribution to
unitholders of the Trust, which represented a distribution of $1.65 per
unit. An additional distribution of $314,677 was made to unitholders of
the Trust on January 14, 1997, which represented a distribution of $1.15
per unit.
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on behalf of the undersigned, thereto duly authorized.
CAPITAL INDUSTRIES LIQUIDATING TRUST
Date: March 27, 1997 By: /s/ Paul A. Shively
----------------------------------
Paul A. Shively, Trustee