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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: May 18, 1999
FRANKLIN AMERICAN CORPORATION
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(Exact name of Registrant as specified in its charter)
State of Incorporation: Tennessee
Commission File Number: 0-18748
I.R.S. Employer Identification Number: 62-1365451
377 Riverside Drive, Fourth Floor, Franklin, Tennessee 37068-1389
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(Address of principal executive offices)
Registrant's telephone number, including area code: (615) 790-0464
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(Former name or former address, if changed since last report)
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FRANKLIN AMERICAN CORPORATION
ITEM 5. OTHER EVENTS.
On April 20, 1999, the Insurance Department of the State of
Mississippi (the "Department") issued Notices of Administrative Supervision
(the "Notices") with respect to the following Subsidiaries of the Company, each
of which is an insurance company domiciled in the State of Mississippi:
Franklin Protective Life Insurance Company, and Family Guaranty Life Insurance
Company (the "Mississippi Subsidiaries"). Each Notice states that the
Commissioner of Insurance (the "Commissioner") has received documentary
information that as of March 29, 1999 a change of control of the Company may
have occurred without the prior approval of the Commissioner as required under
Mississippi law as a result of a transaction between the Thunor Trust (which
owns 84% of the outstanding common stock of the Company) and St. Francis of
Assisi Foundation. The Notice recites that on April 29, 1999 documents were
filed with the Department that indicate that, contrary to information
previously received by the Department, St. Francis of Assisi Foundation is not
the "sole owner and sole beneficiary" of the Thunor Trust, but is only an
additional grantor of funds and an additional beneficiary.
On May 10, 1999 the Department petitioned the Chancery Court of Hinds
County, Mississippi to place the Mississippi Subsidiaries in Rehabilitation,
which petition was granted. The Order of Rehabilitation entered by the Court
states that it appears to the Court that "management of (the Mississippi
Subsidiaries) is unable to substantiate to the Commissioner of Insurance of the
State of Mississippi the asset capitalization it has claimed."
On May 11, 1999 the Franklin American Life Insurance Company, a
Tennessee domiciled Subsidiary of the Company, consented to be placed in
Rehabilitation.
The Orders of Rehabilitation provide for proceedings similar to a
receivership, whereby each state's Commissioner is to take possession of the
assets of the Subsidiaries and to administer them under the general supervision
of the court and all title of the assets will be vested in the Commissioner as
Rehabilitator. The Commissioner(s) will conduct the business of each Subsidiary
and take all steps that such Commissioner deems necessary and appropriate to
reform and revitalize the Subsidiaries.
It has been alleged that a substantial portion of the Subsidiaries
assets have been misappropriated. The extent of the impairment of the assets of
the Subsidiaries due to the alleged misappropriation cannot be determined at
this time, pending the recovery of those assets which are the subject of a
lawsuit filed in the United States District Court for the Middle District of
Tennessee by the Subsidiaries against Liberty National Securities, Inc. a
Michigan corporation which served as custodian for the Subsidiaries.
At such time as the Company is able to verify the extent of the losses
and verify the accuracy of its financial statements the Company plans to file
its 10-QSB for the quarter ended March 31, 1999.
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Commission File No. 0-18748
FRANKLIN AMERICAN CORPORATION
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: May 17, 1999
FRANKLIN AMERICAN CORPORATION,
REGISTRANT
BY: /S/ John A. Hackney
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John A. Hackney, Chairman and
Chief Executive Officer
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