Presidential Life says shareholder's tax filing under investigation

By Lisa Kerner

Charlotte, N.C., Dec. 10 - Presidential Life Corp. said it discovered "several irregularities" related to the 2007 tax return filed by the Kurz Family Foundation, Ltd.

According to a Presidential Life news release, the filing was made as part of the foundation's application to the New York State Insurance Department for approval of its acquisition of a controlling interest in Presidential Life.

Presidential Life's special committee of independent directors began an internal investigation into the matter. Leading the investigation is independent counsel Orrick, Herrington & Sutcliffe LLP.

As a result of the investigation, Herbert Kurz, an officer and director of the foundation, was removed as chairman of Presidential Life. He remains a company director because the board does not have power to remove him under Delaware Law, the company said.

The foundation beneficially owns approximately 20.8% of Presidential Life's outstanding common stock, according to the release.

Presidential Life said the foundation's 2007 tax return "revealed issues concerning potential self-dealing by Mr. Kurz and improper use of charitable assets for personal expenses."

The company also removed chief financial officer Charles Snyder, who signed the foundation's tax return as a paid preparer. Dominic F. D'Adamo was appointed acting CFO.

Snyder and the foundation have been subpoenaed by the New York State Insurance Department, according to Presidential Life.

"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," William M. Trust Jr., lead independent director of Presidential Life's board, said in the release.

Kurz wants board out

On Monday, Presidential Life urged its shareholders to reject the proposals put forth by Kurz, who is also the company's former president and chief executive officer.

In November, Kurz announced that he had filed a preliminary consent solicitation with the SEC in his bid to remove all members of Presidential Life's board of directors except himself and replace them with his nominees.

Kurz said he also wants to amend the Nyack, N.Y., life insurance company's bylaws to fix the size of the board at nine members.

If Kurz's nominees are elected, Kurz intends to replace the current CEO and president, Donald Barnes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.