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 GREENWICH, Conn., Oct. 15 /PRNewswire/ -- AmBase Corporation ("AmBase" or the "company") announced today net income of $2,880,000 or $0.07 per share and $4,343,000 or $0.10 per share for the third quarter and nine month period, respectively, ended Sept. 30, 1993. These results include an $11.4 million income tax benefit and the accrual of a $7.8 million additional litigation provision. Excluding these items, the company would have reported a net loss of $795,000 or $0.02 per share in the 1993 third quarter and net income of $668,000 or $0.02 per share for the nine month period ended Sept. 30, 1993. The 1993 nine month period also includes $850,000 and $2.45 million of non-recurring other income recognized in the first and second quarter of 1993, respectively.
 For the 1992 third quarter, the company recorded net income of $2,274,000 or $0.05 per share which included income from discontinued banking operations, net of income taxes of $4,414,000 or $0.10 per share. For the nine months ended Sept. 30, 1992 net income was $7,826,000 or $0.19 per share which included $14,712,000 or $0.36 per share of income from discontinued banking operations, net of income taxes. Losses from continuing operations net of income taxes, were $2,140,000 or $0.05 per share and $6,886,000 or $0.17 per share for the third quarter and nine months ended Sept. 30, 1992, respectively.
 Included in the results reported above, the company recognized an $11.4 million income tax benefit in the third quarter and nine month period ended Sept. 30, 1993, as a result of management's reassessment of the overall tax
liability position of the company. Management's considerations included, among other items, the completion of the review of the 1981 to Sept. 25, 1985 consolidated tax returns by the Congressional Committee on Taxation, the filing of the 1992 tax return (which resulted in the receipt of a $9.4 million refund) and new tax legislation with respect to intangibles.
 During the third quarter, the company reviewed the status of litigation pending against the company, including lawsuits recently filed, as well as costs associated with defending pending and threatened litigation against the company. As a result of this review, the litigation and contingency reserve was increased by approximately $7.8 million in the 1993 third quarter to approximately $37 million at Sept. 30, 1993.
 At Sept. 30, 1993, the company's liabilities and reserves, including certain contingent liabilities, exceeded total assets by approximately $47 million. On that date, the company's remaining assets consisted principally of $52 million of cash and cash equivalents and a $26 million receivable from Home Holdings, Inc., the purchaser of The Home Insurance Company in February, 1991. The company has significant alleged tax liabilities and is a defendant in a number of lawsuits and proceedings, the ultimate outcome of which could have a material impact on its financial condition and results of operations.
 Other Developments
 Other developments during the third quarter are summarized below. A more complete discussion of the Company's affairs is included in AmBase Corporation's Quarterly Report on Form 10-Q for the quarterly period ending Sept. 30, 1993, which is expected to be filed with the Securities and Exchange Commission next week.
 John B. Costello was elected to the board of directors of AmBase during the third quarter. He will serve as a member of the board's Accounting and Audit Committee and Personnel Committee. Mr. Costello, an active private investor, spent twenty-five years in the transportation industry during which he founded and operated companies which were purchased by Ryder Systems, Inc. He subsequently served as president of Ryder's United States Packing and Shipping Company.
 In the third quarter the company received a $2.7 million tax refund with respect to 1984 and a $9.4 million tax refund attributable to a carryback of 1992 losses.
 During the third quarter, the company filed a claim against the United States, in the United States Court of Federal Claims, based upon the impact of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") on its investment in Carteret Savings Bank, FA ("Carteret"), which was placed in receivership on Dec. 4, 1992. Similar so-called "supervisory goodwill" litigation has been commenced in recent years by other financial institutions as well and is pending in various trial and appellate courts. The issues raised are novel and implicate difficult constitutional questions which may well involve lengthy legal proceedings, the ultimate outcome of which cannot be predicted with any degree of assurance. The Company has retained in this matter the legal services of the firm of Gibson, Dunn & Crutcher, as well as Laurence H. Tribe, the Ralph S. Tyler, Jr. Professor of Constitutional Law at Harvard University Law School.
 Also during the third quarter, six former Carteret officers filed suit against AmBase, alleging that AmBase owes them significant "golden parachute" payments as a result of the OTS taking of Carteret and the Resolution Trust Corporation's ("RTC") subsequent actions. The company believes it has
meritorious defenses against these claims. These claims differ from the five other parachute cases the company is defending which allege that certain parachutes were triggered by the sale of The Home Insurance Company and AmBase's subsequent actions and by the text of the parachute contracts. A month long trial of one of the original five parachute cases was held during the third quarter; final briefs have been submitted by both sides.
 At a board of directors meeting held today, the board of directors approved an amendment to the company's existing Shareholder Rights Plan (the "Plan") in order to prevent an inadvertent triggering of its provisions. The amendments modify the Plan so that the ownership threshold which triggers the Plan is now 25 percent of the outstanding Common Stock rather than 15 percent. The company knows of no potential acquiror of the Company. Mr. Bianco, the company's chairman, president and chief executive officer, acquired an additional 75,000 shares in the third quarter, raising his ownership level of outstanding shares to 12.3 percent of outstanding shares. Mr. Bianco informed the board of directors that he may acquire additional shares from time to time through negotiated or open market transactions.
 Summary Results
 (in thousands, except per share data)
 Periods ending Third Quarter Nine Months
 Sept. 30 1993 1992 1993 1992
 Operating revenue $ --- $ 161 $ --- $ 603
 Operating expenses (992) (1,492) (3,249) (4,672)
 Operating loss (992) (1,331) (3,249) (4,069)
 Interest income 262 291 728 866
 Other expense - additional
 litigation provision (A) (7,826) --- (7,826) ---
 Other income -
 termination of management
 agreements (B) --- --- 2,449 ---
 Other income -
 insurance recovery (C) --- --- 850 ---
 Loss from continuing
 operations before
 income taxes (8,556) (1,040) (7,048) (3,203)
 Income tax benefit
 (expense) (D) 11,436 (1,100) 11,391 (3,683)
 Income (loss) from
 continuing operations 2,880 (2,140) 4,343 (6,886)
 Income from discontinued
 banking operations, net
 of income taxes (E) --- 4,414 --- 14,712
 Net income $ 2,880 $ 2,274 $ 4,343 $ 7,826
 Per share data:
 Income (loss) from
 continuing operations $ 0.07 $ (0.05) $ 0.10 $ (0.17)
 Income from discontinued
 banking operations, net
 of income taxes (E) --- 0.10 --- 0.36
 Net income $ 0.07 $ 0.05 $ 0.10 $ 0.19
 Average shares
 outstanding 44,309 40,654 43,902 40,654
 (A) -- This amount represents an additional litigation provision accrued in the third quarter ended September 30, 1993 as an incremental increase to the litigation and contingency reserves.
 (B) -- Represents a payment received in April 1993 by one of the Company's subsidiaries, pursuant to which the subsidiary agreed to the termination of management agreements with Modernfold, Inc.
 (C) -- Represents proceeds received in connection with an insurance settlement received in March 1993.
 (D) -- This amount includes an $11.4 million income tax benefit recorded in the third quarter ended Sept. 30, 1993 as an adjustment to the deferred tax reserve.
 (E) -- On Dec. 4, 1992, the OTS placed Carteret in receivership eliminating the company's ownership interest in Carteret. Accordingly, the consolidated operations of Carteret have been designated as discontinued banking operations. Income from discontinued banking operations reflects the unaudited results of operations of Carteret for the third quarter and nine months ended Sept. 30, 1992.
 -0- 10/15/93
 /CONTACT: Neil L. Cohen, executive vice president and chief financial officer of AmBase, 203-532-2015/

CO: Ambase Corporation ST: Connecticut IN: TRN SU: ERN

TS -- NY045 -- 2871 10/15/93 15:43 EDT
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Publication:PR Newswire
Date:Oct 15, 1993

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