Says special committee of independent directors has commenced an internal investigation
Presidential Life has discovered irregularities relating to the 2007 tax return filed by the Kurz Family Foundation, as part of an application made by the foundation to the New York State Insurance Department for approval of its acquisition of a controlling interest in the company.
The company said that 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, to lead the investigation.
Incidentally, 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. 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.
According to Presidential Life, 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 it and who signed the foundation’s 2007 tax return on behalf of it, and of Mr Charles Snyder, who signed the return as a paid preparer.
The NYSID has issued a subpoena to the foundation and to Mr Snyder in connection with certain expenditures made by the foundation. The board has removed Mr Kurz as chairman of Presidential Life. He however remains a director of the company.
William Trust, lead independent director of the board of Presidential Life, said: “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.”