The directors of a Northeastern life insurer have moved to take away the titles of two top executives.
The board of Presidential Life Corp., Nyack, N.Y., (Nasdaq:PLFE) says it has removed Herbert Kurz from the post of chairman and Charles Snyder from the post of chief financial officer.
The Presidential Life board says a special committee of independent directors has discovered irregularities relating to the 2007 tax return filed by the Kurz Family Foundation Ltd., New City, N.Y.
Kurz, who is still a director and stockholder of Presidential Life, is also an officer and director of the foundation. The foundation is the beneficial owner of about 21% of Presidential Life’s outstanding common stock, and the foundation and Kurz’ family control about a third of the company’s stock.
In November, Kurz said he planned to ask other Presidential Life shareholders for permission to replace the current directors with a new slate.
The Kurz Family Foundation tax return under scrutiny is part of an application the foundation filed in connection with efforts to seek permission from the New York State Insurance Department to acquire a controlling interest in Presidential Life, the Presidential Life board says. The board says Kurz may have used foundation funds to pay personal expenses.
The Presidential Life board’s special committee has hired an outside law firm, Orrick, Herrington & Sutcliffe LLP, to lead an investigation of the foundation, the board says.
The Presidential Life board says it has told the New York insurance department about the internal investigation and is cooperating with the department’s efforts to investigate the foundation.
The New York department has issued a subpoena seeking information about foundation expenditures to Snyder and to the foundation, the Presidential Life board says.
Kurz says he intends to answer the charges in the course of the investigations, but he declined to provide additional comments.
While the investigations are under way, Kurz will continue to be a Presidential Life director, and Snyder will continue to be a Presidential Life employee, the Presidential Life board says.
The Presidential Life board says Dominic D’Adamo will be the company’s acting CFO. D’Adamo was senior vice president of finance at EmblemHealth Inc., New York, from 2003 to 2008. He was corporate controller of Marsh Inc. from 1976 to 2003.
William M. Trust Jr., the lead independent director on the Presidential Life board, says in a prepared statement that the investigations will have “no impact” on Presidential Life’s financial condition, operating results or cash flow.