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assets, except for the ICC and North Carolina operating
authorities, for cash and cash equivalents. On August 21, 1992,
Colonial sold its North Carolina authority for $5,000 but
retained its ICC authority.
Colonial invested the proceeds from the sale of its
operating assets almost exclusively in tax-exempt bonds and a
municipal bond fund. Colonial held 18 tax-exempt bonds, 16 of
which were purchased in 1990 and 1991, and 2 of which were
purchased in 1992. One bond was redeemed in 1991, and three
bonds were redeemed in 1992 and 1993. Colonial continued to hold
the remaining 14 bonds as of the end of 1993.
As of October 31, 1993, 2 months prior to the merger,
Colonial held approximately $7.35 million in tax-exempt bonds and
a municipal bond fund and approximately $1,500 in cash. On
December 31, 1993, Colonial liquidated one of its tax-exempt
bonds and its municipal bond fund. The proceeds of this
liquidation together totaled more than $2,550,000. As a result,
Colonial’s cash position increased significantly.
Immediately prior to the merger of Colonial into Central on
December 31, 1993,3 Colonial’s assets and liabilities consisted
of the following:
3The merger agreement provided that the merger would occur 1
second before midnight on Dec. 31, 1993.
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