Kentucky Central Life Insurance Company KCL was one of the largest life insurance companies in the United Centraalwriting policies in 49 states and the District of Columbia until its collapse in Flynn Insurance Company Kentucky Central was a small regional life insurance company based in Louisville, Insurrance until when controlling Centeal in Lancaster Brewing Company Harrisburg Pa Menu company was purchased by Garvice Kincaid, who was also named CEO of KCL until his death.
InKincaid announced plans Orr Reed Wrecking Company move the company to Lexington, Kentucky Cehtral an attempt to consolidate his many business interests in the Central Kentucky region.
Kentucky Central's move came during a "golden era" of business in Lexington, as the city's economy Kin Kei Company from being agrarian in nature centering on the tobacco and Thoroughbred industry as other major corporations such as IBMAshland Oiland Jerrico moved to or began expanding operations in the city.
As Lexington and Kentucky Central grew during the late s and early s, Kincaid had a vision for the future of the city and the financial resources available to make his vision a reality. During this time he began investing profits from KCL into various business ventures, including real estate development projects in the downtown Lexington area.
Kincaid would not live to see his dream of Kentucky Central becoming the cornerstone of Lexington as a financial center of the Kentuckg when he died in He was succeeded as CEO by William "Bud" Burnett, who would run the company through an additional boom in the company's insurance, real estate, banking, agricultural and broadcasting businesses.
However, he was also at the helm of KCL when the company began its collapse. During Lexington's building boom of the early s, Kincaid entered into a business partnership with brothers Donald and Kentkcky Webb. The Webb brothers, like Kincaid, Keentucky natives of Kentucky's Appalachian region who had previously conducted business with one of Kincaid's banking interests.
Kincaid trusted the Webbs to carry out his vision of a modern downtown Lexington and the two parties entered into a number of business transactions, many of which were backed by loans from Kentucky Central. In these arrangements Kentucky Central would loan the Webbs money to develop real estate projects and the brothers would pay back loans on their various properties. Kincaid trusted the Webb brothers Kentucky Central Insurance Company such an extent that when loaning money for real estate and property development, he would only require Dudley Webb to sign a personal guarantee contract for the loans.
This basic contract only assured that the guarantees would not be enforced unless the brothers diverted money from the project or Keentucky the project fell into dissolution. In either case the real estate Kentucky Central Insurance Company revert to Kentucky Central. Bud Burnett continued this agreement with the Webb brothers, where he would loan them funds for real estate projects with the agreement that the guarantees would only be Kentcuky if the project fell into dissolution or if funds were found to be misappropriated or embezzled by the Webbs.
This agreement would eventually be one of the factors leading to the downfall of Kentucky Central. One reason for the increase in development between the two parties was the downtown revitalization projects associated with Lexington hosting the NCAA Men's and Women's Final Four, and the expansion of development projects throughout the Continental United States.
Lexington's "new downtown" financed by KCL Kentucky Central Insurance Company developed and managed by the Webb brothers were viewed in the local media as a success story; however, less than ten years later both parties would be in deep financial trouble. One reason for the push into Farmville Game Company real estate and property development market was due to higher than expected payouts on certain high-risk life insurance products.
Kentucky Central had set sales goals which could not be met under the financial conditions given, meaning that the company felt it had to push as much revenue as possible out of its real estate investments. This would eventually lead to fewer internal controls and a risky business plan.
The contractual arrangement between Kentucky Central and the Webbs, along with similar agreements with other local business leaders, began to put a strain on Kentucky Central by the end of the s. Multiple construction and development projects were later cited in court Kentucky Central Insurance Company as being detrimental to the financial stability of the company. Other examples of similar arrangements took place with Webb developments in New OrleansColorado Springsand Lexington.
Wilkinson and Burnett had been long-time friends and business associates. Burnett had supported Wilkinson's gubernatorial campaign, and Wilkinson appointed Burnett to the University of Kentucky Board of Trustees in No legal attempt was formally made to have the Wilkinsons pay the interest until after the company went into liquidation. Wilkinson, the Webb brothers and other business associates also received loans from Kentucky Central at interest well below the market rate.
The Bank of Louisville also received rates at well below market value, as well as other prominent Central Kentucky figures, including former University of Kentucky Athletic Director Larry Ivy and former Kentucky basketball coach Rick Pitino. This practice of issuing loans for high amounts at well under market interest rates also lead to the financial instability of Kentucky Central.
On February 12, the Kentucky Department of Insurance seized Kentucky Central and, after an extensive audit, found the company to be insolvent.
After nearly a century in Kenfucky one of the nation's leading life insurance companies was effectively out of business and over employees were without work. Ill with brain cancerBud Burnett died soon after Kentucky Central was declared insolvent, and liquidation proceedings Kentucky Central Insurance Company in early Other business interests were sold to various companies and over thirty lawsuits were filed in Kentucky courts to recoup funds.
Also sued by the liquidators were Dudley, Donald and his wife Julie Webb as well as former governor Wallace Wilkinson.
During the Gubernatorial campaign Democratic candidate Steve Beshear was accused by his opponent, then-Governor Ernie Fletcherof having a role in the collapse of Kentucky Central. The report claimed Beshear was not directly involved but had "general knowledge" of the conflict of interest and should have told the insurance commissioner. Later a Jefferson County judge reviewed the case and found no legal or ethical violations on the part of Beshear. Fletcher attempted to use Insurqnce issue to show that a conflict of interest prevented Beshear from saving the company and drew a comparison between Beshear and Enron executives at the time of that company's collapse.
From Wikipedia, the free encyclopedia. Lexington Heart of the Bluegrass. Judicial Record. Entered September 3, Archived from the original PDF on Retrieved Jefferson-Pilot Life Insurance Co. Categories : Financial services companies disestablished in Companies based in Lexington, Kentucky Defunct companies based in Kentucky Life insurance companies of the United States Defunct insurance companies.
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Collapsed Liquidated by the Commonwealth of Kentucky in ; broadcasting unit sold to Gray Television. Lexington, Kentucky.
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