City Investing Company Liquidating Trust

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-13881

CITY INVESTING COMPANY LIQUIDATING TRUST (Exact name of registrant as specified in its charter)
Delaware (State of organization) 99 University Place, 7th Floor, New York, New York (Address of principal executive offices)		13-6859211 (I.R.S. Employer Identification No.) 10003-4528 (Zip-Code)
Registrant's telephone number, including area code: (212) 473-1918 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Units of Beneficial Interest (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. _X_

At December 31, 1997, there were 38,979,372 Trust Units of Beneficial Interest outstanding. The aggregate market value of the Trust's Units of Beneficial Interest held by non-affiliates of the Trust based on the closing price of the Units on such date of $0.875 per Unit was approximately $34.1 million.

To Our Unit Holders:

The accompanying financial statements set forth the status of the City Investing Company Liquidating Trust (the 'Trust') at December 31, 1997. Wrapped around this report is the January 28, 1998 tax letter, pages A through D, that provides 1997 Federal income tax information relevant to Unit Holders. Please remove the outside wrap-around page carefully, as it should be helpful in calculating your 1997 tax consequences.

The Trust has posted on its world wide web site: http://www.cnvlz.com the financial statements and the tax letter. Quarterly financial statements will be available on the Trust's world wide web site no later than May 15, August 15, and November 15, 1998.

During 1997, the Trust's cash and cash equivalents, investment securities and restricted funds increased by $1,485,000 to $61,752,000. The major assets held by the Trust at this time are investments in U.S. Treasuries with original maturities within one year of purchase. The Trustees believe that these resources are sufficient to meet all anticipated liquidity requirements. The Trust will continue to retain substantial cash and investment reserves pending the resolution of certain legal proceedings discussed in the accompanying report. The Trust settled the underlying liability in the Continental Casualty litigation in December 1997 by a payment of $1,150,000 to the Florida Department of Revenue and expects the $2,965,000 balance of the escrow to be released to it in the near future.

Since the Trust was created, the Trust's objectives have been and continue to be maximizing the return to its Unit Holders and completing the liquidation of all assets and liabilities as efficaciously as possible. We are continuing to make progress and are taking all practical steps to resolve the remaining litigation facing the Trust.

Cordially,

Geo T. Scharffenberger
Trustee

Eben W. Pyne
Trustee

Lester J. Mantell
Trustee

January 28, 1998

For all information about unit holdings: Units held in street name, please communicate with your bank or broker. Registered unit holders, please communicate with ChaseMellon Shareholder Services, transfer agent for City Investing Company Liquidating Trust, at:
telephone: write to: WWW site:	1-800-851-9677 ChaseMellon Shareholder Services 450 West 33rd Street, 15th Floor New York, NY 10001-2697 http://www.chasemellon.com
For current financial and tax information, please go to our world wide web site:
	http://www.cnvlz.com
For all other information please communicate with us at:
write to: Tel: Fax: E-mail address:	CITY INVESTING COMPANY LIQUIDATING TRUST 99 University Place, 7th floor, New York,NY 1003-4528 212-473-1918 212-473-3927 mantell@cnvlz.com

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ITEM 1. BUSINESS

THE TRUST

On September 25, 1985, pursuant to the Plan of Complete Liquidation and Dissolution of City Investing Company ('City') approved by stockholders of City on December 12, 1984, City transferred all its remaining assets and liabilities ('Trust Estate') to the City Investing Company Liquidating Trust (the 'Trust') to assure compliance with Section 337 of the Internal Revenue Code. The common stock transfer books of City were permanently closed on September 25, 1985, and the holders of record of common stock of City as of the close of business on that date became holders of beneficial interest in the Trust on the basis of one unit of beneficial interest for each share of common stock of City held on September 25, 1985. After September 25, 1985, the outstanding certificates that formerly represented shares of common stock of City are deemed to evidence the same number of units of beneficial interest in the Trust.

The City Investing Company Liquidating Trust Agreement ('Trust Agreement') provides that the Trust is organized for the sole purpose of liquidating the Trust Estate in a manner calculated to conserve and protect the Trust Estate, and to collect and distribute to the beneficiaries proceeds therefrom in as prompt and orderly a fashion as possible after the payment of, or provision for, expenses and liabilities. The Trustees are required to distribute to the beneficiaries cash or other property comprising a portion of the Trust Estate as the Trustees may, in their sole discretion, determine may be distributed without detriment to the ability of the Trust to pay or discharge claims, expenses, charges, liabilities and obligations. For information concerning a limitation on the Trust's ability to pay liquidating distributions or dividends imposed in connection with certain pending litigation, see Item 8-Note 8, 'Dividend Restrictions.'

On June 27, 1996, the Trustees extended the time limit of the Trust's existence to September 25, 1998 from September 25, 1996 in order to continue the orderly disposal of assets and the settlement of claims and obligations of the Trust.

ITEM 3. LEGAL PROCEEDINGS

Prior to and after its liquidation, City was named as a party in various litigations that pursuant to the Trust Agreement were assumed and became liabilities of the Trust. For a description of litigation and claims currently pending or threatened which affect the Trust, see Item 8-Note 7, 'Litigation and Other Contingent Liabilities.'

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PART II

ITEM 5. MARKET PRICE OF UNITS

The Trust's Units of Beneficial Interest ('Units') trade as a regular National Association of Securities Dealers Automated Quotation security and appear daily in the list entitled Small Capitalization Issues, with the symbol CNVLZ. This information is also available on the Internet and can be accessed http://www.nasdaq.com. The high and low prices for the Units during 1997 and 1996 were as follows:

	1997		1996
	High	Low	High	Low
First Quarter	$ 1.10	$ 0.94	$ 1.13	$ 0.94
Second Quarter	$ 1.06	$ 0.94	$ 1.19	$ 1.00
Third Quarter	$ 0.99	$ 0.92	$ 1.25	$ 1.13
Fourth Quarter	$ 1.05	$ 0.81	$ 1.13	$ 0.94

As of December 31, 1997, there were approximately 15,000 holders of the Trust's Units of Beneficial Interest. No cash distributions were made in either 1997 or 1996.

In connection with the proceeding entitled Rolo and Tenerelli v. City Investing Company Liquidating Trust, et al., the Trust is unable to make any dividend payments or liquidating distributions without further judicial action. The Trust may have a contingent liability with respect to certain issues raised by the Internal Revenue Service upon audit of tax returns of City Investing Company filed with respect to periods ending on or before September 25, 1985. These issues, if resolved unfavorably to City Investing Company, would result in a substantial liability. As other parties are primarily and jointly responsible for this contingent liability, the Trust is unable to estimate the ultimate cost, if any, of its exposure. The Trust also remains subject to possible claims by the United States Environmental Protection Agency and other third parties.

ITEM 6. SELECTED FINANCIAL DATA

	Years ended December 31
*(in thousands, except per unit data)*		1997			1996			1995			1994			1993
Losses on dispositions of assets, net		$(	1,265	)	$(	834	)	$(	645	)	$(	491	)	$(	974	)
Interest, dividend and other income		3,071			4,210			1,597			1,247			1,079
Net income (loss)		1,485			2,947			452				267		(	523	)
Net income (loss) per unit		0		.04	0		.08	0		.01	0		.01	(	0	.01)
Total assets		66,989			65,504			62,792			62,340			62,073
Book value per unit		1		.72	1		.68	1		.61	1		.59	1		.59

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Trust recorded net income of $1,485,000 ($0.04 per unit) in 1997 compared with $2,947,000 ($0.08 per unit) in 1996 and $452,000 ($0.01 per unit) in 1995. It is difficult to compare amounts in comparable periods, as the financial statements of the Trust are prepared on the basis of accounting used for Federal income tax purposes; that is, amounts are reflected in the financial statements when amounts are received or paid.

In 1997, the net losses on the disposition of assets of $1,265,000 consisted principally of the Continental Casualty Co. settlement of $1,150,000 which was paid from escrow on December 2, 1997. At December 31, 1997 there remains in escrow $2,965,000 which the Trust expects will be released to it in the near future. A settlement of $550,000 was paid from the Tapken v. Brown, et al. escrow in November 1996. The remaining losses on the disposition of assets of $115,000 in 1997, compared to $284,000 in 1996 and $645,000 in 1995 consisted principally of legal fees incurred in connection with the defense of litigation against the Trust. In 1995, a loss of $200,000 was recorded upon the Trust's sale of its limited partnership interest in PACE/City Associates, L.P. ('PCA').

Interest, dividend and other income of $3,071,000 in 1997, $4,210,000 in 1996 and $1,597,000 in 1995, was principally derived from interest earned on investment securities. The decrease in 1997 was primarily due to the timing of maturities of U.S. Treasuries. The increase in 1996 was primarily due to an increase in the amount of interest income collected from investment securities as a result of the 1995 sale of the Trust's interest in PCA along with an increase in interest rates, compared to 1995.

Administrative expenses were $320,000 in 1997, $429,000 in 1996, and $500,000 in 1995. The lower level of administrative expenses in 1997 compared to 1996 and 1995 is primarily due to a reduction in costs of administration of the Trust.

A principal asset of the Trust was its investment in PACE/City Associates, L.P. ('PCA'), a non-public partnership which held an indirect investment in certain printing companies. In accordance with accounting used for Federal income tax purposes, that investment was reflected in the Trust's financial statements at $27,815,000 at December 31, 1994. On March 8, 1995, the Trust received an offer from Kohlberg Kravis Roberts & Co. ('KKR'), the general partner of PCA, to purchase the Trust's limited partnership interest in PCA for $27,821,000. In May 1995, the Trust sold its investment in PCA to KKR for that amount. That investment had been reflected in the Trust's financial statements at $28,021,000 at the time of the Trust's sale of its interest in PCA. The $28,021,000 reflected the capitalization of investment advisory fees incurred in connection with the sale. Accordingly, the Trust recognized a loss of $200,000 in connection with this sale, which is included in losses on dispositions of assets, net, in the accompanying financial statements.

At December 31, 1997, the Trust had cash and cash equivalents, investment securities and restricted funds of $61,752,000. The Trustees believe that such cash resources and investment securities are sufficient to meet all anticipated liquidity requirements.

No cash distributions have been made since May 12, 1990. For information regarding dividend restrictions see Item 8-Note 8 to the financial statements herein.

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ITEM 8. FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT

The Trustees and Holders of Units of Beneficial Interest
City Investing Company Liquidating Trust:

We have audited the accompanying balance sheets of the City Investing Company Liquidating Trust (the 'Trust') as of December 31, 1997 and 1996, and the related statements of operations, cash flows and changes in trust equity for each of the years in the three-year period ended December 31, 1997. These financial statements are the responsibility of the Trust's Trustees. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Trustees, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 2 to the financial statements, the Trust's policy is to prepare its financial statements on the basis of accounting used for Federal income tax reporting purposes. Accordingly, the accompanying financial statements are not intended to present financial position, income and expenses, cash flows and changes in trust equity in conformity with generally accepted accounting principles.

See Note 7 to the financial statements for a description of litigation and other contingent liabilities.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Trust as of December 31, 1997 and 1996, and its income and expenses and its cash flows for each of the years in the three-year period ended December 31, 1997, on the basis of accounting referred to above.

KPMG Peat Marwick LLP
New York, New York
January 28, 1998

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CITY INVESTING COMPANY LIQUIDATING TRUST

STATEMENTS OF OPERATIONS
Year Ended December 31

(in thousands, except per unit data)	1997		1996		1995
Losses on dispositions of assets, net	$(1,265	)	$( 834	)	$( 645	)
Interest, dividend and other income	3,071		4,210		1,597
Total income	1,806		3,376		952
Administrative expenses	321		429		500
Net income	$1,485		$2,947		$452
Net income per unit	$0	.04	$0	.08	$0	.01
Outstanding units	38,979		38,979		38,979

*(in thousands)*	1997	1996
Assets
Cash and cash equivalents	$243	$78
Investment securities	58,541	56,438
Restricted funds	2,968	3,751
Investments	609	609
Real estate	4,628	4,628
Total assets	$66,989	$65,504
Liabilities and Trust Equity
Trust equity	$66,989	$65,504
Total liabilities and trust equity	$66,989	$65,504
See accompanying notes to financial statements.

BALANCE SHEETS
December 31

(in thousands) 1997 1996
Assets
Cash and cash equivalents $243 $78
Investment securities 58,541 56,438
Restricted funds 2,968 3,751
Investments 609 609
Real estate 4,628 4,628
Total assets $66,989 $65,504
Liabilities and Trust Equity
Trust equity $66,989 $65,504
Total liabilities and trust equity $66,989 $65,504
See accompanying notes to financial statements.

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CITY INVESTING COMPANY LIQUIDATING TRUST

STATEMENTS OF CASH FLOWS
Year Ended December 31

STATEMENTS OF CHANGES IN TRUST EQUITY Year Ended December 31
*($ in thousands)*	1997		1996		1995
Cash flows from operating activities:
Net income	$1,485		$2,947		$452
Adjustments to reconcile net income to net cash used for operating activities:
Gain on sale of real estate	0		( 81	)	0
Loss on sale of investment in PCA	0		0		200
Interest income earned on investment in U.S. Treasuries	( 2,377	)	( 3,769	)	( 1,195	)
Net cash used for operating activities	( 892	)	( 903	)	( 543	)
Cash flows from investing activities:
Maturities of investment securities	58,815		70,699		41,370
Purchases of investment securities	( 58,541	)	( 70,579	)	( 68,149	)
Proceeds from sale of investment in PCA	0		0		27,821
Restricted funds	783		462		( 185	)
Proceeds from sale of real estate	0		128		0
Other, net	0		54		( 205	)
Net cash provided by investing activities	1,057		764		652
Net increase (decrease) in cash and cash equivalents	165		( 139	)	109
Cash and cash equivalents at beginning of year	78		217		108
Cash and cash equivalents at end of year	$243		$78		$217

*($ in thousands)*	1997		1996		1995
Balance at beginning of year	$ 65,504		$ 62,557		$ 62,105
Net income	1,485		2,947		452
Balance at end of year	$ 66,989		$ 65,504		$ 62,557
See accompanying notes to financial statements.

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CITY INVESTING COMPANY LIQUIDATING TRUST
Notes to Financial Statements

Note 1 - Organization

The City Investing Company Liquidating Trust (the 'Trust') was created on September 25, 1985, pursuant to an Agreement and Declaration of Trust ('Trust Agreement') by and between City Investing Company ('City') and the three trustees of the Trust ('Trustees'). The Trust Agreement is governed by the laws of the State of Delaware.

On September 25, 1985, pursuant to a Plan of Complete Liquidation and Dissolution approved by stockholders of City on December 12, 1984, City transferred all its remaining assets and liabilities ('Trust Estate') to the Trust to assure compliance with Section 337 of the Internal Revenue Code. The sole purpose of the Trust is to liquidate the Trust Estate in a manner calculated to conserve and protect the Trust Estate, and to collect and distribute to the beneficiaries the income and proceeds therefrom in as prompt and orderly a fashion as possible after the payment of, or provision for, expenses and liabilities.

The common stock transfer books of City were permanently closed on September 25, 1985, and the holders of record of common stock of City as of the close of business on that date became holders of units of beneficial interest in the Trust on the basis of one unit of beneficial interest for each share of common stock of City held on September 25, 1985. After September 25, 1985, the outstanding certificates that formerly represented shares of common stock of City are deemed to evidence the same number of units of beneficial interest in the Trust.

The Trust Agreement, signed on September 25, 1985, set forth a time limit of three years for the disposition of the Trust's assets and distribution to the unit holders unless a later termination was required by the Trustees. As a result of the protracted nature of certain litigation and other claims asserted against the Trust, on September 7, 1988, April 23, 1990, September 2, 1992, June 16, 1994, and June 27, 1996, the Trustees extended the time limit of the Trust's existence to September 25, 1990, September 25, 1992, September 25, 1994, September 25, 1996, and then to, September 25, 1998, respectively.

Note 2 - Significant Accounting Policies

Basis of presentation: The accompanying financial statements have been prepared on the basis of accounting used for Federal income tax purposes. Accordingly, certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred; and assets are reflected at their tax basis.

Valuation of assets and liabilities: The Trust Equity balance on September 25, 1985 was established at an amount equivalent to the number of units of beneficial interest outstanding (38,979,372) multiplied by the average of the high and low trading prices of such units on the first day of trading ($3.1875), or an aggregate of $124.2 million. The fair market value for Federal income tax purposes of each asset other than cash and cash equivalents was determined by that asset's proportionate share of the Trust Equity increased by accounts payable and decreased by cash and cash equivalents at September 25, 1985. The proportionate share of each of these assets was determined by the estimated value of such Trust asset in relation to the estimated value of all of the Trust assets other than cash and cash equivalents. In determining the estimated value of Trust assets, the Trustees evaluated, where appropriate, such factors as City's historical carrying values, expected amounts and dates of realization, prevailing interest rates, available market prices and restrictions with respect to disposition.

Income taxes: For Federal income tax purposes, the September 25, 1985 transfer of assets and liabilities to the Trust and distribution to stockholders of units in the Trust was treated as a distribution of assets and liabilities by City to its stockholders and a contribution by the stockholders of such net assets to the Trust in return for units. The Trust is treated as a grantor trust and not as a corporation. Accordingly, any income or loss of the Trust will not be taxable to the Trust but will be taxable to the unit holders as if the unit holders had themselves realized the income or loss from their undivided interests in Trust assets.

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CITY INVESTING COMPANY LIQUIDATING TRUST
Notes to Financial Statements (continued)

Gains (losses) on dispositions of assets, net: Gains (losses) on dispositions of assets, net, also includes settlement costs and legal fees incurred in connection with the defense of litigation against the Trust.

Net income per unit: Net income per unit is calculated by dividing net income of the Trust by the number of outstanding Units of Beneficial Interest.

Cash and cash equivalents: The Trust considers all investments in money market funds as cash equivalents.

Note 3 - Investment Securities

Investment securities at December 31, 1997 and December 31, 1996 consist of U.S. Treasuries with maturities of less than one year and are carried at cost.

Investment securities at December 31, consist of the following:
	1997			1996
*(in thousands)*	Carrying Value	Cost	Fair Value	Carrying Value	Cost	Fair Value
U.S. Treasuries maturing within one year	$ 58,541	$ 58,541	$ 60,182	$ 56,438	$ 56,438	$ 57,385
The gross unrealized gains on investment securities at December 31, consist of the following:

(in thousands)				1997		1996
Gross unrealized gains				$1,641		$947

Note 4 - Restricted Funds

Restricted funds at December 31, 1997, represents funds held in escrow in connection with City Investing Company Liquidating Trust v. Continental Casualty Co. of $2,965,000 and other of $3,000. At December 31, 1996, restricted funds consisted of funds held in escrow in connection with City Investing Company Liquidating Trust v. Continental Casualty Co. of $3,748,000 and other of $3,000.

Note 5 - Investments

Investments at December 31 are as follows:
*(in thousands)*	1997	1996
Oklahoma Energy Corp.	$27	$27
Global Bancorporation	582	582

Total investments	$609	$609

The Trust holds 3,108,105 shares of Oklahoma Energy Corp., previously known as Cayman Resources Corporation common stock, which are carried at their tax basis. At December 31, 1997 and 1996, the fair market value of the Oklahoma Energy stock, based on quoted market prices, was $137,000 and $124,000, respectively. The Trust holds 10,000 shares of Global Bancorporation which are carried at their tax basis. It is currently projected that a final liquidating distribution will be received by the Trust in respect of those Global Bancorporation shares in the amount of $20,000.

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CITY INVESTING COMPANY LIQUIDATING TRUST
Notes to Financial Statements (continued)

Note 6 - Real Estate

Prior to January 2, 1990 the Trust held an undivided interest in a July 22, 1983 note received from Texas City Investment Company ('Texas City') in connection with a sale of land located in Galveston County, Texas. Texas City failed to fully pay the note in accordance with its terms. On January 2, 1990 the beneficial owners of the note (including the Trust) foreclosed on the property securing the note and the Trust now holds an undivided interest in the property. The Trust's interest in the property is classified as real estate in the accompanying financial statements and valued at the January 2, 1990 fair market value of $4,675,000, less $47,000, the carrying value of two parcels sold on April 15, 1996. The Trust realized a long term gain of $81,000 on the April 15, 1996 sale of approximately two per cent of the real estate.

Note 7 - Litigation and Other Contingent Liabilities

In accordance with the Trust Agreement, the Trust has assumed the obligation to make payments, where required, to discharge certain litigation and other contingent liabilities of City which existed at September 25, 1985. The Trust may have a contingent liability with respect to certain issues described below:

Rolo and Tenerelli v. City Investing Company Liquidating Trust, et al. Plaintiffs are owners of lots and houses who have instituted this putative class action as members of the North Port Out-Of-State Lot Owners' Association on behalf of all persons who purchased lots or houses from General Development Corporation ('GDC').

The action has been filed in the U.S. District Court for the District of New Jersey. An amended complaint filed in May 1991 names as defendants AmBase Corporation ('AmBase'), the Trust, The Home Insurance Company, Carteret Savings Bank, and certain individual former and current directors and officers of AmBase and City and trustees of the Trust, and certain financial institutions. The amended complaint contains eight counts and pleads RICO and securities law violations, as well as state common law causes of action for breach of contract, fraud, negligence and negligent misrepresentation. Equitable and injunctive relief is sought, as well as damages.

On August 24, 1995, the United States District Court for New Jersey dismissed plaintiffs' Amended Complaint and denied plaintiffs leave to file a further amended complaint. Thereafter, plaintiffs filed a motion for reconsideration of the Court's decision. On October 23, 1995, the Court affirmed its decision and again denied plaintiffs' application to file a further amended complaint. Plaintiffs have appealed this decision to the Court of Appeals for the Third Circuit. The appeal has been briefed, argued and awaits disposition by the Court. Pending resolution of this appeal, the Trust is unable to make any dividend payments or liquidating distributions without further judicial action.

City Investing Company Liquidating Trust v. Continental Casualty Co. On May 26, 1993, the Supreme Court of Delaware affirmed the decision by the Chancery Court of New Castle County, Delaware, holding the Trust liable to Continental Casualty Company ('Continental') by reason of a prior indemnification agreement by City for liabilities incurred by Continental with respect to a judicial bond issued by Continental in 1981 in connection with certain tax litigation between GDC and the Florida Department of Revenue ('DOR'). On November 30, 1993, the Trust, Continental and Bank of Delaware executed an Agreement effectively discharging the Trust's liability to Continental from the proceeds of the cash collateral ($3,105,000) for the supersedeas bond posted by the Trust in connection with its appeal to the Supreme Court of Delaware and transferring the remaining collateral to Bank of Delaware to be held as security for any liability to the DOR arising out of the judicial bond posted for the benefit of GDC, as to which City issued an indemnity. The

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CITY INVESTING COMPANY LIQUIDATING TRUST
Notes to Financial Statements (continued)

Agreement further obligates the Trust to make annual payments to Bank of Delaware equal to the difference between interest earned on the new escrow and the Florida post judgment interest accrual rate of 12% per annum. The Trust settled the underlying liability to the DOR in December 1997 by a payment of $1,150,000 and expects the balance of the escrow ($2,965,000 as of December 31, 1997) to be released to it in the near future.

Marina Pacifica: Environmental Protection Agency Claim. Marina Pacifica, a California limited partnership whose general partner was a former subsidiary of City, was notified on November 4, 1987, by the United States Environmental Protection Agency (the 'EPA'), that it was deemed a potentially responsible party ('PRP') with respect to the Operating Industries, Inc. Superfund Site (the 'Site') in Monterey Park, California. The Site, a landfill for municipal and industrial waste, was included on the National Priorities List in May 1986. Marina Pacifica was in the business of developing and selling condominiums. Development of one construction site required the relocation of six oil wells. Drilling muds generated during the relocation activities allegedly were disposed of at the Site. The EPA has documented the release or threatened release of hazardous substances at the Site and has taken actions to control the release of these substances at the Site. The EPA identified three initial stages of remedial action for the Site, the Records of Decision for which were signed in July 1987, November 1987, September 1988 and amended in September 1990. The EPA has estimated the aggregate cost of these initial stages of remediation at $287 million. In September 1996, the EPA issued a Record of Decision specifying final remedial measures for the Site.

In May 1989, a settlement was reached between the EPA and a group of PRPs to conduct remedial activities for the first two initial stages and to pay state and federal response costs incurred up to June 1, 1988. At that time, the EPA listed Marina Pacifica as 53rd of 181 separate PRPs identified by the EPA in terms of volume of waste disposed of at the Site. The EPA has since entered into a subsequent settlement with additional PRPs for the same matter. Counsel for Marina Pacifica notified the EPA that Marina Pacifica had been dissolved and that it would not participate in the settlements.

In September 1990, the EPA sent a special notice letter to all PRPs, including Marina Pacifica, demanding payment of the total costs incurred by the government since June 1, 1988, which the EPA estimated were at least $15.3 million. The EPA also requested a good faith offer to perform or pay for the remedy selected for the third initial remedial stage. The EPA included an updated list of 269 PRPs, of which Marina Pacifica appeared 57th. Marina Pacifica did not make a counter offer.

On September 30, 1997, the EPA sent a special notice letter to all PRPs, including Marina Pacifica, demanding payment of unreimbursed costs incurred by the government as of June 30, 1997, of at least $28.9 million. The EPA also requested a good-faith offer to perform or pay for the final remedial measures covered by the September 1996 Record of Decision which it estimates will cost $289 million. The EPA included an updated list of 280 PRPs on which Marina Pacifica appeared 84th in volumetric terms. The Trust is considering what response, if any, to make. Counsel has advised that, based on its volumetric share and other material factors, actual payments, if any, required of Marina Pacifica would be a small fraction of the $576 million estimated costs of the remediation effort, comprised of the $287 million cost of initial stages of remediation and the $289 million cost of final remediation measures.

Income Tax Matters. The Trust may have a contingent liability with respect to certain issues raised by the Internal Revenue Service upon audit of income tax returns of City filed with respect to periods on or before September 25, 1985. One of these issues is currently pending before the Tax Court of the United States. These issues, if resolved unfavorably to City, would result in a substantial liability. As other parties are primarily and jointly responsible for this contingent liability, the Trust is unable to estimate the ultimate cost, if any, of its exposure.

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CITY INVESTING COMPANY LIQUIDATING TRUST
Notes to Financial Statements (continued)
Note 8 - Dividend Restrictions

The existence of the contingent liabilities referred to in Note 7 may affect the timing of future distributions of Trust assets. In connection with the proceeding entitled Rolo and Tenerelli v. City Investing Company Liquidating Trust, et al., the Trust is unable to make any dividend payments or liquidating distributions without further judicial action.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

THE TRUSTEES

The Trustees of the Trust are Geo. T. Scharffenberger, Eben W. Pyne and Lester J. Mantell. Each Trustee will serve for the term of the Trust subject to his earlier resignation or removal. There are no family relationships between the Trustees.

Geo T. Scharffenberger (78) was a director and Chairman of the Board of AmBase Corporation until January 26, 1993. Mr. Scharffenberger was formerly Chairman and a director of City and served as City's Chief Executive Officer from 1966 until May 1985.

Eben W. Pyne (80) was a director of AmBase Corporation until January 26, 1993. Mr. Pyne retired in 1982 as a Senior Vice President of Citibank, N.A. He is also a consulting director of Long Island Lighting Company and was a director of City.

Lester J. Mantell (60) was an Assistant Vice President - Tax of AmBase Corporation from April 1995 to December 1996. He served as the Executive Vice President, Chief Financial Officer and Treasurer of AmBase Corporation from October 1994 to January 1995, and as Senior Vice President - Tax of AmBase Corporation from April 1993 to October 1994. Prior thereto, he served as a consultant to AmBase Corporation from January 1992 to April 1993.

See also 'Certain Relationships and Related Transactions' below.

ITEM 11. EXECUTIVE COMPENSATION

Pursuant to Section 9.1 of the Trust Agreement, the Trustees, in lieu of commissions or other compensation fixed by law for Trustees, receive as compensation for services thereunder the aggregate sum of $36,000 per year to be allocated equally among the Trustees. Each Trustee is also reimbursed from the Trust Estate for all expenses reasonably incurred by him in the performance of his duties pursuant to the Trust Agreement.

There are no plans, pursuant to which cash or non-cash compensation was paid or distributed during the last fiscal year, or is proposed to be paid or distributed in the future, to the Trustees, except for amounts that they may receive as holders of Units of Beneficial Interest.

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ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following are the only persons known to the Trust to own beneficially (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) more than five percent of the Trust's Units of Beneficial Interest. The information provided below was obtained from Amendment No. 5 to Schedule 13D of Goldman, Sachs & Co., as filed with the Securities and Exchange Commission ('SEC') as of September 11, 1992, from Amendment No. 9 to Schedule 13D of Farallon Capital Management, Inc. filed with the SEC as of December 29, 1997, and from an Initial Filing of Schedule 13G as filed with the SEC by Franklin Resources, Inc. (purchased from Heine Securities Corp.) as of February 12, 1997.

Names and Addresses of Beneficial Owners	Units Beneficially Owned	% of Class
*Goldman, Sachs & Co* 85 Broad Street, New York, NY 10004	12,615,564	32.3%
Farallon Capital Management, Inc. One Maritime Plaza, Suite 1250, San Francisco, CA 94111	8,997,348	23.1%
*Franklin Resources, Inc.* 777 Mariners Island Blvd., San Mateo, CA 94403	6,572,091	16.9%

Totals	28,185,003	72.3%
The following table shows the Units of Beneficial Interest of the Trust beneficially owned by each Trustee and the Trustees as a group as of January 13, 1998.
Names of Beneficial Owners	Units Beneficially Owned	% of Class
Eben W. Pyne	1,000	*
Lester J. Mantell	--	--
Geo. T. Scharffenberger	--	--
Trustees as a group (three)	1,000	*
* Represents less than one quarter of 1% of the class.

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PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents Filed as Part of This Report:

Index to Financial Statements:	Page
Independent Auditors' Report	5
Statements of Operations	6
Balance Sheets	6
Statements of Cash Flows	7
Statements of Changes in Trust Equity	7
Notes to Financial Statements	8

Index to Financial Statement Schedules:
Not applicable

Exhibits:

2.	Plan of Complete Liquidation and Dissolution of City Investing Company (incorporated by reference to Exhibit 2A to City Investing Company Form 8-K dated December 12, 1984 and filed on December 21, 1984).
3.	Agreement and Declaration of Trust dated September 25, 1985 by and between City Investing Company and Geo. T. Scharffenberger, Eben W. Pyne and Lester J. Mantell, as Trustees, together with Schedule I thereto (incorporated by reference to Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1985), as amended on September 7, 1988 (incorporated by reference to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q for the quarter ended September 30, 1988), as amended on April 23, 1990 (incorporated by reference to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q for the quarter ended September 30, 1990), as amended on September 2, 1992 (incorporated by reference to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q for the quarter ended September 30, 1992), as amended on June 16, 1994 (incorporated by reference to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q for the quarter ended September 30, 1994), as amended on June 27, 1996 (incorporated by reference to Exhibit 6.1 to City Investing Company Liquidating Trust Form 10-Q for the quarter ended June 30, 1996).
3a.	Specimen certificate representing Units of Beneficial Interest in City Investing Company Liquidating Trust (certificate formerly representing shares of Common Stock of City Investing Company, showing legends to be placed on certificates when issued from time to time upon transfer of Units of Beneficial Interest) (incorporated by reference to Exhibit 3.4 of City Investing Company Liquidating Trust Form 8-B filed with the Commission on September 25, 1985).

Copies of Exhibits will be provided upon written request to the Trust.

(b) Form 8-K

The Trust was not required to file a report on Form 8-K during the quarter ended December 31, 1997.

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SIGNATURES:

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 28th day of January 1998.

CITY INVESTING COMPANY LIQUIDATING TRUST

LESTER J. MANTELL
Trustee

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant on the 28th day of January 1998.

A majority of the Trustees:

GEO. T. SCHARFFENBERGER
Trustee

EBEN W. PYNE
Trustee

LESTER J. MANTELL
Trustee

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