For the Quarterly Period Ended March 31, 2000

Commission File Number 0-13881

CITY INVESTING COMPANY LIQUIDATING TRUST

(Exact name of registrant as specified in its charter)

99 University Place, 7th Floor
New York, New York
(Address of principal executive offices)

10003-4528
(Zip Code)

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 and (2) has been subject to such filing requirements for the past 90 days.

Yes   X       No      
 

At March 31, 2000 there were 38,979,372 Trust Units of Beneficial Interest outstanding.

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

CITY INVESTING COMPANY LIQUIDATING TRUST
Statements of Income
Three Months ended March 31
(Unaudited)

The March 31, 2000 financial statements for the City Investing Company Liquidating Trust (the "Trust") are unaudited. In the opinion of the Trustees, the interim financial statements reflect all adjustments necessary for a fair presentation of the financial position and income and expenses of the Trust as prepared on a Federal income tax basis. Results for interim periods are not necessarily indicative of results for the full year.

Note 2 - Basis of Accounting

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.

Note 3 - Gains (Losses) on Dispositions of Assets

Gains (losses) on dispositions of assets, net, include settlement costs and legal fees attributable to the disposition of assets incurred in connection with the defense of litigation against the Trust.

Note 4 - Trust Agreement

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 Investing Company ("City") which existed on September 25, 1985.

Note 5 - Investment Securities

Investment securities consist of U.S. Treasury Bills with maturities of less than one year and are carried at cost. The fair value of U.S. Treasuries is based on quoted market prices. Investment securities consist of the following:

The gross unrealized gains on investment securities, at March 31, 2000 and December 31, 1999, were $1,762 and $1,574, respectively.

Restricted funds at March 31, 2000 and December 31, 1999 represent a rent deposit of $4.

 
Note 7 - Investments

The Trust held 10,000 shares of Global Bancorporation which were carried at their tax basis. In February 2000, the Trust collected a final liquidating distribution of $20 from Global Bancorporation which resulted in a long-term capital loss of $562. 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 March 31, 2000 and December 31, 1999, the fair market value of the Oklahoma Energy stock, based on quoted market prices, was $1,290 and $124, respectively.

Note 8 - 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. The Trust now holds an undivided interest in the property classified as real estate, which is valued at the January 2, 1990 fair market value. The Trust realized a long term gain of $20 on a sale of approximately one-half of one per cent of the real estate during the third quarter of 1998.

In February 2000, the Trust sold about 39 percent of the real estate acreage for approximately $2.4 million cash allocable to the Trust which resulted in a long-term capital gain of $610. With respect to the remaining acreage, there is a non-refundable escrow of approximately $100 allocable to the Trust. A closing with respect to the remaining acreage is scheduled to occur in May 2000 for approximately $400 cash and a non-recourse promissory note of approximately $3.4 million, allocable to the Trust, payable in five equal annual installments bearing interest at 8 percent.

Note 9 - 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 an issue 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. This issue is currently pending before the Tax Court of the United States. This issue, 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. The Trust also remains subject to possible claims by the United States Environmental Protection Agency and other third parties.

Lease Commitment.   The Trust entered into a one-year lease of office space that expires June 30, 2000 with a monthly rental payment of $2.

Note 10 - Future Distributions of Trust Assets

The existence of the contingent liabilities referred to in Note 9 may affect the timing of future distributions of Trust assets.
 

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.

The Trust recorded net income of $717 ($0.02 per unit) in the quarter ended March 31, 2000, compared to net income of $687 ($0.02 per unit) in the first quarter of 1999. The reported gains (losses) on the dispositions of assets, net, reflect gains of $34 in 2000 as compared to losses of $13 in 1999. In February 2000, the Trust sold about 39 percent of its real estate acreage for approximately $2.4 million cash allocable to the Trust which resulted in a capital gain of $610. The remaining acreage is contracted to be sold in May 2000 for approximately $400 cash and a non-recourse promissory note of approximately $3.4 million, allocable to the Trust, payable in five equal annual installments bearing interest at 8 percent. In February 2000, the Trust also received $20 as the final liquidating distribution from Global Bancorporation which resulted in a long-term capital loss of $562. Other expenses affecting gains (losses) on disposition of assets, net, consist of legal fees incurred in connection with the defense of litigation against the Trust.

Interest, dividend and other income, principally consisting of interest earned on the investment of cash equivalents and investment securities was $759 in the first quarter of 2000, compared with $786 in the first quarter of 1999. The decrease in the 2000 period was due to a reduction in both the yield on investment securities and other income received from real estate compared to the 1999 period. Administrative expenses were $76 and $86 in the first quarters of 2000 and 1999, respectively.

At March 31, 2000, the Trust had cash and cash equivalents and U. S. Treasury Bills of $70,821. The Trustees believe that such cash resources and investment securities are sufficient to meet all anticipated liquidity requirements.

The Year 2000 Issue is the result of computer programs having been written using two digit dates rather than four to define an applicable year, which could result in system failures or miscalculations causing disruptions in the operations of the Trust and the entities with which the Trust does business. An evaluation of the Trust’s computer systems, software, non-information systems and entities with which the Trust does business was performed, revealing that the Trust had no meaningful Year 2000 issues. To date, the Year 2000 Issue has not had a material adverse effect on the Trust and its operations.

ITEM 1.   LEGAL PROCEEDINGS

The information contained under Legal Proceedings in the Trust's Annual Report on Form 10-K for the year ended December 31, 1999 is incorporated by reference herein. There have been no material developments in such legal proceedings subsequent to the date of that information.

ITEM 2.   CHANGES IN SECURITIES

None.

ITEM 5.   OTHER INFORMATION

None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

Pursuant to the requirements 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.

CITY INVESTING COMPANY LIQUIDATING TRUST