<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

(Mark one)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                         Commission File Number: 0-20677

                           FIRSTCITY LIQUIDATING TRUST
             (Exact name of registrant as specified in its charter)

                     Texas                                    06-6414468
        (State or other jurisdiction of                    (I.R.S. Employer
         incorporation or organization)                   Identification No.)

     1001 Fannin, Suite 505, Houston, Texas                      77002
    (Address of principal executive offices)                   (Zip Code)

       Registrant's telephone number, including area code: (713) 651-7841

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

                          Class B Beneficial Interests
                          Class C Beneficial Interests
                              (Title of Each 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]

As of February 28, 2001 there were 2,454,310 units of Class B Beneficial
Interests and 725,729 units of Class C Beneficial Interests outstanding.

Documents incorporated by reference: None


<PAGE>   2


                                     Part I

Item 1.  Business.

         On July 3, 1995 (the "Effective Date"), the FirstCity Liquidating Trust
(the "Trust") and certain other entities were established pursuant to and upon
consummation of the Joint Plan of Reorganization, dated December 23, 1994, by
First City Bancorporation of Texas, Inc., a Delaware corporation (the "Debtor"),
Official Committee of Equity Security Holders (the "Equity Committee"), and
J-Hawk Corporation ("J-Hawk"), with the participation of Cargill Financial
Services Corporation, under Chapter 11 of Title 11 of the U.S. Code (the
"Bankruptcy Code"), Case No. 392-39474-HCA-11 (the "Plan"). The Plan was
confirmed by order of the U.S. Bankruptcy Court for the Northern District of
Texas, Dallas Division (the "Bankruptcy Court") entered on May 31, 1995.

         The Debtor was formed as a multi-bank holding company in 1988 for the
purpose of reorganizing First City Bancorporation of Texas, Inc., a Texas
corporation. Beginning in the summer of 1990, the financial condition of the
Debtor began to deteriorate and worsened progressively throughout 1990 and 1991.
On October 30, 1992, regulatory agencies closed the Debtor's banks. On October
31, 1992, certain of the Debtor's unsecured creditors filed an involuntary
Chapter 11 bankruptcy petition against the Debtor in the Bankruptcy Court. On
November 23, 1992, the Debtor consented to the entry of an order for relief
against it under Chapter 11 of the Bankruptcy Code. Until July 3, 1995, the
Debtor operated its remaining businesses and managed its property as
debtor-in-possession.

         The Plan was confirmed by the Bankruptcy Court by an order entered on
May 31, 1995, and became effective on July 3, 1995. Pursuant to the Plan and an
Agreement and Plan of Merger between the Debtor and J-Hawk, on July 3, 1995,
J-Hawk was merged (the "Merger") with and into the Debtor, with the Debtor as
the surviving entity. Pursuant to the Merger, (i) the former holders of common
stock of J-Hawk received, in the aggregate, approximately 49.9% of the
outstanding common stock of the surviving entity, in exchange for their shares
of J-Hawk common stock, (ii) approximately 50.1% of the outstanding common stock
of the surviving entity was distributed among former security holders of the
Debtor pursuant to the Plan and (iii) the name of the corporation was changed to
FirstCity Financial Corporation ("FirstCity").

         The Trust has not and, pursuant to the Liquidating Trust Agreement
dated as of July 3, 1995, by and between First City Bancorporation of Texas,
Inc. and State Street Bank and Trust Company, successor to Fleet National Bank
and Shawmut Bank Connecticut, National Association, as Trustee (the "Trust
Agreement"), may not engage in the conduct of a trade or business apart from the
liquidation of Trust assets and the winding up of the affairs of the Debtor and
its subsidiaries. Pursuant to Article VIII of the Trust Agreement, the Trust
shall terminate upon the date which is three (3) years and six (6) months after
the Effective Date; provided, however, that at least six (6) months prior to
such termination, the Portfolio Committee (as defined herein) may, with the
approval of the Bankruptcy Court, extend the term of the Trust if necessary to
the liquidating purpose thereof. Multiple extensions, if approved by the
Bankruptcy Court, are permissible, although the aggregate of all such extensions
shall not exceed five (5) years so that, in any event, the Trust


                                       1
<PAGE>   3


shall terminate no later than eight (8) years and six (6) months after the
Effective Date. In June 1998, the Bankruptcy Court extended the life of the
Trust from December 31, 1998 to January 3, 2000. In June 1999, the Bankruptcy
Court extended the life of the Trust to January 3, 2002.

         Pursuant to the Plan, substantially all of the legal and beneficial
interest in the assets of the Debtor, other than $20 million in cash which was
contributed by the Debtor to FirstCity, were transferred to the Trust or to
subsidiaries of the Trust. Such assets have been and will continue to be
liquidated over the life of the Trust pursuant to the terms of the Plan and the
Trust Agreement. The non-cash assets of the Trust consist principally of
performing and non-performing loans, income producing real estate and interests
in real estate, and miscellaneous other assets and receivables transferred to
the Trust upon the consummation of the Plan.

         In connection with the sale of the Debtor's banks by the Federal
Deposit Insurance Corporation (the "FDIC") to certain other banks (the
"Loss-Sharing Banks"), the FDIC entered into certain agreements (the
"Loss-Sharing Agreements") to guarantee certain recoveries on loans acquired by
the Loss-Sharing Banks. On July 12, 1995, in order to reduce the uncertain
effect of the Loss-Sharing Agreements on future distributions to the Trust by
the FDIC, subsidiaries of the Trust purchased assets for approximately $206
million from the Loss-Sharing Banks (the "Loss-Sharing Settlement"). With the
purchase of these assets, the Loss-Sharing Banks released the FDIC from its
future obligations under the Loss-Sharing Agreements. The Loss-Sharing
Settlement was significant to the Trust because it allowed the FDIC to eliminate
the loss-sharing reserve that it had maintained to cover the FDIC's obligations
under the loss-sharing guarantees, thereby eliminating the uncertainty of future
reductions from the reserve and increasing the initial distribution made by the
FDIC to the Trust.

         In 1996, the FDIC closed the Receiverships of the Debtor's banks (the
"Receiverships") and distributed the surplus cash ($17.6 million on December 23,
1996) of the Receiverships to the Trust. In accordance with that certain
Conveyance and Indemnification Agreement (the "Conveyance and Indemnification
Agreement"), dated December 23, 1996 and extended in April 1999, the Trust will
be required, among other things, to provide indemnity to the FDIC against any
known or unknown liabilities, obligations or actual expenses associated with the
Receiverships, in an aggregate amount up to $10 million until the termination of
the Trust.

Item 2.  Properties.

         The Trust does not have any material physical properties, except for
such properties that are held for sale.

Item 3.  Legal Proceedings.

         The December 31, 2000 consolidated statement of net assets in
liquidation reflects a value of $45 million for a 67% interest in a partnership
which owns the First City Tower, a Class A office building located in downtown
Houston. UIDC Management, Inc. owns the remaining 33% of the partnership. The
Trust publicly stated its intent to market its share of the partnership in the
first quarter of 2000.


                                       2
<PAGE>   4


         The Trust received a letter dated February 18, 2000 from UIDC
Management in which UIDC alleged that in 1997 it "exercised" its contractual
right of first refusal to purchase the 67% partnership interest. This alleged
exercise of the right of first refusal arose in connection with an unconsummated
prior transaction which was itself the subject of previously settled litigation.
The letter further states that UIDC "demands that the Trust tender its
partnership interest". Adjusted for refinancing costs, the alleged right of
first refusal would have been on a value of approximately $25 million for the
partnership interest.

         In response to this letter and because management of the Trust believed
that UIDC's claim had no merit, the Trust filed a lawsuit on March 9, 2000
seeking a declaratory judgment that "Defendants UIDC Management, Inc. and UIDC
of Texas Co. (collectively referred to as "UIDC" or the "UIDC Defendants")
failed in May 1997 to properly exercise their right of first refusal under the
Limited Partnership Agreement of FC Tower Property Partners, L.P. or, in the
alternative, that UIDC Defendants have waived and/or are estopped from asserting
such right." Additionally, the Trust filed a motion for summary judgment.

         On February 27, 2001, a federal district judge ruled that the Trust's
motion for summary judgment be denied and that UIDC entities' motion for summary
judgment be granted in part and denied in part. Specifically, the judge ruled
that, as a matter of law, UIDC had properly exercised its right of first refusal
to purchase the 67% interest in May of 1997. The judge further ruled that UIDC's
summary judgment motion be denied as it pertains to questions of whether UIDC is
prevented from enforcing that right because of alleged breaches of the resulting
option agreement, or because UIDC is estopped from specific performance based
upon their refusal to buy the interest when given the chance in October of 1997.
These latter questions will be subject to further discovery and potentially to a
trial by jury.

         Management of FirstCity Liquidating Trust strongly disagrees with this
ruling. Issues remain to be tried concerning whether the UIDC entities are
nevertheless barred from enforcing their option to acquire the 67% partnership
interest (a) because of alleged breaches of that agreement, and (b) because UIDC
declined to purchase the partnership interest when subsequently offered in
October of 1997 at a price even more favorable than that offered in May of 1997.
Finally, even if the Trust was not successful on either of these trial points,
there will remain equitable questions pertaining to the precise terms upon which
UIDC's acquisition of the partnership interest may be ordered by the court,
given all the pertinent circumstances. No adjustment has been made to the value
of the partnership interest because, in the opinion of Trust management, it is
not probable that the resolution of the dispute with UIDC will have a material
adverse impact on the consolidated financial position, results of operations or
liquidity of the Trust.

         FirstCity Liquidating Trust cannot predict the outcome of any such
legal matters; however, the current litigation makes it unlikely that any
near-term deal to sell the interest can be accomplished.


                                       3
<PAGE>   5


         The Trust is involved in various other legal proceedings in the
ordinary course of business. In the opinion of management of the Trust, the
resolution of such matters will not have a material adverse impact on the
consolidated financial position, results of operations or liquidity of the
Trust.

Item 4.  Submission of Matters to a Vote of Security Holders.

         As the Trust has no outstanding voting securities, no matters were
submitted to a vote of security holders during the fourth quarter ended December
31, 2000.

                                     Part II

Item 5.  Market For Registrant's Common Equity and Related Stockholder Matters.

         The Class A Certificate was held by FirstCity. Through December 31,
1997, the Trust had distributed $188 million to FirstCity as the sole Class A
Certificate holder, retiring the Class A Certificate in full.

         The Class B Beneficial Interests (traded under the symbol "FCFCL") and
Class C Beneficial Interests (traded under the symbol "FCFCZ") have been traded
over the counter since July 3, 1995. The number of Class B Certificate holders
and Class C Certificate holders of record as of December 31, 2000, was 58 and
852, respectively. High and low bid prices (trade prices for FCFCZ), as compiled
by Bloomberg Financial Markets Services, an online service, are displayed in the
following tables:


<TABLE>
<CAPTION>

                                                                      Class B Beneficial Interests
                                  ----------------------------------------------------------------------------------------------
                                                              2000                                           1999
                                  ---------------------------------------------------  -----------------------------------------
                                        Market Price               Cash Distributions      Market Price       Cash Distributions
                                        ------------                                       ------------
Quarter Ended                      High              Low                  Paid          High           Low          Paid
-------------                      ----              ---                  ----          ----           ---          ----
<S>                               <C>              <C>                   <C>           <C>           <C>           <C>
March 31 ................         $20.50           $18.94                $ 1.00        $26.25        $24.00        $ 3.50
June 30 .................          15.00            13.81                  1.00         26.50         21.75          4.00
September 30 ............          14.88            12.50                  1.00         23.00         21.50          2.00
December 31 .............          14.00            13.13                  1.00         21.75         21.75            --
</TABLE>


<TABLE>
<CAPTION>

                                                            Class C Beneficial Interests
                                            -------------------------------------------------------------
                                                     2000                                    1999
                                            ------------------------             ------------------------
                                                 Market Price                            Market Price
                                            ------------------------             ------------------------
Quarter Ended                                  High             Low                 High             Low
-------------                               ---------         ------             ---------          -----
<S>                                         <C>               <C>                <C>                <C>
March 31 ................                     $ .08           $ .01                   --              --
June 30 .................                       .15             .15                   --              --
September 30 ............                      1.50             .15                   --              --
December 31 .............                      1.50             .33               $  .09            $.09

</TABLE>


                                        4
<PAGE>   6


         No distributions were made to Class B or Class C Certificate holders
through December 31, 1997. In 1998, $67.5 million, or $27.50 per Class B
Certificate, was distributed to Class B Certificate holders. In 1999, $23.3
million, or $9.50 per Class B Certificate, was distributed to Class B
Certificate holders. In 2000, $9.8 million, or $4.00 per Class B Certificate,
was distributed to Class B Certificate holders. In March 2001, $2.5 million, or
$1.00 per Class B Certificate, will be distributed.

         The Trust is required to apply all proceeds from liquidation and
disposition of its assets first to the payment of normal operating expenses.
Second, Trust proceeds totaling $188 million were distributed to FirstCity to
retire the Class A Certificate in December 1997. The third order of distribution
of Trust proceeds is payments pursuant to employment and bonus agreements with
certain former employees of the Debtor. The bonus pool and executive long-term
incentive plan provides for the payment of bonuses equal to 4.76% of additional
distributions to Class B Certificate holders and (if any) Class C Certificate
holders.

         Fourth, Class B Certificate holders are entitled to distributions up to
the Pour-Over Level. The Pour-Over Level (approximately $51 million at December
31, 2000) is the liquidation preference on July 3, 1995 of the Debtor's Series B
and Series E preferred stock, less the nominal stated value of FirstCity special
preferred stock and the book value of FirstCity common stock issued to the
Series B and Series E holders, plus interest at an annual rate of 6.5% from July
3, 1995. The Pour-Over Level is reduced for distributions to Class B Certificate
holders.

         Lastly, Class C Certificate holders receive distributions (if any)
after any remaining payments to Class B Certificate holders up to the Pour-Over
Level (approximately $20.77 per unit as of December 31, 2000).

Item 6.  Selected Financial Data.

<TABLE>
<CAPTION>


                                                                               Year Ended December 31,
                                                     ------------------------------------------------------------------------
(Dollars in thousands)                                 2000            1999            1998            1997            1996
                                                     --------        --------        --------        --------        --------
<S>                                                  <C>             <C>             <C>             <C>             <C>
Income ......................................        $  5,952        $ 24,323        $ 38,534        $ 45,079        $ 53,014
Expenses ....................................           2,679           3,844           6,859          12,427          13,249
Net income ..................................           3,273          20,479          31,675          32,652          39,765
Distributions on Class "A" Certificate ......              --              --              --          62,669         120,229
Distributions on Class "B" Certificate ......           9,817          23,316          67,494              --              --

At year end:
         Total assets .......................          48,028          54,421          57,489          93,963         125,229
         Class "A" Certificate ..............              --              --              --              --          53,617
         Class "B" Certificate ..............          46,100          52,400          55,300          91,300          67,700
</TABLE>


                                       5
<PAGE>   7


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

                The operations of the Trust are summarized below:

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                            ------------------------------------------
(Dollars in thousands)                                        2000             1999             1998
                                                            --------         --------         --------
<S>                                                         <C>              <C>              <C>
Changes in fair value of trust assets ..............        $  5,719         $ 24,036         $ 37,883
Interest income on short-term investments ..........             233              287              651
Administrative expense .............................          (2,679)          (3,844)          (6,859)
                                                            --------         --------         --------
         Net income ................................        $  3,273         $ 20,479         $ 31,675
                                                            ========         ========         ========

</TABLE>

                              2000 COMPARED TO 1999

         The estimated fair value of the Trust's assets increased $5.7 million
in 2000 as compared to $24.0 million in 1999. Factors which contributed to the
enhancement of the net asset value of the Trust's assets in 2000 include (i) the
appreciation in value of certain assets attributable to a favorable interest
rate environment and the effect of such favorable interest rates on the
marketability of real estate and (ii) the increase in the estimated market value
of the Trust's assets that naturally occurs as the remaining life of the Trust
(and concomitantly the discount factor applied in calculating net asset value)
decreases.

         Interest income on short-term investments decreased in 2000 as compared
to 1999 because less excess funds were available.

         Administrative expense totaled $2.7 million in 2000 as compared to $3.8
million in 1999. A $.4 million bonus, based on distributions to Class B
Certificate holders, was paid to certain former employees of the Debtor in 2000
as compared to a $1.1 million bonus paid to such employees in 1999. Professional
fees were flat year to year.

         In 2000, the Trust distributed $9.8 million, or $4.00 per Certificate,
to Class B Certificate holders. This distribution was made possible principally
by $10.4 million in net collections on Trust assets in 2000 and cash held at
December 31, 2000. The Class B Beneficial Interests were valued at $46.1 million
at December 31, 2000. In March 2001, $2.5 million, or $1.00 per Class B
Certificate, will be distributed.


                                       6
<PAGE>   8


         Non-cash trust assets at December 31, 2000 and 1999 were comprised of
the following (dollars in thousands):

<TABLE>
<CAPTION>

                                                                     December 31,
                                                               -------------------------
Estimated Gross Cash Flow by Type of Asset                       2000             1999
------------------------------------------                     --------         -------
<S>                                                            <C>              <C>
Borrowers' obligation on outstanding balance of:
   Performing loans ...................................        $  2,718         $  5,327
   Nonperforming loans ................................              81              209
Real estate and other assets ..........................          47,142           49,557
                                                               --------         --------
   Total ..............................................          49,941           55,093
                                                               --------         --------
   Discount required to reflect trust assets at
        estimated fair value ..........................          (5,469)          (5,943)
                                                               --------         --------
Trust assets, net .....................................        $ 44,472         $ 49,150
                                                               ========         ========
</TABLE>

         For each asset, estimates of income, expense and net cash flow on a
monthly basis through the expected final disposition date are prepared by
management of the Trust. The individual asset budget is developed based upon
factors which include physical inspection of the asset or the collateral
underlying the related loan, local market conditions, contractual payments or
rents, and discussions with the relevant borrower. The Trust's management and
the Portfolio Committee periodically reevaluate and revise projected monthly
cash flows on an asset by asset basis. At December 31, 2000 and 1999, the
projected monthly cash flows were discounted at 11% to reflect the Trust assets
at estimated fair value. The Trust assets are highly concentrated in Texas.

         The December 31, 2000 consolidated statement of net assets in
liquidation reflects a value of $45 million for a 67% interest in a partnership
which owns the First City Tower, a Class A office building located in downtown
Houston. UIDC Management, Inc. owns the remaining 33% of the partnership. The
Trust publicly stated its intent to market its share of the partnership in the
first quarter of 2000.

         The Trust received a letter dated February 18, 2000 from UIDC
Management in which UIDC alleged that in 1997 it "exercised" its contractual
right of first refusal to purchase the 67% partnership interest. This alleged
exercise of the right of first refusal arose in connection with an unconsummated
prior transaction which was itself the subject of previously settled litigation.
The letter further states that UIDC "demands that the Trust tender its
partnership interest". Adjusted for refinancing costs, the alleged right of
first refusal would have been on a value of approximately $25 million for the
partnership interest.

         In response to this letter and because management of the Trust believed
that UIDC's claim had no merit, the Trust filed a lawsuit on March 9, 2000
seeking a declaratory judgment that "Defendants UIDC Management, Inc. and UIDC
of Texas Co. (collectively referred to as "UIDC" or the "UIDC Defendants")
failed in May 1997 to properly exercise their right of first refusal under the
Limited Partnership Agreement of FC Tower Property Partners, L.P. or, in the
alternative, that UIDC Defendants have waived and/or are estopped from asserting
such right." Additionally, the Trust filed a motion for summary judgment.


                                       7
<PAGE>   9



         On February 27, 2001, a federal district judge ruled that the Trust's
motion for summary judgment be denied and that UIDC entities' motion for summary
judgment be granted in part and denied in part. Specifically, the judge ruled
that, as a matter of law, UIDC had properly exercised its right of first refusal
to purchase the 67% interest in May of 1997. The judge further ruled that UIDC's
summary judgment motion be denied as it pertains to questions of whether UIDC is
prevented from enforcing that right because of alleged breaches of the resulting
option agreement, or because UIDC is estopped from specific performance based
upon their refusal to buy the interest when given the chance in October of 1997.
These latter questions will be subject to further discovery and potentially to a
trial by jury.

         Management of FirstCity Liquidating Trust strongly disagrees with this
ruling. Issues remain to be tried concerning whether the UIDC entities are
nevertheless barred from enforcing their option to acquire the 67% partnership
interest (a) because of alleged breaches of that agreement, and (b) because UIDC
declined to purchase the partnership interest when subsequently offered in
October of 1997 at a price even more favorable than that offered in May of 1997.
Finally, even if the Trust was not successful on either of these trial points,
there will remain equitable questions pertaining to the precise terms upon which
UIDC's acquisition of the partnership interest may be ordered by the court,
given all the pertinent circumstances. No adjustment has been made to the value
of the partnership interest because, in the opinion of Trust management, it is
not probable that the resolution of the dispute with UIDC will have a material
adverse impact on the consolidated financial position, results of operations or
liquidity of the Trust.

         FirstCity Liquidating Trust cannot predict the outcome of any such
legal matters; however, the current litigation makes it unlikely that any
near-term deal to sell the interest can be accomplished.

                              1999 COMPARED TO 1998

         The estimated fair value of the Trust's assets increased $24.0 million
in 1999 as compared to $37.9 million in 1998. The 1999 increase was attributable
to several factors, including $18 million related to a 67% interest in a
partnership which owns the First City Tower. Other factors which contributed to
the enhancement of the net asset value of the Trust's assets in 1999 include (i)
the appreciation in value of certain assets attributable to a favorable interest
rate environment and the effect of such favorable interest rates on the
marketability of real estate and (ii) the increase in the estimated market value
of the Trust's assets that naturally occurs as the remaining life of the Trust
(and concomitantly the discount factor applied in calculating net asset value)
decreases.

         Interest income on short-term investments decreased in 1999 as compared
to 1998 because less excess funds were available.

         Administrative expense totaled $3.8 million in 1999 as compared to $6.9
million in 1998. A $1.1 million bonus, based on distributions to Class B
Certificate holders, was paid to certain former employees of the Debtor in 1999
as compared to a $2.6 million bonus paid to such employees in 1998. Professional
fees totaled $.7 million in 1999 as compared to $1.1 million in 1998.


                                       8
<PAGE>   10


         In 1999, the Trust distributed $23.3 million, or $9.50 per Certificate,
to Class B Certificate holders. This distribution was made possible principally
by $18.8 million in net collections on Trust assets in 1999 and cash held at
December 31, 1998.

         In June 1999, the Bankruptcy Court extended the life of the Trust from
January 3, 2000 to January 3, 2002. The extension allows the Trust more time to
settle ongoing litigation and indemnity issues as well as to bring additional
value to certain assets as a result of holding such assets for a longer period
of time.

         In the first quarter of 1998, the Trust negotiated and received a
settlement of approximately $22 million from its fidelity bond carriers. As a
result of this settlement, there are no remaining claims of this nature.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

         The Trust does not engage in trading market risk sensitive instruments
and does not purchase as investments, as hedges, or for purposes "other than
trading" instruments that are likely to expose the Trust to market risk, whether
it be from interest rate, foreign currency exchange, commodity price or equity
price risk. The Trust has issued no debt instruments, entered into no forward or
futures contracts, purchased no options and entered into no swaps.


                                       9
<PAGE>   11

Item 8.  Financial Statements and Supplementary Data.

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                              DECEMBER 31,
                                                                         ----------------------
                                                                          2000           1999
                                                                         -------        -------
<S>                                                                      <C>            <C>
               Assets, at estimated fair value
Cash and cash equivalents .......................................        $ 3,556        $ 5,271
Trust assets, net ...............................................         44,472         49,150
                                                                         -------        -------
       Total assets .............................................         48,028         54,421
                                                                         -------        -------

               Less liabilities at face or estimated amount
Payables and accrued liabilities ................................          1,928          2,021
                                                                         -------        -------
       Total liabilities ........................................          1,928          2,021
                                                                         -------        -------
Commitments and contingencies ...................................             --             --

               Trust net asset value attributable to:
Class "B" Certificate, 2,454,310 units outstanding ..............         46,100         52,400
Class "C" Certificate, 725,729 units outstanding ................             --             --
                                                                         -------        -------
       Total net asset value ....................................        $46,100        $52,400
                                                                         =======        =======
</TABLE>


                      CONSOLIDATED STATEMENTS OF INCOME AND
                    CHANGES IN NET ASSET VALUE IN LIQUIDATION
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                        YEAR ENDED DECEMBER  31,
                                                             ------------------------------------------
                                                               2000             1999             1998
                                                             --------         --------         --------
<S>                                                          <C>              <C>              <C>
Changes in fair value of trust assets ...............        $  5,719         $ 24,036         $ 37,883
Interest income on short-term investments ...........             233              287              651
Administrative expense ..............................          (2,679)          (3,844)          (6,859)
                                                             --------         --------         --------
       Net income ...................................           3,273           20,479           31,675
                                                             --------         --------         --------
Net asset value, beginning of period ................          52,400           55,300           91,300
Distributions on Class "B" Certificate ..............          (9,830)         (23,379)         (67,675)
Eliminate liability for distributions on
   unsurrendered Class "B" Certificates .............             257               --               --
                                                             --------         --------         --------
Net asset value, end of period ......................        $ 46,100         $ 52,400         $ 55,300
                                                             ========         ========         ========
</TABLE>


See accompanying notes to consolidated financial statements.



                                       10
<PAGE>   12

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                   YEAR ENDED DECEMBER 31,
                                                                         ------------------------------------------
                                                                           2000             1999             1998
                                                                         --------         --------         --------
<S>                                                                      <C>              <C>              <C>
Cash flows from operating activities:
    Net income ..................................................        $  3,273         $ 20,479         $ 31,675
    Adjustments to reconcile net income to net cash
    provided by operating activities:
       Changes in fair value of trust assets ....................          (5,719)         (24,036)         (37,883)
       Collections on trust assets, net of advances .............          10,382           18,787           79,820
       Increase (decrease) in payables and accrued liabilities ..             166             (117)            (592)
                                                                         --------         --------         --------
          Net cash provided by operating activities .............           8,102           15,113           73,020
                                                                         --------         --------         --------

Cash flows from financing activities:
    Distributions on Class "B" Certificate ......................          (9,817)         (23,316)         (67,494)
                                                                         --------         --------         --------

          Net cash used in financing activities .................          (9,817)         (23,316)         (67,494)
                                                                         --------         --------         --------

    Net increase (decrease) in cash and cash equivalents ........        $ (1,715)        $ (8,203)        $  5,526
    Cash and cash equivalents, beginning of period ..............           5,271           13,474            7,948
                                                                         --------         --------         --------
    Cash and cash equivalents, end of period ....................        $  3,556         $  5,271         $ 13,474
                                                                         ========         ========         ========
</TABLE>

See accompanying notes to consolidated financial statements.



                                       11
<PAGE>   13


                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                        December 31, 2000, 1999 and 1998

(A)      Summary of Significant Accounting Policies

         (1)      Description of Business

         The Joint Plan of Reorganization by First City Bancorporation of Texas,
         Inc. (the "Debtor"), Official Committee of Equity Security Holders, and
         J-Hawk Corporation ("J-Hawk"), with the participation of Cargill
         Financial Services Corporation, under Chapter 11 of the United States
         Bankruptcy Code, Case No. 392-39474-HCA-11 (the "Plan of
         Reorganization"), was confirmed by the Bankruptcy Court for the
         Northern District of Texas, Dallas Division, by an order entered on May
         31, 1995, and became effective on July 3, 1995. Pursuant to the Plan of
         Reorganization, and an Agreement and Plan of Merger between the Debtor
         and J-Hawk, on July 3, 1995, J-Hawk was merged (the "Merger") with and
         into First City Bancorporation of Texas, Inc., and the name of the
         corporation was changed to FirstCity Financial Corporation
         ("FirstCity").

         Pursuant to the Plan, substantially all of the legal and beneficial
         interests in the assets of the Debtor, other than $20 million in cash
         contributed to FirstCity, were transferred to FirstCity Liquidating
         Trust (the "Trust"), or to subsidiaries of the Trust. Such assets will
         be liquidated over the life of the Trust pursuant to the terms thereof.
         In June 1999, the bankruptcy court extended the life of the Trust to
         January 3, 2002. FirstCity, as the sole holder of the Class A
         Certificate under the Trust, received from the Trust amounts sufficient
         to retire the Class A Certificate in December 1997. Additional
         distributions shall be paid to certain of the former security holders
         of the Debtor pursuant to the terms of the Class B and the Class C
         certificates of beneficial interests in the Trust. The Trust is
         administered by a four-person portfolio committee (the "Portfolio
         Committee"). The net assets of the Debtor transferred to the Trust on
         July 3, 1995, consisted of the following (dollars in thousands):

<TABLE>
<CAPTION>

<S>                                                                   <C>
            Cash and cash equivalents ........................        $ 135,360
            Trust assets .....................................           61,514
            Estimated claims and accrued liabilities .........          (14,002)
                                                                      ---------
                                                                      $ 182,872
                                                                      =========
</TABLE>

         In connection with the sale of the Debtor's banks by the FDIC to
         third-party acquirers (the "Loss-Sharing Banks"), the FDIC guaranteed
         certain recoveries on loans acquired by the Loss-Sharing Banks. (These
         agreements are referred to as "Loss-Sharing Agreements".) On July 12,
         1995, in order to reduce the uncertain effect of the Loss-Sharing
         Agreements on future distributions to the Trust by the FDIC,
         subsidiaries of the Trust purchased assets (the "Loss-Sharing
         Settlement") for approximately $206 million from the Loss-Sharing
         Banks. With the purchase of these assets, the Loss-Sharing Banks
         released the FDIC from its future obligations under the Loss-Sharing
         Agreements.

                                       12
<PAGE>   14

                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (continued)


         By order of the U.S. Bankruptcy Court for the Northern District of
         Texas, Dallas Division, unsurrendered securities of the Debtor were
         required to be submitted for exchange into Class B or Class C
         Certificates by May 31, 2000. As of that date, securities representing
         2,454,310 Class B Certificates and 725,729 Class C Certificates had
         been exchanged. Prior to May 31, 2000, Certificates outstanding were
         assumed equal to an exchange of all Debtor securities. Accordingly, in
         the second quarter of 2000, a liability for distributions on the
         unsurrendered Class B Certificates was reversed. Holders of the
         remaining unsurrendered securities of the Debtor will have no rights to
         receive any distributions on Trust securities.

         (2)      Principles of Consolidation

         The accompanying consolidated financial statements include the accounts
         of FirstCity Liquidating Trust and its subsidiaries (collectively
         referred to as the "Trust"). All significant intercompany transactions
         and balances have been eliminated in consolidation. Certain amounts in
         the financial statements for prior periods have been reclassified to
         conform with current financial statement presentation.

         (3)      Cash Equivalents

         For purposes of the consolidated statements of cash flows, the Trust
         considers all highly liquid debt instruments with original maturities
         of three months or less to be cash equivalents. At December 31, 2000
         and 1999, substantially all cash balances were in excess of federally
         insured limits. In accordance with the Liquidating Trust Agreement, all
         cash balances are maintained at institutions with at least $100 million
         of capital stock and surplus and whose short-term debt obligations are
         rated by at least two nationally recognized rating agencies in one of
         the two highest categories.

         (4)      Trust Assets

         The net assets of the Trust are carried at estimated fair values which
         are the results of discounting, at appropriate discount rates, the
         currently estimated cash flows projected to be realized from the
         collection, liquidation and disposition of the non-cash assets held by
         the Trust. Such assets consist principally of performing and
         non-performing loans, income producing real estate and interests in
         real estate, and miscellaneous other assets and receivables transferred
         to the Trust upon the consummation of the Plan of Reorganization. The
         estimates of the future cash flows from which the net asset values of
         the Trust were derived are made under the direction of the management
         of the Trust and the Portfolio Committee based upon information
         available and are believed to be reliable. There can be no assurance,
         however, that the estimates resulting from such reviews or the net
         asset values



                                       13
<PAGE>   15


                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (continued)

         derived from such estimates will ultimately be realized due to the
         highly judgmental assumptions which were made in developing estimates
         of the amount and timing of future cash flows to be realized upon the
         liquidation of the types of assets such as those held by the Trust.

         Trust assets are revalued at least quarterly and adjustments to
         estimated fair values are included in operating results in the period
         in which they become known. Loans are considered performing if debt
         service payments are made in accordance with the original or
         restructured terms of the notes. Interest on loans is recognized as
         part of the proceeds from disposition of trust assets. Impairment of
         loans is measured based on the present value of the expected future
         cash flows discounted at the loan's effective interest rate, or the
         fair value of the collateral, less estimated selling costs, if the loan
         is collateral dependent and foreclosure is probable.

         Foreclosed assets acquired in settlement of notes are recorded at
         estimated fair value. Costs relating to the development and improvement
         of property and holding costs are considered in the development of
         estimated fair values.

         (5)      Income Taxes

         Under current federal and state laws, the Trust shall be treated as a
         grantor trust owned by the beneficiaries holding beneficial interest
         therein. For tax purposes, any item of income or loss is allocated
         among the certificate holders. Therefore, no provision has been made
         for income taxes in the accompanying consolidated financial statements.

         (6)      Use of Estimates

         Management of the Trust has made certain estimates and assumptions
         relating to the reporting of assets and liabilities and the disclosure
         of contingent assets and liabilities to prepare these consolidated
         financial statements in conformity with accounting principles generally
         accepted in the United States of America. Actual results could differ
         from those estimates.


                                       14
<PAGE>   16


                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (continued)


(B)      Trust Assets

         Trust assets are comprised of the following:

<TABLE>
<CAPTION>


         (Dollars in thousands)
                                                                        December 31,
                                                                 -------------------------
         Estimated Gross Cash Flow by Type of Asset                2000             1999
         ------------------------------------------              --------         --------
<S>                                                              <C>              <C>
         Borrowers' obligation on outstanding balance of:
             Performing loans ...........................        $  2,718         $  5,327
             Nonperforming loans ........................              81              209
         Real estate and other assets ...................          47,142           49,557
                                                                 --------         --------
             Total ......................................          49,941           55,093
                                                                 --------         --------

             Discount required to reflect trust assets at
                  estimated fair value ..................          (5,469)          (5,943)
                                                                 --------         --------

         Trust assets, net ..............................        $ 44,472         $ 49,150
                                                                 ========         ========
</TABLE>

         For each asset, estimates of income, expense and net cash flow on a
         monthly basis through the expected final disposition date are prepared
         by management of the Trust. The individual asset budget is developed
         based upon factors which include physical inspection of the asset or
         the collateral underlying the related loan, local market conditions,
         contractual payments or rents, and discussions with the relevant
         borrower. The Trust's management and the Portfolio Committee
         periodically reevaluate and revise projected monthly cash flows on an
         asset by asset basis. At December 31, 2000 and 1999, the projected
         monthly cash flows were discounted at 11% to reflect the Trust assets
         at estimated fair value. The Trust assets are highly concentrated in
         Texas.

         The December 31, 2000 consolidated statement of net assets in
         liquidation reflects a value of $45 million for a 67% interest in a
         partnership which owns the First City Tower, a Class A office building
         located in downtown Houston. UIDC Management, Inc. owns the remaining
         33% of the partnership. The Trust publicly stated its intent to market
         its share of the partnership in the first quarter of 2000.

         The Trust received a letter dated February 18, 2000 from UIDC
         Management in which UIDC alleged that in 1997 it "exercised" its
         contractual right of first refusal to purchase the 67% partnership
         interest. This alleged exercise of the right of first refusal arose in
         connection with an unconsummated prior transaction which was itself the
         subject of previously settled litigation. The letter further states
         that UIDC "demands that the Trust tender its partnership interest".
         Adjusted for refinancing costs, the alleged right of first refusal
         would have been on a value of approximately $25 million for the
         partnership interest.


                                       15
<PAGE>   17


                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (continued)


         In response to this letter and because management of the Trust believed
         that UIDC's claim had no merit, the Trust filed a lawsuit on March 9,
         2000 seeking a declaratory judgment that "Defendants UIDC Management,
         Inc. and UIDC of Texas Co. (collectively referred to as "UIDC" or the
         "UIDC Defendants") failed in May 1997 to properly exercise their right
         of first refusal under the Limited Partnership Agreement of FC Tower
         Property Partners, L.P. or, in the alternative, that UIDC Defendants
         have waived and/or are estopped from asserting such right."
         Additionally, the Trust filed a motion for summary judgment.

         On February 27, 2001, a federal district judge ruled that the Trust's
         motion for summary judgment be denied and that UIDC entities' motion
         for summary judgment be granted in part and denied in part.
         Specifically, the judge ruled that, as a matter of law, UIDC had
         properly exercised its right of first refusal to purchase the 67%
         interest in May of 1997. The judge further ruled that UIDC's summary
         judgment motion be denied as it pertains to questions of whether UIDC
         is prevented from enforcing that right because of alleged breaches of
         the resulting option agreement, or because UIDC is estopped from
         specific performance based upon their refusal to buy the interest when
         given the chance in October of 1997. These latter questions will be
         subject to further discovery and potentially to a trial by jury.

         Management of FirstCity Liquidating Trust strongly disagrees with this
         ruling. Issues remain to be tried concerning whether the UIDC entities
         are nevertheless barred from enforcing their option to acquire the 67%
         partnership interest (a) because of alleged breaches of that agreement,
         and (b) because UIDC declined to purchase the partnership interest when
         subsequently offered in October of 1997 at a price even more favorable
         than that offered in May of 1997. Finally, even if the Trust was not
         successful on either of these trial points, there will remain equitable
         questions pertaining to the precise terms upon which UIDC's acquisition
         of the partnership interest may be ordered by the court, given all the
         pertinent circumstances. No adjustment has been made to the value of
         the partnership interest because, in the opinion of Trust management,
         it is not probable that the resolution of the dispute with UIDC will
         have a material adverse impact on the consolidated financial position,
         results of operations or liquidity of the Trust.

         FirstCity Liquidating Trust cannot predict the outcome of any such
         legal matters; however, the current litigation makes it unlikely that
         any near-term deal to sell the interest can be accomplished.

         In the first quarter of 1998, the Trust negotiated and received a
         settlement of approximately $22 million from its fidelity bond
         carriers. As a result of this settlement, there are no remaining claims
         of this nature.



                                       16
<PAGE>   18


                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (continued)


(C)      Distribution Priorities

         The Trust is required to apply all proceeds from liquidation and
         disposition of its assets first to payment of normal operating
         expenses. Second, Trust proceeds totaling $188 million were distributed
         to FirstCity to retire the Class A Certificate in December 1997. The
         third order of distribution of Trust proceeds is payments pursuant to
         employment and bonus agreements with certain former employees of the
         Debtor. The bonus pool and executive long-term incentive plan provides
         for the payment of bonuses equal to 4.76% of additional distributions
         to Class B Certificate holders and (if any) Class C Certificate
         holders.

         Fourth, Class B Certificate holders are entitled to distributions up to
         the Pour-Over Level. The Pour-Over Level (approximately $51 million at
         December 31, 2000) is the liquidation preference on July 3, 1995 of the
         Debtor's Series B and Series E preferred stock, less the nominal stated
         value of FirstCity special preferred stock and the book value of
         FirstCity common stock issued to the Series B and Series E holders,
         plus interest at an annual rate of 6.5% from July 3, 1995. The
         Pour-Over Level is reduced for distributions to Class B Certificate
         holders. In 2000, $9.8 million, or $4.00 per Certificate, was
         distributed to Class B Certificate holders and a $.4 million bonus was
         paid to certain former employees of the Debtor. In 1999, $23.3 million,
         or $9.50 per Certificate, was distributed to Class B Certificate
         holders and a $1.1 million bonus was paid to certain former employees
         of the Debtor. In 1998, $67.5 million, or $27.50 per Certificate, was
         distributed to Class B Certificate holders and a $2.6 million bonus was
         paid to certain former employees of the Debtor.

         Lastly, Class C Certificate holders receive distributions (if any)
         after any remaining payments to Class B Certificate holders up to the
         Pour-Over Level (approximately $20.77 per unit as of December 31,
         2000).

         The ultimate amounts to be distributed to the holders of the B and C
         Certificates will result from the cash flow actually realized from the
         liquidation of the non-cash Trust assets (principally the partnership
         interest discussed in Note B). The determination of the net asset value
         of the Trust in the accompanying consolidated statements of net assets
         in liquidation is based upon estimates of future cash flows. The actual
         cash flows and the timing of such cash flows may vary significantly
         from those estimates, thus affecting the final distributions to the
         Certificate holders.


                                       17
<PAGE>   19


                  FIRSTCITY LIQUIDATING TRUST AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (continued)


(D)      Commitments and Contingencies

         The Trust is involved in various other legal proceedings in the
         ordinary course of business. In the opinion of management of the Trust,
         the resolution of such matters will not have a material adverse impact
         on the consolidated financial position, results of operations or
         liquidity of the Trust.

         In 1996, the FDIC closed the receiverships of the Debtor's banks and
         distributed the remaining surplus of those receiverships to the Trust.
         In accordance with a conveyance and indemnification agreement, the
         Trust will be required, among other things, to provide indemnity to the
         FDIC against any known or unknown liabilities, obligations or actual
         expenses associated with the receiverships, in an aggregate amount up
         to $10 million until the termination of the Trust. Management of the
         Trust does not believe that, to the extent the Trust is obligated to
         pay certain claims or expenses associated with the past obligations of
         the Debtor's banks, such payments will have a material adverse impact
         on the consolidated financial position, results of operations, or
         liquidity of the Trust.


                                       18
<PAGE>   20


                          INDEPENDENT AUDITORS' REPORT




The Portfolio Committee and Certificate Holders
FirstCity Liquidating Trust:

         We have audited the accompanying consolidated statements of net assets
in liquidation of FirstCity Liquidating Trust and subsidiaries (the "Trust") as
of December 31, 2000 and 1999, and the related consolidated statements of income
and changes in net asset value in liquidation, and cash flows for each of the
years in the three-year period ended December 31, 2000. These consolidated
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of FirstCity
Liquidating Trust and subsidiaries as of December 31, 2000 and 1999, and the
results of their operations and changes in net asset value in liquidation and
cash flows for each of the years in the three-year period ended December 31,
2000, in conformity with accounting principles generally accepted in the United
States of America.


                                   KPMG LLP


Houston, Texas
February 10, 2001, except
as to Note B, which is as
of February 27, 2001



                                       19
<PAGE>   21



                           FIRSTCITY LIQUIDATING TRUST
                   SELECTED UNAUDITED QUARTERLY FINANCIAL DATA
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>

                                                  2000                                             1999
                                    ----------------------------------------------    --------------------------------------------
                                     First       Second        Third      Fourth       First      Second       Third       Fourth
                                    Quarter      Quarter      Quarter     Quarter     Quarter     Quarter     Quarter     Quarter
                                    --------     --------     --------    --------    --------    --------    --------    --------
<S>                                 <C>          <C>          <C>         <C>         <C>         <C>         <C>         <C>
Changes in fair value
    of trust assets(1) .........    $  1,715     $  1,436     $  1,290    $  1,278    $  2,113    $  1,660    $  1,137    $ 19,126
Interest income on
    short-term investments .....          45           72           65          51          97          86          46          58
Administrative expense .........        (599)        (647)        (658)       (775)     (1,397)     (1,102)       (661)       (684)
                                    --------     --------     --------    --------    --------    --------    --------    --------
    Net income .................    $  1,161     $    861     $    697    $    554    $    813    $    644    $    522    $ 18,500
                                    ========     ========     ========    ========    ========    ========    ========    ========
</TABLE>

----------
(1) Includes increase of $17.5 million related to 67% partnership interest in
First City Tower in fourth quarter 1999.


Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

         None.

                                    Part III

Item 10. Directors and Executive Officers of the Registrant.

         Role of the Portfolio Committee

         Pursuant to Article IV of the Trust Agreement, except where expressly
limited by the terms of the Trust Agreement, all of the management and executive
authority over the Trust resides in the four-member Portfolio Committee (subject
to increase and reduction). The Trust Agreement provides that such four members
are initially Rick R. Hagelstein (the "Chief Credit Officer Member Position"),
Robert W. Brown (the "Robert W. Brown Member Position"), and Richard E. Bean and
R. David Palmer, as the two members designated by the Equity Committee (the
"Equity Committee Member Positions"). All have been members of the Portfolio
Committee since the Effective Date. Mr. Hagelstein resigned in the second
quarter of 1998 and Joe S. Greak was appointed to replace Mr. Hagelstein.
Background information and the employment histories of Messrs. Bean, Brown,
Greak and Palmer are set forth below.

         Richard E. Bean, 57, has been Executive Vice President and Chief
Financial Officer of Pearce Industries, Inc. since 1976, which company, through
its subsidiaries, markets a variety of oilfield equipment and machinery. Prior
to the Effective Date, Mr. Bean was Chairman of the Equity Committee. Mr. Bean
is currently a director of FirstCity.


                                       20
<PAGE>   22


         Robert W. Brown, 52, has been President of FCLT Loans Asset Corp. since
the Effective Date. As of the Effective Date, Mr. Brown served as Executive Vice
President and Secretary of FirstCity. After the Effective Date he resigned from
FirstCity to devote substantially all of his time to the Trust. Mr. Brown was
Chief Financial Officer of the Debtor beginning in 1991. He served as Executive
Vice President of the Debtor from 1990 to 1992, became a member of the Debtor's
Board of Directors in 1992 and served as President of the Debtor from 1993
through the Effective Date. Mr. Brown was a director and officer of the Debtor
when the Debtor filed a plan of reorganization under the Federal bankruptcy laws
in December 1994.

         Joe S. Greak, 52, has been Senior Vice President, Tax Director and
Secretary of FirstCity since the Effective Date. Mr. Greak was the Tax Manager
of the Debtor from 1993 to the Effective Date.

         R. David Palmer, 58, has been a private investor for the past 25 years.
Prior to the Effective Date, Mr. Palmer was a member of the Equity Committee.
From 1970 to 1995, Mr. Palmer was a Professor of Philosophy at the State
University of New York, Fredonia, New York. Mr. Palmer is currently a director
of Sensatex, Inc.

         Officers and Others

         Jerry D. Thompson, 45, has been Vice President of FCLT Loans Asset
Corp. since February 1997. Prior thereto, Mr. Thompson was Vice President of FCB
Real Estate Services, Inc., a subsidiary of the Trust and the Debtor.

         C. Ivan Wilson, 73, was Chairman of the Board and Chief Executive
Officer of the Debtor from 1991 until the Effective Date and has been Vice
Chairman of the Board of FirstCity since that date.

         Role of the Trustee

         Although all of the management and executive authority over the Trust
resides in the Trustee, the Trustee functions as a directed Trustee under the
sole and absolute discretion of the Portfolio Committee and may not exercise
discretion in the management and conduct of the liquidation of the Trust assets.
The Trustee has no authority or right to refuse to act when so ordered or
directed to do so by the Portfolio Committee. The Trustee is State Street Bank
and Trust Company, formerly Fleet National Bank and Shawmut Bank Connecticut,
N.A. There have been no changes in the Trustee through the date of this Form
10-K.

Item 11. Executive Compensation.

         Compensation of the Trustee

         The compensation paid by the Trust to the Trustee consisted of
administrative fees aggregating $20,500 in each of 2000, 1999 and 1998. Unless
renegotiated, annual administrative fees to be paid to the Trustee shall remain
constant.


                                       21
<PAGE>   23


         Compensation of the Portfolio Committee

         Pursuant to the terms of Article X of the Trust Agreement, the
Portfolio Committee consists of the following four members: Joe S. Greak in the
Chief Credit Officer Member Position, Robert W. Brown in the Robert W. Brown
Member Position, and two members as designated by the Equity Committee, who at
present are Richard E. Bean and R. David Palmer. Pursuant to Section 10.1.1 of
the Trust Agreement, Messrs. Bean and Palmer, or their respective successors,
each receives compensation for his services as a member of the Portfolio
Committee in an amount equal to $12,000 per annum, payable in $3,000 increments
on the first day of each calendar quarter. In addition, pursuant to a resolution
of the Board of Directors of Loans Asset Corp., Messrs. Bean and Palmer each
receive $1,000 for each Portfolio Committee meeting which they attend. The other
two members are not separately compensated for their services as members of the
Portfolio Committee.

         Compensation of Executive Officers and Others

         Executive officers and others of the Trust received compensation during
the last three years as set forth in the following table:

<TABLE>
<CAPTION>
                                                                           ANNUAL COMPENSATION(1)
                  NAME AND                                            ----------------------------
             PRINCIPAL POSITION                   YEAR                  SALARY               BONUS
             ------------------                   ----                ----------          ----------
<S>                                               <C>                 <C>                 <C>
         Robert W. Brown                          2000                $  250,000          $  155,040
         --    President of FCLT                  1999                   250,000             385,460
               Loans Asset Corp.                  1998                   250,000             897,522

         C. Ivan Wilson                           2000                $       --          $  155,040
         --    Vice Chairman of                   1999                        --             385,460
               FirstCity                          1998                        --             872,522

         Joe S. Greak                             2000                $       --          $   77,055
         --    Senior Vice President of           1999                        --             191,577
               FirstCity                          1998                        --             435,145

         Jerry D. Thompson                        2000                $  100,000          $   10,770
         --    Vice President of FCLT             1999                   100,000              36,774
               Loans Asset Corp.                  1998                   100,000             103,376
</TABLE>

----------
(1) Amounts reported for Mr. Wilson and Mr. Greak relate only to Exhibit O of
the Plan.

         Mr. Brown's compensation is determined as set forth in that certain
employment agreement (the "Brown Employment Agreement"), effective as of July 3,
1995, as amended May 1, 1996, by and between FCLT Loans Asset Corp. and Mr.
Brown. The Brown Employment Agreement provides for Mr. Brown's employment with
FCLT Loans Asset Corp. and his duties to the Trust for a term commencing on July
3, 1995 and terminating on dissolution of the Trust. Mr. Brown's duties include
his membership on the Portfolio Committee of the Trust, the management and
payment of creditor claims and the liquidation of the assets of the Trust
pursuant to the terms of the Trust Agreement. In compensation for such services,
Mr. Brown is paid an annual salary of $250,000. Through December 31, 2000, Mr.
Brown was paid $1.4 million in performance-oriented bonuses pursuant to Exhibit
O to the Plan. The Brown Employment Agreement provides for a conditional bonus
in an amount equal to 1.67% of all additional aggregate payments to the holders


                                       22
<PAGE>   24


of the Class B Certificates and the Class C Certificates. The payment of such
conditional bonus to Mr. Brown is to be determined by the Portfolio Committee.
In the event that the Brown Employment Agreement is terminated by the Portfolio
Committee prior to the termination date of the Trust, or upon the death or
disability of Mr. Brown, Mr. Brown or his estate is entitled to continue to
receive certain bonuses pursuant to the terms set forth in the Brown Employment
Agreement. Mr. Brown's unpaid bonuses will be forfeited in the event that he
terminates the Brown Employment Agreement or is terminated for cause by FCLT
Loans Asset Corp. prior to the date of the expiration of the Brown Employment
Agreement.

         Pursuant to Section 9.8 of the Plan, Mr. Brown (as described in the
previous paragraph), along with C. Ivan Wilson, Joe S. Greak, former employees
of the Debtor and certain employees of the Trust, share in a bonus pool and
executive long-term incentive plan, the provisions of which are set forth in
Exhibit O to the Plan. In 2000, bonuses totaling $.4 million ($.1 million to Mr.
Brown) were paid pursuant to Exhibit O. In 1999, bonuses totaling $1.1 million
($.4 million to Mr. Brown) were paid pursuant to Exhibit O. In 1998, bonuses
totaling $2.6 million ($.9 million to Mr. Brown) were paid pursuant to Exhibit
O.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

         (a) Since the Trust has no outstanding "voting securities" within the
meaning of the Exchange Act and the regulations thereunder, the disclosure
requirements of Form 10-K pertaining to 5% holders of voting securities are not
applicable.

         (b) The following table sets forth certain information with respect to
the beneficial ownership of the Class B and Class C Beneficial Interests, as of
January 31, 2001, by the members of the Portfolio Committee. The Trustee is not
the beneficial owner of any Class B or Class C Beneficial Interests.

<TABLE>
<CAPTION>


                                                             NUMBER OF CLASS B BENEFICIAL INTERESTS
                                                                   AND PERCENTAGE OF OUTSTANDING
                                                                    CLASS B BENEFICIAL INTERESTS
                                                                       AS OF JANUARY 31, 2001
                                                             --------------------------------------
                                                                BENEFICIAL           PERCENT
NAME OF OWNER OR IDENTITY OF GROUP                              OWNERSHIP           OF CLASS
----------------------------------                           ----------------     -----------------
<S>                                                          <C>                  <C>
Robert W. Brown ............................................            --              --
Richard E. Bean ............................................        98,100             4.0
Joe S. Greak ...............................................            --              --
R. David Palmer ............................................            --              --

All Portfolio Committee members as a group (4 persons) .....        98,100             4.0
</TABLE>



                                       23
<PAGE>   25


<TABLE>
<CAPTION>


                                                             NUMBER OF CLASS C BENEFICIAL INTERESTS
                                                                   AND PERCENTAGE OF OUTSTANDING
                                                                    CLASS C BENEFICIAL INTERESTS
                                                                       AS OF JANUARY 31, 2001
                                                             --------------------------------------
                                                                BENEFICIAL           PERCENT
NAME OF OWNER OR IDENTITY OF GROUP                              OWNERSHIP           OF CLASS
----------------------------------                           ----------------     -----------------
<S>                                                                 <C>           <C>
Robert W. Brown ............................................        197                  *
Richard E. Bean ............................................         --                 --
Joe S. Greak ...............................................         --                 --
R. David Palmer ............................................         --                 --

All Portfolio Committee members as a group (4 persons) .....        197                  *
</TABLE>

----------
*  Less than 1%

         (c)      Because the Trust does not have any "voting securities" within
the meaning of the Exchange Act and the regulations thereunder, changes in
ownership of voting securities will not result in a change of control of the
Trust. Pursuant to the terms of the Trust Agreement, all of the management and
executive authority over the Trust resides in the four-member Portfolio
Committee.

                  The Trust has no knowledge of any arrangements which may
result in a change of control of the Trust. However, in the event that the
position on the Portfolio Committee held by Robert W. Brown is vacated for any
reason, the number of Portfolio Committee members will be permanently reduced to
three. In such instance, two of the three current remaining members of the
Portfolio Committee will be affiliated with FirstCity and, as a result,
FirstCity may be deemed to have some control over Portfolio Committee decisions.

Item 13.          Certain Relationships and Related Transactions.

                  None.

                                     Part IV

Item 14.          Exhibits, Financial Statement Schedules, and Reports on Form
                  8-K.

         (a)      1.       Financial Statements

                  The consolidated financial statements of the Trust are
                  incorporated by reference to Item 8 "Financial Statements and
                  Supplementary Data" of this report.

                  2.       Financial Statement Schedules

                  Financial statement schedules have been omitted because the
                  information is either not required, not applicable, or is
                  included in Item 8 - "Financial Statements and Supplementary
                  Data."




                                       24
<PAGE>   26



                  3.       Exhibits

                  Exhibit
                    No.    Description

                  2.1(1)   Joint Plan of Reorganization for First City
                           Bancorporation of Texas, Inc., as modified, under
                           Chapter 11 of the United States Bankruptcy Code, as
                           confirmed by the U.S. Bankruptcy Court for the
                           Northern District of Texas, Dallas Division, on May
                           31, 1995.

                  2.2(5)   Order Extending Term of FirstCity Liquidating Trust,
                           dated June 18, 1999.

                  3.1(1)   The Liquidating Trust Agreement, dated as of July 3,
                           1995, by and between First City Bancorporation of
                           Texas, Inc. and Shawmut Bank Connecticut, National
                           Association (subsequently Fleet National Bank, now
                           State Street Bank and Trust Company), as Trustee.

                  10.1(3)  Employment Agreement, effective as of July 3, 1995,
                           by and between FCLT Loans Asset Corp. and Robert W.
                           Brown, as amended May 1, 1996.

                  10.2(2)  Settlement Agreement, dated as of June 22, 1994, as
                           amended as of January 30, 1995, by and among
                           FDIC-Corporate, the FDIC-Receivers and the First City
                           Parties.

                  10.3(3)  Conveyance and Indemnification Agreement, dated
                           December 23, 1996, between FDIC-Corporate, the
                           FDIC-Receivers, FCLT Loans, L.P. and the Trust.

                  10.4(4)  Extension of Conveyance and Indemnification
                           Agreement, dated in April 1999, between
                           FDIC-Corporate, the FDIC-Receivers, FCLT Loans, L.P.
                           and the Trust.
----------
                  (1) Filed as the exhibit indicated to the Registration
                  Statement on Form 10 filed with the Securities and Exchange
                  Commission on May 1, 1996 and incorporated herein by
                  reference.

                  (2) Filed as the exhibit indicated to the Registration
                  Statement on Form 10/A filed with the Securities and Exchange
                  Commission on July 10, 1996 and incorporated herein by
                  reference.

                  (3) Filed as the exhibit indicated to the Form 10-K for the
                  fiscal year ended December 31, 1996 filed with the Securities
                  and Exchange Commission and incorporated herein by reference.

                  (4) Filed as the exhibit indicated to the Form 10-Q for the
                  quarter ended March 31, 1999 filed with the Securities and
                  Exchange Commission and incorporated herein by reference.

                  (5) Filed as the exhibit indicated to the Form 10-Q for the
                  quarter ended June 30, 1999 filed with the Securities and
                  Exchange Commission and incorporated herein by reference.

         (b)      Reports on Form 8-K. No report on Form 8-K was filed by the
                  Registrant with the Commission during the quarterly period
                  ended December 31, 2000.


                                       25
<PAGE>   27


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.


                                   STATE STREET BANK AND TRUST COMPANY,
                                   as Trustee



Date:  March 15, 2001              /s/ Susan T. Keller
                                   ---------------------
                                   Name: Susan T. Keller
                                        ----------------
                                   Title: Vice President
                                         ---------------