- Current report filing (8-K)
20 February 2010 - 8:41AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): February 13, 2010
Orleans
Homebuilders, Inc.
(Exact
Name of Registrant as Specified in Charter)
Delaware
|
|
1-6830
|
|
59-0874323
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
|
(Commission
File
Number)
|
|
(IRS
Employer
Identification
No.)
|
|
3333
Street Road, Suite 101, Bensalem, PA
|
|
19020
|
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
|
|
|
|
|
Registrant’s
telephone number, including area code:
(215) 245-7500
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (
see
General Instruction A.2. below):
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
ITEM
2.04. Triggering Events That Accelerate or Increase a Direct
Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
As
previously disclosed, Orleans Homebuilders, Inc. (the “Company”) and its senior
management have been working actively with the Company’s bank lenders to obtain
a maturity extension of its Second Amended and Restated Revolving Credit Loan
Agreement dated September 30, 2008 (the “Credit Facility”), as amended from
time-to-time. Any extension or similar modification or accommodation
under the Credit Facility requires the consent of 100% of the approximately 17
bank lenders. The Company and its lenders under the Credit Facility
were not able to obtain the necessary bank approvals to extend the maturity of
the Credit Facility pursuant to the non-binding term sheet agreed to by the
Company with certain lenders on December 3, 2009. The Company and its
lenders were also unable to agree on any temporary modification of, or other
accommodation under, the Credit Facility.
As a
result, the final maturity of the Credit Facility occurred on February 12, 2010,
and the Company is now in default under the Credit Facility. The
occurrence and continuation of an event of default under the Credit Facility,
unless waived, gives the lenders the right to demand immediate payment in full
of all amounts outstanding, to foreclose on collateral and exercise other rights
and remedies granted under the Credit Facility and related loan documents and as
may be available pursuant to applicable law.
In
addition, on February 17, 2010, the Company received from Wachovia Bank,
National Association, as Administrative Agent under the Credit Facility, a
notice of default and reservation of rights letter notifying the Company of the
event of default that occurred and is continuing as a result of the Company’s
failure to repay all amounts outstanding under the Credit Facility on the
Maturity Date as well as asserting that an additional event of default has
occurred and is continuing as a result of the Company’s failure to comply with
Section 7.2 of the Credit Facility, which prohibits the Company from granting,
permitting or allowing to exist any lien on any of the assets of the Company or
any borrower under the Credit Facility, other than specified permitted
liens. In addition, pursuant to the terms of the various amendments
and waivers entered into in connection with the Credit Facility, the occurrence
of any event of default also triggers other events of defaults pursuant to the
terms of those amendments and waivers.
In the
February 17, 2010 letter, Wachovia Bank, as Administrative Agent, also demanded
that the Company, as guarantor, and all borrowers under the Credit Facility,
repay all obligations outstanding under the Credit Facility and asserted that
such obligations would bear interest at the “default rate” under the Credit
Facility, until repaid. The default rate under the Credit Facility is
the otherwise applicable interest rate, plus 4%. As of February 18,
2010, approximately $310.6 million of borrowings and approximately $15.0 million
of letters of credit and other assurances were outstanding under the Credit
Facility. In addition, there is approximately $15.1 million in
additional loan fees earned pursuant to the Credit Agreement that were due upon
maturity. The Company does not have sufficient funds to repay the
amounts outstanding under the Credit Facility.
The
Company continues to consider certain options for new or modified funding
sources to continue normal operations, including in connection with an in-court
or out-of-court restructuring of the Company’s liabilities; continuing its
negotiations regarding a sale or recapitalization of the Company; or obtaining a
temporary modification of or other accommodation under the Credit
Facility. However, there can be no assurance that the Company will be
able to consummate any transaction on terms acceptable to it or the senior
secured lenders, or that any such transaction would provide any value for either
the Company’s unsecured creditors or its equity holders. The Company
intends to act promptly to resolve its financing issues, although there can be
no assurance that the Company will be able to do so at all or on a timely
basis.
Item
8.01 Other Events.
On
February 19, 2010, the Company issued a press release discussing, among other
things, the Credit Facility, a copy of which is furnished herewith as Exhibit
99.1.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
The
following exhibits are filed or furnished with this Current Report on
Form 8-K:
Exhibit No.
|
|
Description
|
99.1
|
|
Press
release of Orleans Homebuilders, Inc. dated February 19, 2010. (furnished
herewith).
|
SIGNATURE
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 hereunto
duly authorized.
Dated:
February 19, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Orleans
Homebuilders, Inc.
|
|
|
|
|
|
By:
|
Garry P.
Herdler
|
|
|
Name:
|
Garry
P. Herdler
|
|
|
Title:
|
Executive
Vice President,
|
|
|
|
Chief
Financial Officer and
|
|
|
|
Principal
Financial Officer
|
EXHIBIT
INDEX
The
following exhibits are filed or furnished with this Current Report on
Form 8-K:
Exhibit No.
|
|
Description
|
99.1
|
|
Press
release of Orleans Homebuilders, Inc. dated February 19, 2010 (furnished
herewith).
|
Orleans Homebuilders (AMEX:OHB)
Historical Stock Chart
From Apr 2024 to May 2024
Orleans Homebuilders (AMEX:OHB)
Historical Stock Chart
From May 2023 to May 2024