Tarragon Announces Restructuring Support and Forbearance Agreement with Holders of $125 Million of Subordinated Notes
04 November 2008 - 9:06AM
Business Wire
Tarragon Corporation (NASDAQ: TARR) today announced that it has
entered into a restructuring support and forbearance agreement with
the holders of its $125 million of corporate-level unsecured
subordinated notes. The holders of the subordinated notes have
agreed to support a financial restructuring of Tarragon and to
refrain from exercising any of their rights and remedies under the
terms of the subordinated notes through June 30, 2009, subject to
the terms and conditions of the agreement. As part of the financial
restructuring, the subordinated notes and approximately $38 million
of indebtedness held by an affiliate of William S. Friedman,
Tarragon�s Chairman and Chief Executive Officer, and Robert P.
Rothenberg, Tarragon�s President, would be restructured and become
obligations of a reorganized Tarragon or an affiliated issuer. The
agreement also contemplates that Tarragon would enter into one or
more definitive agreements with a sponsor of an overall financial
restructuring plan. Under the overall plan, which may be
implemented through a voluntary petition for Chapter 11 bankruptcy
protection, the sponsor of the plan and certain Tarragon
debtholders would receive shares of reorganized Tarragon�s equity
representing a controlling interest in the reorganized company in
exchange for the assumption of indebtedness discussed above. The
Tarragon board of directors is being advised by Lazard in
connection with the board�s evaluation of alternatives that may be
available to Tarragon to maximize stakeholder value. These
alternatives may include, but are not limited to, a possible sale
or other recapitalization or restructuring of the Company, and all
available forms and sources of financing, property sales or other
strategic transactions, including the implementation of an overall
financial restructuring plan. Forward-Looking Statements
Information in this press release includes "forward-looking
statements" made pursuant of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 that are based on
management�s expectations, estimates, projections and assumptions.
Words such as "expects," "anticipates," "intends," "estimates" and
variations of these words and similar expressions are intended to
identify forward-looking statements, which include but are not
limited to statements regarding Tarragon�s expectations regarding
the terms and conditions of a financial restructuring of the
company. Actual results and the timing of certain events could
differ materially from those projected or contemplated by the
forward-looking statements due to a number of factors, including,
but not limited to: the ability of Tarragon to negotiate
satisfactory definitive agreements to implement an overall
financial restructuring plan and the satisfaction of any conditions
thereunder and under the restructuring support and forbearance
agreement with the holders of Tarrragon�s subordinated notes;
conditions in the homebuilding industry and residential real estate
and mortgage markets; risks associated with the implementation of
the financial restructuring; conditions in the capital and
financial markets generally; and general economic conditions,
interest rates and other risk factors outlined in Tarragon�s SEC
reports, including its Annual Report on Form 10-K for the year
ended December 31, 2007 and more recent Quarterly Reports on Form
10-Q.
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