UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): March 1, 2010
Orleans
Homebuilders, Inc.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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1-6830
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59-0874323
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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3333
Street Road, Suite 101, Bensalem, PA
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19020
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(Address
of Principal Executive Offices)
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(Zip
Code)
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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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.03 Bankruptcy or
Receivership.
On March 1, 2010, Orleans Homebuilders,
Inc. (the "Company") and certain of its subsidiaries (collectively, the
"Debtors") filed voluntary petitions in the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court") seeking reorganization relief
under the provisions of Chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code"). We anticipate that the Chapter 11 cases will be
jointly administered under the caption In re Orleans Homebuilders, Inc., et al.,
Case No. 10-10684 (PJW) (the "Chapter 11 Cases"). The Debtors will
continue to operate their businesses and manage their properties as debtors in
possession under the jurisdiction of the Bankruptcy Court and in accordance with
the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy
Court.
Item 2.04 Triggering Events That
Accelerate or Increase a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement.
The filing of the Chapter 11 Cases
described in Item 1.03 above constituted an event of default under various debt
instruments and documents described below.
(i)
The Company’s Second Amended and
Restated Revolving Credit Loan Agreement, dated as of September 30,
2008. As previously reported, this Revolving Credit Loan Agreement
matured on February 12, 2010 and the lenders have demanded payment of all
outstanding amounts. As of February 25, 2010,
approximately
$311.0 million of cash borrowings were outstanding, excluding approximately $15
million of letters of credit and other assurances which either had been or would
likely be drawn prior to the letter of credit maturity date of February 27,
2010. In addition, there was approximately $15.1 million in
additional loan fees earned pursuant to the
Second Amended and Restated Revolving
Credit Loan Agreement
that were due upon maturity;
(ii)
Junior Subordinated Note Indenture dated
as of September 30, 2005 pursuant to which OHI Financing, Inc., a
wholly-owned subsidiary of the Company, issued the 8.52% junior subordinated
note underlying the Company’s $30 million issue of trust preferred
securities. The event of default entitles the trustee and/or the holders of
the trust preferred securities to exercise all of their remedies under such
junior subordinated note indenture, including accelerating payment of the
outstanding principal and accrued, but unpaid interest, together with a premium
of 7.5% of the outstanding principal. As of February 28, 2010, there
is $30 million of principal outstanding under the 8.52% junior subordinated
note, plus accrued interest of approximately $1.7 million. As
previously reported, there was a pre-existing event of default under this
indenture as a result of the failure to make one or more required interest
payments.
(iii)
Junior Subordinated
Indenture between OHI Financing, Inc., as issuer, and The Bank of New York
Mellon as Trustee, dated as of August 3, 2009 and the Notes issued pursuant
thereto. The event of default entitles the trustee and/or the holders
of the notes to exercise all of their remedies under such junior subordinated
note indenture, including accelerating payment of the outstanding principal and
accrued, but unpaid interest. As of February 28, 2010, there is $89.1
million of notional principal outstanding under the junior subordinated notes
(taking into account principal repaid from the proceeds of the $5 million letter
of credit drawn in December, 2009), with a balance sheet carrying value of
approximately $77.8 million, plus accrued interest of approximately $0.2
million.
Forward
Looking Statements
Certain
information included herein and in other Company statements, reports and SEC
filings is forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995, including, but not limited to, statements
concerning the ability of the Company to enter into new financing arrangements,
including without limitation the DIP Credit Facilities; required bankruptcy
court approvals; potential restructurings of the Company’s liabilities; any
value that may be provided by the Company’s unsecured creditors or its equity
holders; payments on its 8.52% Trust Preferred Securities and the Junior
Subordinated Notes; potential strategic transactions, including refinancing,
recapitalization and sale transactions involving the Company; payments to trade
creditors, employees, or customers; anticipated and potential asset sales;
anticipated liquidity; anticipated increase in net new orders, conditions in or
recovery of the housing market, and economic conditions; the Company’s long-term
opportunities; the timing of future filings by the Company of its Annual and
Quarterly Reports and the continued listing of the Company’s common stock on the
NYSE Amex Exchange; continuing overall economic conditions and conditions in the
housing and mortgage markets and industry outlook; anticipated or expected
operating results, revenues, sales, net new orders, backlog, pace of sales, spec
unit levels, and traffic; future or expected liquidity, financial resources,
debt or equity financings, amendments to or extensions of our existing revolving
Credit Facility; strategic transactions and alternatives, including but not
limited to the sale of the Company; the anticipated impact of bank reappraisals;
future impairment charges; future tax valuation allowance and its value;
anticipated or possible federal and state stimulus plans or other possible
future government support for the housing and financial services industries;
anticipated cash flow from operations; reductions in land expenditures; the
Company’s ability to meet its internal financial objectives or projections, and
debt covenants; the Company’s future liquidity, capital structure and finances;
and the Company’s response to market conditions. Such forward-looking
information involves important risks and uncertainties that could significantly
affect actual results and cause them to differ materially from expectations
expressed herein and in other Company statements, reports and SEC
filings. These risks and uncertainties include the Company’s ability
to continue as a going concern; the Company’s ability to enter into the DIP
Credit Facilities and to operate under terms of the DIP Credit Facilities; the
Company’s ability to obtain court approval with respect to motions relating to
the Chapter 11 Cases, including “first-day” motions; the ability of the Company
to develop, confirm and consummate one or more plans of reorganization with
respect to the Chapter 11 proceeding; the ability of the Company to obtain and
maintain normal terms with vendors and service providers and to maintain
contracts critical to its operations; the ability of the Company to continue to
attract buyers of its homes; the ability to continue normal business operations;
the potential adverse impact of the Chapter 11 Cases; the ability of the Company
to attract, motivate and/or retain key executives and employees; access to
liquidity; local, regional and national economic conditions; the effects of
governmental regulation; the competitive environment in which the Company
operates; fluctuations in interest rates; changes in home prices; the
availability of capital; our ability to engage in a financing or strategic
transaction; the availability and cost of labor and materials; our dependence on
certain key employees; and weather conditions. Additional information
concerning factors the Company believes could cause its actual results to differ
materially from expected results is contained in Item 1A of the Company’s Annual
Report on Form 10-K/A for the fiscal year ended June 30, 2008 filed with the SEC
and subsequently filed Quarterly Reports on Form 10-Q, as well as the Current
Reports on Form 8-K and press releases filed with the Securities and Exchange
Commission on August 14, 2009, October 6, 2009, November 5, 2009, December 9,
2009, December 23, 2009, February 1, 2010 and February 19, 2010.
Item
8.01 Other Events.
On March
1, 2010, the Company issued a press release discussing, among other things, the
Bankruptcy Cases, a copy of which is furnished herewith as Exhibit
99.1.
Item
9.01 Financial Statements and Exhibits.
The
following exhibits are filed or furnished with this Current Report on
Form 8-K:
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Exhibit No.
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Description
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99.1
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Press
release of Orleans Homebuilders, Inc. dated March 1, 2010. (furnished
herewith).
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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:
March 3, 2010
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Orleans
Homebuilders, Inc.
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By:
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Garry P. Herdler
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Name:
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Garry
P. Herdler
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Title:
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Executive
Vice President,
Chief
Financial Officer and
Principal
Financial Officer
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EXHIBIT
INDEX
The
following exhibits are filed or furnished with this Current Report on
Form 8-K:
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Exhibit No.
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Description
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99.1
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Press
release of Orleans Homebuilders, Inc. dated March 1, 2010. (furnished
herewith).
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