ROCKY HILL, Conn., Oct. 20 /PRNewswire/ -- Realty Finance
Corporation (Pink Sheets: RTYFZ) (the "Company"), today is
providing investors with information omitted by Beck Street Capital
("Beck Street") from its press release issued yesterday. The
supplemental information furnished by the Company is set out
below.
In January of this year, Beck Street provided the Company with a
preliminary indication of interest in a transaction in which Beck
Street would assume control of the Company without any payment to
the Company's stockholders. The preliminary indication of
interest
- did not provide for any infusion of capital into the
Company;
- provided for a temporary deferral of newly proposed external
management fees that Beck Street proposed would be payable by
the Company to Beck Street (and did not provide, as
yesterday's press release suggested, that Beck Street would manage
the Company for an interim period for free);
- lacked a specific business plan; and
- provided that the Company would issue warrants entitling Beck
Street to acquire an unspecified number of shares of the
Company's common stock for an unspecified price.
Beck Street's indication of interest was preliminary and
conditional insofar as
- it was expressly conditioned on Beck Street performing
due diligence, and
- it gave no specifics as to the warrants.
The Company proceeded to have several conversations regarding
such proposal and stated its concern that no capital infusion was
contemplated and requested a more specific business plan from Beck
Street on how it would achieve stockholder growth. As a
result of several factors, including but not limited to, the lack
of capital commitment which the Board of Directors of the Company
thought would be necessary to institute a growth plan and the
absence of a specific business plan, the Company chose not to
pursue this proposal any further. However, it indicated it
would be willing to reconsider any future proposal that would
address the concerns raised by the Board of Directors of the
Company. The Company had additional conversations with Beck
Street in May and June of this year which did not result in a
revised proposal or additional information and, prior to
yesterday's press release, has not engaged in any communication
regarding such a proposal since July of this year.
The Company has solicited, evaluated and engaged in discussions
with respect to a wide range of strategic alternatives over the
past three years. It has investigated each proposal in light of the
circumstances surrounding the Company at the time, and will
continue to do so in the future in the event the Board receives new
or modified proposals. The strategic alternatives that the Board
has received and investigated to date have either been determined
not to have been viable or lacked sufficient information or
credibility to enable the Board to make informed decisions as to
the merits of such alternatives or to proceed with such action.
Given the Company's current financial position, it is not in the
financial position to expend the cash or resources to pursue
proposals that are speculative.
The Board continues to explore various strategic options for the
Company. There is no assurance, however, that any
definitive agreement for any such strategy's option will be
reached. In addition, the Company has been evaluating a liquidation
of the Company, including filing a Chapter 7 bankruptcy, and
ultimately may determine to wind down the affairs of its business
and distribute remaining cash, if any, to its stockholders due to,
among other things, the Company's inability to complete a strategic
transaction, the significant reduction in the value of the
Company's platform, the Company's inability to execute its business
plan, the Company's inability to obtain new capital, the Company's
lack of future sources of cash flow, the Company's operating cash
shortfalls, the Company's ability to operate as a going concern,
the numerous defaulted investments in the Company's portfolio, the
significant reduction of Company personnel and the continuing
volatility of real estate and real estate credit markets.
The Company continues to focus on controlling operating expenses
while effectively managing its investments, including CDO I.
Despite the difficult commercial real estate environment and the
disappointing financial results, the Company remains committed to
maximizing stockholder value.
About Realty Finance Corporation
Realty Finance Corporation is a commercial real estate specialty
finance company primarily focused on managing a diversified
portfolio of commercial real estate-related loans and securities.
For more information on the Company, please visit the Company's
website at http://www.realtyfinancecorp.com.
The Company's common stock is currently quoted on the Pink OTC
Markets, or Pink Sheets. While not a requirement, the Pink Sheets
encourages companies having their securities quoted thereon to
provide adequate current information in accordance with its
disclosure guidelines. The Company will evaluate the need to issue
press releases containing information similar to such information
disclosed herein. There is no assurance that the Company will
provide timely periodic disclosures or at all.
The Company has elected to qualify to be taxed as a real estate
investment trust, or REIT, for U. S. federal income tax purposes
commencing with the taxable year ended December 31, 2005. As a REIT, the Company
generally will not be subject to U. S. federal income tax on that
portion of income that is distributed to stockholders if at least
90% of the its REIT taxable income is distributed to its
stockholders. The Company conducts its operations so as to not be
regulated as an investment company under the Investment Company Act
of 1940, as amended, or the 1940 Act. The Company has not had any
taxable income in 2008 and 2009 and does not expect to have any
taxable income in the future.
Forward-Looking Information
This press release contains forward-looking statements based
upon the Company's beliefs, assumptions and expectations of its
future performance, taking into account all information currently
available. These beliefs, assumptions and expectations can change
as a result of many possible events or factors, not all of which
are known to the Company or are within its control. If a change
occurs, the Company's business, financial condition, liquidity and
results of operations may vary materially from those expressed in
its forward-looking statements. The factors that could cause actual
results to vary from the Company's forward-looking statements
include: the Company's ability to continue to cover its operating
cash shortfall; the risk factors included as part of the Company's
Annual Report on Form 10-K for the period December 31, 2008 filed on March 16, 2009; the Company's future operating
results; its business operations and prospects; general volatility
of the securities market in which the Company invests and the
market prices of its common stock; the effect of trading on the
Pink Sheets; availability, terms and deployment of short-term and
long-term capital; availability of qualified personnel; changes in
the industry; interest rates; the debt securities, credit and
capital markets, the general economy or the commercial finance and
real estate markets specifically; performance and financial
condition of borrowers and corporate customers; the status of the
appeal of the class action lawsuit; any future litigation that may
arise; the ultimate resolution of the Company's numerous defaulted
loans; the state of the Company's joint venture investments; the
ability to continue as a going concern; availability of liquidity;
and other factors, which are beyond the Company's control. The
Company undertakes no obligation to publicly update or revise any
of the forward-looking statements. For further information, please
refer to the Company's previous periodic filings with the
Securities and Exchange Commission. However, the Company is no
longer a Securities and Exchange Commission reporting company as of
March 16, 2009 and therefore, such
information is not current and circumstances have changed
significantly since the date of such filings.
SOURCE Realty Finance Corporation
Copyright . 20 PR Newswire
