ROCKY HILL, Conn., Feb. 2, 2011 /PRNewswire/ -- Realty Finance
Corporation (Pink Sheets: RTYFZ) (the "Company") today announced
that it has entered into a services agreement (the "Agreement") to
engage Waldron H. Rand &
Company, P.C. ("WHR"), one of the oldest accounting firms in
Massachusetts with extensive real
estate experience, to provide certain day-to-day corporate,
finance, asset management and tax services to the Company. In
consideration of such services to be provided by WHR, the Company
agreed to pay WHR a monthly fee of $60,000 for the corporate, finance and asset
management services (collectively, the "Monthly Fee"), and a
separate annual fee of $60,000 for
the standard periodic tax return services. The Agreement will
terminate on December 31, 2011,
provided that (i) the Company may terminate the Agreement at its
sole discretion at any time on or after March 31, 2011, subject to a 30-day notice
requirement and (ii) in the event WHR believes that the Monthly Fee
needs to be adjusted upward due to the expansion of the scope of
the services, WHR may terminate the Agreement on September 18, 2011, subject to a three-month
notice requirement. Furthermore, the Company may terminate
the Agreement for cause at any time upon 30 days prior written
notice. The Agreement contains customary representations,
warranties and indemnification provisions. With the engagement of
WHR as external advisor, effective as of February 18, 2011, the Company will have no
active employees of its own.
The Company today also announced that Mr. Daniel Farr will step down as the Chief
Financial Officer and Treasurer of the Company, effective
February 18, 2011. The
Company's board of directors (the "Board") decided to not renew Mr.
Farr's employment contract and the contracts of its independent
contractors. The Board felt it was imperative to retain the
services of a third party advisory firm to ensure the continuity of
the Company's day-to-day operations. Mr. Kenneth J. Witkin has been appointed Treasurer
of the Company effective upon Mr. Farr's resignation. Mr.
Witkin was formerly the Chief Executive Officer of the Company from
September 4, 2007 until August 3, 2009 and has been a director of the
Company since September 4, 2007.
In addition, in light of the recent financial and credit crises
in the real estate, credit and structured finance marketplaces, the
Board has solicited, evaluated and engaged in discussions with
respect to a wide range of strategic alternatives over the past two
and half 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.
While the Board continues to explore various strategic options
for the Company, there is no guarantee that any agreement could be
reached. In addition, the Company has been evaluating a
liquidation of the Company, including filing a Chapter 7
bankruptcy, and may ultimately determine to wind down the affairs
of its business and distribute remaining cash, if any, to its
stockholders, subject to a vote by them, which may occur later in
2011 in the event the Company is unsuccessful in consummating a
strategic transaction.
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
