HCDPQ Harbor Custom Development Inc (PK)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 15, 2024

 

Harbor Custom Development, Inc.

(Exact name of registrant as specified in its charter)

 

Washington		001-39266		46-4827436
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1201 Pacific Avenue, Suite 1200

Tacoma, WA 98402

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code (253) 649-0636

 

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):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None.*

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

*The Nasdaq Stock Market LLC filed a Form 25-NSE on February 15, 2024 to deregister the Company’s securities under Section 12(b) of the Securities Exchange Act of 1934, as amended.

 

 

 

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on December 27, 2023 (the “December 27, 2023 Report”), due to the Bankruptcy Petition (defined below), other pending matters, and in accordance with Listing Rules 5101, 5110(b) and IM-5101-1, The Nasdaq Stock Market LLC (“Nasdaq”) suspended trading of the Company’s securities on December 21, 2023.

 

On December 21, 2023, the Company’s securities began trading over the counter on the OTC Markets’ Pink Current Information under the symbols “HCDIQ,” “HCDPQ,” “HCDWQ,” and “HCDZQ.”

 

On February 15, 2024, Nasdaq filed a Form 25-NSE with the Commission which will remove all of the Company’s securities from listing and registration on Nasdaq.

 

Item 8.01. Other Events

 

Also as previously disclosed in the December 27, 2023 Report, the Company filed a voluntary petition (the “Bankruptcy Petition”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Western District of Washington (such court, the “Bankruptcy Court” and such case, the “Chapter 11 Case”) on December 11, 2023. The Chapter 11 Case is being jointly administered under the caption In re Harbor Custom Development, Inc., et al., Case No. 23-42180-MJH.

 

On February 16, 2024, the Company issued a press release announcing its intention to file a Chapter 11 plan (the “Chapter 11 Plan”) to the Bankruptcy Court approximately in late February proposing the orderly wind down of the Company’s operations and the voluntary liquidation of all of its remaining assets, rather than a restructuring of its business. The proposed Chapter 11 Plan is subject to the approval of the Bankruptcy Court.

 

Further, the Company disclosed that they retained Keen-Summit Capital Partners LLC (“Keen”), an investment banking firm, to manage the sale of the Company’s multi-family real estate portfolio. The portfolio includes the Belfair View Apartments in Belfair, Washington; the Bridgeview Trail Apartments in Port Orchard, Washington; the Meadowscape Apartments in Olympia, Washington; and the Pacific Ridge Apartments in Tacoma, Washington. Any sale by Keen is subject to approval by the Bankruptcy Court.

 

The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein.

 

Additional Information on the Chapter 11 Cases

 

Court filings and information about the Case, including the Order, can be found at https://cases.creditorinfo.com/hcdi. The documents and other information available via website or elsewhere are not part of this Current Report and shall not be deemed incorporated herein.

 

Item 9.01 - Financial Statements and Exhibit

 

(d) Exhibits.

 

The following exhibits are filed with this Current Report on Form 8-K:

 

Exhibit Number		Description
99.1		Press Release of Harbor Custom Development dated February 16, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

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.

 

	Harbor Custom Development, Inc.
Date: February 20, 2024	By:	/s/ Jeff Habersetzer
		Jeff Habersetzer
		Interim Chief Executive Officer and Interim President

 

 

 

Exhibit 99.1

 

 

Harbor Custom Development, Inc., Announces Intentions to Liquidate via Chater 11 Plan

 

TACOMA, Wash., February 16, 2024, (GLOBENEWSWIRE) – As previously announced, on December 11, 2023, Harbor Custom Development, Inc. (OTC PK: HCDIQ, HCDPQ, HCDWQ, HCDZQ) (collectively with certain of its wholly owned subsidiaries described below, “the Company”) voluntarily filed for protection under Chapter 11 of the United States Bankruptcy Code in the Western District of Washington at Tacoma. The Company today announced its plan to continue to wind down its operations and voluntarily liquidate all of its assets through an approved Chapter 11 Plan.

 

The Company has retained Keen-Summit Capital Partners LLC, a leading real estate brokerage and investment banking firm based in New York, NY, to manage the sale of its premier multi-family real estate portfolio, which represents a rare opportunity to invest in one of the Pacific Northwest’s thriving real estate markets. Keen-Summit has a well-deserved reputation for handling complex real estate transactions. Shelly Crocker, the Company’s Chief Restructuring Officer stated, “Our decision to partner with Keen-Summit is a strategic step towards maximizing value on our multi-family portfolio under a Chapter 11 Plan.”

 

The multi-family portfolio includes four projects: Belfair View Apartments in Belfair, WA; Bridgeview Trail Apartments in Port Orchard, WA; Meadowscape Apartments in Olympia, WA; and Pacific Ridge Apartments in Tacoma, WA. An auction has yet to be scheduled. Stalking horse offers are being considered. Additional details are available in a virtual data room at HarborCustom-BankruptcySale.com. For direct inquiries, contact Keen-Summit Capital Partners, 646-381-9222. The sale is subject to court approval.

 

The Company explored the possibilities of restructuring its business to continue as a going concern, but unfortunately, has found no viable plan to do so. Subject to approval of the Bankruptcy Court, the Company now intends to complete an orderly wind-down of its business, including sales of its remaining assets in Washington, California, Florida and Texas, to maximize any potential recovery for the Company’s creditors. The Company’s holdings near Semiahmoo, Washington will also be put on the market shortly. The Company believes it is unlikely that the liquidation process will result in any material return to its equity shareholders.

 

The Company plans to submit a Chapter 11 Plan proposing liquidation of its assets to the Bankruptcy Court for approval in late February.

 

 

Additional Information

 

Resources for the Company’s creditors and equity interest holders can be found by visiting the website at https://cases.creditorinfo.com/hcdi, including court filings and other documents related to the Chapter 11 process. Aditi Paranjpye at Cairncross & Hempelmann, P.S. is serving as lead bankruptcy legal counsel to the Company.

 

About Harbor Custom Development, Inc.

 

Harbor Custom Development, Inc. is a real estate development company which is now in the process of winding-down its operations and liquidating all of its assets pursuant to a proposed Chapter 11 Liquidation Plan, subject to Bankruptcy Court approval.

 

Forward-Looking Statements

 

Certain statements in this press release may be considered forward-looking statements, including statements with respect to the Company’s pursuit of bankruptcy protection and approval of a Chapter 11 Liquidation Plan. Forward-looking statements generally relate to future events and can be identified by terminology such as “may,” “should,” “could,” “might,” “plan,” “possible,” “strive,” “budget,” “expect,” “intend,” “estimate,” “believe,” “predict,” “potential,” “pursue,” “aim,” “goal,” “mission,” “anticipate” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain risks and other factors, which include the following: risks and uncertainties relating to the Company’s Chapter 11 cases, including but not limited to, the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 cases, the effects of the Chapter 11 cases on the Company and on the interests of various constituents, Bankruptcy Court rulings in the Chapter 11 cases and the outcome of the Chapter 11 cases in general, the length of time the Company will operate under the Chapter 11 cases, risks associated with any third-party motions in the Chapter 11 cases, the potential adverse effects of the Chapter 11 cases on the Company’s proposed Chapter 11 Liquidation Plan and increased legal and other professional costs necessary to execute the Company’s Chapter 11 Liquidation Plan if approved; the conditions to which the Company’s cash collateral is subject and the risk that these conditions may not be satisfied for various reasons, including for reasons outside of the Company’s control; the consequences of the acceleration of the Company’s debt obligations and the trading price and volatility of the Company’s common stock, and the risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Quarterly Report on Form 10-Q for the third quarter ended September 30, 2023 and Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and other documents filed by the Company from time to time with the United States Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements other than as required by applicable law.

 

Investor Relations

IR@harborcustomdev.com

866-744-0974

 

 

v3.24.0.1

Cover	Feb. 15, 2024
Cover [Abstract]
Document Type	8-K
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Document Period End Date	Feb. 15, 2024
Entity File Number	001-39266
Entity Registrant Name	Harbor Custom Development, Inc.
Entity Central Index Key	0001784567
Entity Tax Identification Number	46-4827436
Entity Incorporation, State or Country Code	WA
Entity Address, Address Line One	1201 Pacific Avenue
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Tacoma
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98402
City Area Code	253
Local Phone Number	649-0636
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

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