Regency Free to Pursue Monetization of Security Land Asset
JENSEN BEACH, Fla., April 22 /PRNewswire/ -- Regency Affiliates, Inc. (OTC Bulletin Board: RAFI) announced today that the Court in the action entitled Gatz et al. v. Ponsoldt, Sr., et al. pending in the Federal District Court for the District of Nebraska, in which Regency is a defendant, denied plaintiffs' motion for a temporary restraining order with respect to a proposed loan to Security Land and Development Company Limited Partnership and held in abeyance plaintiffs' motion for a preliminary injunction with respect to Regency's use of proceeds of such loan. Regency is a limited partner in Security Land, a Maryland limited partnership that owns a two story office building and connected six story tower that is leased to the General Services Administration of the United States Government through October 2018 and occupied by the Social Security Administration of the United States Government. Regency is also a limited partner in 1500 Woodlawn Limited Partnership, the general partner of Security Land. Under the terms of the Eighth Amendment to the Security Land partnership agreement, the net proceeds of a "qualified financing" to Security Land would be distributed to Regency and the non-Regency partners on a 50/50 basis, provided that such allocation would result in a minimum distribution to Regency of $39,000,000 (a "qualified financing"). The amendment also provides that, following a qualified financing, Regency will be entitled to (i) 95% of Security Land's distributions of cash flow until it has received $2,000,000 of such distributions, and thereafter 50% of such distributions, (ii) once it has received $2,000,000 of cash flow distributions, a $180,000 annual management fee and (iii) a 50% interest in all other distributions from Security Land. The foregoing percentages are inclusive of Regency's interest as a limited partner in 1500 Woodlawn. The Eighth Amendment, which is being held in escrow pending consummation of a qualified financing, will not become effective if a qualified financing is not consummated on or prior to August 5, 2003. While there can be no assurance that a qualified financing will be consummated, the general partner of Security Land has informed Regency that it is negotiating the terms of a new loan for the Partnership that would constitute a qualified financing, and that it intends to consummate the qualified financing as soon as possible. The plaintiffs in the Nebraska action sought a temporary restraining order and preliminary injunction with respect to the proposed qualified financing and Regency's use of the proceeds of the qualified financing following notice that the general partner of Security Land intended to consummate the qualified financing as soon as possible. Regency understands that the plaintiffs intend to proceed with their motion for a preliminary injunction seeking to enjoin Regency from paying certain accrued obligations to Regency's prior and current management and Regency's prior and current controlling shareholders. Plaintiffs were granted permission by the Court to conduct certain depositions within the next 45 days in connection with their continuing pursuit of a preliminary injunction, after which the Court would determine whether to schedule a hearing. Regency intends to oppose any effort by plaintiffs to interfere with Regency's use of proceeds of the proposed qualified financing. CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements in this press release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements contained herein which are not statements of historical facts and that address activities, events or developments that Regency or its management expects, believes or anticipates will or may occur in the future shall be deemed to be forward-looking statements. Forward- looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not be anticipated. Future events, actual results of performance, financial or otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Regency undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this press release does not constitute an admission by Regency or any other person that the events or circumstances described in such statement are material.
SOURCE Regency Affiliates, Inc.
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