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.
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