Item 7.01. Regulation FD Disclosure.
As previously disclosed, on August 30, 2019, RAIT Financial Trust ("RAIT") and
its affiliates RAIT Funding LLC, RAIT General, Inc. ("RAIT General"), RAIT
Limited, Inc. ("RAIT Limited"), Taberna Realty Finance Trust ("TRFT"), RAIT JV
TRS, LLC, and RAIT JV TRS Sub, LLC (each, a "Debtor", and together, the
"Debtors") filed voluntary bankruptcy cases (the "Chapter 11 Cases")
under chapter 11, Title 11 of the U.S. Code in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court"). Furthermore, as
previously disclosed, immediately prior to the filing of the Chapter 11 Cases,
on August 30, 2019, RAIT, RAIT General, RAIT Limited and TRFT (together, the
"Sellers"), entered into an Equity and Asset Purchase Agreement (as amended, the
"Purchase Agreement") with CF RFP Holdings LLC, a Delaware limited liability
company and an entity owned by funds managed by affiliates of Fortress
Investment Group LLC ("Buyer"), pursuant to which, among other things, Buyer
agreed to purchase certain subsidiaries and assets of the Sellers (together, the
"Purchased Assets").
On December 6, 2019, the United States Bankruptcy Court entered an order (the
"Sale Order") pursuant to which, among other things, the Bankruptcy Court
(i) authorized and approved the Purchase Agreement, (ii) approved the sale of
the Purchased Assets pursuant to the Purchase Agreement, (iii) authorized the
Debtors to consummate the transactions related to the Purchase Agreement, and
(iv) granted related relief.
The Chapter 11 Cases are jointly administered under the caption In re: RAIT
Funding, LLC, a Delaware limited liability company, et. al. The Sale Order,
court filings and other information related to the Chapter 11 Cases are
available at a website administered by the Debtors' noticing and claims agent,
Epiq Corporate Restructuring, LLC, at https://dm.epiq11.com/rait, or
www.deb.uscourts,gov, the official Bankruptcy Court website. The information set
forth in these websites is not incorporated into this Item 7.01.
The Sale Order, attached hereto as Exhibit 99.1, is being furnished to the
Securities and Exchange Commission (the "Commission") under Item 7.01 of Form
8-K and shall not be deemed "filed" for any purpose.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K may contain certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act of 1934, as amended. These statements are often,
but not always, made through the use of words or phrases such as "anticipates,"
"believes," "can," "could," "may," "potential," "should," "will," "plans,"
"continuing," "ongoing," "expects," "intends to," and similar words or
phrases. Although RAIT believes that the expectations reflected in these
forward-looking statements are reasonable, these statements are not guarantees
of future performance and involve risks and uncertainties that are subject to
change based on various important factors, some of which are beyond our control.
Such forward-looking statements include, but are not limited to, statements
related to (a) the transactions contemplated by the Purchase Agreement, and
(b) the ability of the Debtors to operate as a "debtor in possession" under the
jurisdiction of the Bankruptcy Court. These risks, uncertainties and
contingencies include, but are not limited to, (i) whether the closing
conditions of the Purchase Agreement will be satisfied or waived and whether the
transactions contemplated thereby will be completed as provided therein,
(ii) whether RAIT or its affiliates will be able to obtain approval with respect
to motions in the Chapter 11 Cases and the Bankruptcy Court's rulings in the
Chapter 11 Cases and the outcome of the Chapter 11 Cases in general; (iii) the
length of time the Debtors will operate under the Chapter 11 Cases; (iv) risks
associated with third-party motions in the Chapter 11 Cases, which may interfere
with RAIT and its affiliates' ability to develop and consummate the sale of the
Purchased Assets; (v) the potential adverse effects of the Chapter 11 Cases on
the Debtors' liquidity, results of operations or business prospects;
(vi) increased legal, advisor and other costs related to the Chapter 11 Cases
and other litigation and the inherent risks involved in a bankruptcy process;
and (vii) the effect of the Chapter 11 Cases on the trading price and value of
RAIT securities. For additional discussion of these risks, refer to the section
entitled "Risk Factors" and elsewhere in RAIT's Annual Report on Form 10-K for
the year ended December 31, 2018, filed with the Commission on March 26, 2019,
Amendment No. 1 to RAIT's Annual Report on Form 10-K/A for the year ended
December 31, 2018, filed with the Commission on April 30, 2019, RAIT's Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2019, filed with
the Commission on November 7, 2019 and RAIT's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2019, filed with the Commission on
November 7, 2019. In light of the significant uncertainties inherent in any
forward-looking information included herein, the inclusion of such information
should not be regarded as a representation by RAIT or any other person that
RAIT's expectations, objectives or plans will be achieved in the timeframe
anticipated or at all. RAIT undertakes no obligation to update these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events, except as may be
required by law. All forward-looking statements attributable to RAIT are
expressly qualified by these cautionary statements.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is included as part of this report:
Exhibit
No. Description
99.1 Order (I) authorizing and approving Equity and Asset Purchase
Agreement; (II) approving sale of substantially all of the Debtors'
assets free and clear of all liens, claims, interests, and
encumbrances; (III) authorizing the Debtors to consummate transactions
related to the above; and (IV) granting related relief, entered on
December 6, 2019 by the United States Bankruptcy Court for the
District of Delaware.
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