Given that the FINRA report suggests that Thompson is possibly insolvent and a Thompson bankruptcy would trigger a loan default and yield maintenance charges, the Company was at real risk of a recourse deficiency judgment of possibly $10 million to $12 million. The bankruptcy process could have taken many months and perhaps years, and meanwhile the Company would have been unable to operate in a normal fashion.
For further detail, please refer to the Company's Form 8-K filed with the SEC on August 7, 2013, which may be accessed directly or through the Company's website at www.srtreit.com
Key Bank Loan
Earlier this year the Company signed a forbearance agreement with Key Bank concerning certain defaults under the Company's line of credit. The original loan and the forbearance agreement prohibited dividends to shareholders while the loan was in default. The Company is attempting to sell two of the five properties that secure the loan and believes that if successful the loan balance will be reduced to a level such that a new loan can be put in place, which may allow the Company to remove any contractual limitations on dividends to shareholders.
Once the loan restrictions are lifted, the board will be able to review, each quarter, the appropriateness of a dividend. It is a goal of the Company to pay dividends assuming the board determines that the Company has sufficient means to do so. Even if the Company is successful in paying off or refinancing the Key Bank loan there is no assurance that dividends will be reinstated. For further detail, please refer to the Company's Form 8-K filed with the SEC on August 6, 2013, which may be accessed directly or through the Company's website at www.srtreit.com
TNP Strategic Realty Trust, Inc. is a non-traded real estate investment trust that owns a portfolio of primarily grocery-anchored shopping centers. The Company's portfolio consists of 19 shopping centers containing 1.9 million square feet anchored by such grocers as Publix, Safeway and Wal-Mart. For more information you may visit the company's website at www.srtreit.com
Forward Looking Statements:
This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "strive." "continue," or other similar words. Readers of this news release should be aware that there are various factors that could cause actual results to differ materially from any forward-looking statements made in this release. Factors that could cause or contribute to such differences include, but are not limited to, (i) difficulties in obtaining Company records from the Company's former advisor, former property manager and former transfer agent, (ii) difficulties in raising new capital on attractive terms or growing the Company's investment portfolio, (iii) adverse changes in the Company's portfolio, (iv) difficulties and delays with property dispositions, and (v) inability of the Company to list its shares at some future date. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
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