Tarragon Announces Chapter 11 Filing
12 Janvier 2009 - 3:00PM
PR Newswire (US)
Company Plans Reorganization and Will Seek Outside Financing and
Investors NEW YORK, Jan. 12 /PRNewswire-FirstCall/ -- Tarragon
Corporation (NASDAQ: TARR), a residential real estate developer and
a multifamily investor, announced today that it and certain of its
subsidiaries have filed voluntary Petitions for Relief under
Chapter 11 of the United States Bankruptcy Code in the District of
New Jersey. The goal of the filing is to implement a comprehensive
reorganization, as part of which Tarragon will seek to obtain
additional outside financing and participation of a new investor or
investor group. This step follows a period of financial losses
brought about by falling prices and slower sales in Tarragon's
Homebuilding Division, restrictions on the availability of
financing and declining real estate values. With adequate current
liquidity and a commitment for debtor-in-possession financing from
an affiliate of ARKO Holdings, Inc. (an Israeli public company),
the Chapter 11 filing is expected to have no impact on the
day-to-day operations of the Company's award winning property
management subsidiary, Tarragon Management, Inc., or on the
operation of the rental apartment properties in Tarragon's
Investment Division. "In the face of the challenging real estate
sector and tight credit markets, Tarragon has made the strategic
decision to restructure with the goal of putting the Company's
business on a solid financial footing going forward," said William
S. Friedman, Chief Executive Officer of Tarragon. "Based on the
discussions we have had with our unsecured note holders and the
financial support of ARKO, we expect that we will be able to
structure a consensual plan with our creditors structured to enable
Tarragon to preserve the value of its property management and
development platforms and maximize any return to creditors," added
Mr. Friedman. It is not expected that there will be any
distribution to Tarragon equity holders in conjunction with the
bankruptcy cases. As previously disclosed, the Tarragon board of
directors is being advised by Lazard in connection with the board's
evaluation of alternatives that may be available to Tarragon to
maximize stakeholder value. The Tarragon board will continue to
pursue all available alternatives, which may include all available
forms and sources of financing, property sales or other strategic
transactions, in connection with the implementation of an overall
financial restructuring plan inside the Chapter 11 proceeding.
About Tarragon Corporation Tarragon Corporation is a leading
developer of multifamily housing for rent and for sale. Tarragon's
operations are concentrated in the Northeast, Florida, Texas and
Tennessee. Forward-Looking Statements Information in this press
release includes "forward-looking statements" made pursuant of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 that are based on management's expectations, estimates,
projections and assumptions. Words such as "expects,"
"anticipates," "intends," "estimates" and variations of these words
and similar expressions are intended to identify forward-looking
statements, which include but are not limited to statements
regarding current trends in the markets in which Tarragon operates
and the anticipated benefits of the Chapter 11 filing for Tarragon
and its creditors. Actual results and the timing of certain events
could differ materially from those projected or contemplated by the
forward-looking statements due to a number of factors, including,
but not limited to: conditions in the homebuilding industry and
residential real estate and mortgage markets; the ability of
Tarragon to develop, confirm and consummate one or more plans of
reorganization with respect to the Chapter 11 proceeding; the
ability of Tarragon to arrange, and operate pursuant to the terms
of, any debtor-in- possession facility; the negotiating positions
of various constituencies and the results of negotiations regarding
restructuring plans; the risk that the reorganization will not
become effective in a timely manner or on terms favorable to the
reorganized company; risks associated with third parties seeking
and obtaining court approval to terminate or shorten the
exclusivity period for Tarragon to propose and confirm one or more
plans of reorganization or pursuing related actions in connection
with such a proceeding; conditions in the capital and financial
markets generally; and general economic conditions, interest rates
and other risk factors outlined in Tarragon's SEC reports,
including its Annual Report on Form 10-K for the year ended
December 31, 2007 and more recent Quarterly Reports on Form 10-Q.
DATASOURCE: Tarragon Corporation CONTACT: Media: Susan Kenney, MWW
Group, +1-201-964-2392, ; or Investors: Scott Eckstein, Financial
Relations Board, +1-212-827-3766,
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