UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act Of 1934
Date of Report (Date of earliest event reported): November 12, 2009 (November 10, 2009)
Comstock Homebuilding Companies, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 1-32375 | 20-1164345 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
11465 SUNSET HILLS ROAD, FIFTH FLOOR
RESTON, VIRGINIA 20910
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (703) 883-1700
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( See General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01. | Entry into Material Definitive Agreement. |
On November 10, 2009, Comstock Homes of Raleigh, LLC (the “Borrower”) and Comstock Homebuilding Companies, Inc. (the “Company”) entered into a Forbearance and Conditional Release Agreement (the “Agreement”) with Fifth Third Bank, an Ohio banking corporation (the “Lender”) with respect to the $1.3 million outstanding principal under the Borrower’s secured Brookfield project loan (the “Loan”). Under the terms of the Agreement, Lender has released the Borrower from its obligations relating to the Loan contemporaneous with the execution by the Borrower of statutory foreclosure waivers allowing for the expeditious foreclosure of the single family building lots secured by the Loan (the “Collateral”). If Lender successfully forecloses on the Collateral on or before February 28, 2010, subject to extension, Lender shall receive a non-interest bearing unsecured deficiency note in the amount of $25,000 with a three year term (the “Deficiency Note”) from the Company. The Deficiency Note shall be fully subordinate to the repayment of the secured lenders of the Company’s subsidiaries. Should Lender fail to foreclose on the Collateral on or before February 28, 2010, subject to extension, the Company shall not be required to deliver the Deficiency Note but the release issued by Lender will nevertheless remain effective upon its eventual foreclosure of the Collateral.
On November 11, 2009, the Company issued a press release announcing the Modification. A copy of this press release is attached hereto as Exhibit 99.1.
| Item 9.01. | Financial Statement and Exhibits. |
| (d) | Exhibits |
| Exhibit Number |
Description | |
| 99.1 | Press Release by Comstock Homebuilding Companies, Inc. dated November 11, 2009. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 12, 2009
| COMSTOCK HOMEBUILDING COMPANIES, INC. | ||
| By: | /S/ CHRISTOPHER CLEMENTE | |
| Christopher Clemente, Chief Executive Officer | ||
Exhibit 99.1
NEWS RELEASE
Comstock Homebuilding Enters Agreement with Fifth Third Bank, Eliminating $1.3 Million of Debt on Raleigh, NC Project
RESTON, VA, Nov 11, 2009 (MARKETWIRE via COMTEX) — Comstock Homebuilding Companies, Inc. (“Comstock Homebuilding”) (Nasdaq: CHCI) today announced that its subsidiary, Comstock Homes of Raleigh ( “Comstock of Raleigh”) had entered into an agreement with Fifth Third Bank (“Fifth Third”) to eliminate approximately $1.3 million of secured debt related to Comstock of Raleigh’s Brookfield project located in Raleigh, N.C. The subject debt is non-recourse to Comstock Homebuilding. Under the terms of the agreement, Fifth Third agreed to release Comstock of Raleigh and its affiliates from its obligations and guarantees relating to the project loan and Comstock of Raleigh agreed to cooperate with Fifth Third with respect to a foreclosure on a portion of the Brookfield project. As an incentive to Fifth Third to expedite the foreclosure Comstock Homebuilding agreed to enter into a non-interest bearing unsecured promissory note in the amount of $25,000 with a three year term (the “Note”) provided Fifth Third successfully completes the foreclosure on or before February 28, 2010, unless extended as provided for in the agreement (the “Deadline”). Should Fifth Third fail to complete the foreclosure on or before the Deadline, Comstock Homebuilding shall not be required to provide the Note but the release issued by Fifth Third will nevertheless remain effective.
“The agreement reached with Fifth Third Bank represents another step forward for Comstock Homebuilding as we seek to complete our effort to stabilize Comstock and position our company for profitability in 2010.” said Christopher Clemente, Comstock’s Chairman and Chief Executive Officer. “Although this loan was non-recourse to Comstock Homebuilding, resolving this matter helps ensure that we will be able to focus our energy on productive initiatives in the coming year.”
About Comstock Homebuilding Companies, Inc.
Established in 1985, Comstock Homebuilding Companies, Inc. is a publicly traded, diversified real estate development firm with a focus on a variety of for-sale residential products. The company currently actively markets its products under the Comstock Homes brand in the Washington, D.C. and Raleigh, N.C. metropolitan areas. Comstock Homebuilding Companies, Inc. trades on NASDAQ under the symbol CHCI. For more information on the Company or it projects please visit www.comstockhomebuilding.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains “forward-looking” statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements. Additional information concerning these and other important risks and uncertainties can be found under the heading “Risk Factors” in the
Company’s most recent Form 10-K, as filed with the Securities and Exchange Commission on March 31, 2009. Comstock specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Contact:
Jeff Dauer
703.883.1700
SOURCE: Comstock Homebuilding Companies, Inc.