Comstock Homebuilding Companies, Inc. to Eliminate $5.3 Million of Debt With Regions Bank
September 04 2008 - 10:11AM
Marketwired
Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) and certain of
its subsidiaries (collectively "Comstock" or the "Company") today
announced that it had entered into a forbearance and conditional
release agreement ("Agreement") with Regions Bank ("Regions") with
respect to approximately $5.3 million of the Company's $144.0
million of secured debt as of June 30, 2008. Under the terms of the
Agreement, the Company agreed to cooperate with Regions with
respect to its foreclosure on certain of the Company's real estate
assets in Georgia and Regions agreed to provide the Company a full
release from its obligations with no deficiency liability
post-foreclosure. The foreclosure agreement covers three properties
in Atlanta, Georgia.
"The agreement we entered into with Regions today is the result
of our continued focus on restructuring a significant portion of
our debt and positioning Comstock to survive the current downturn
in housing," said Christopher Clemente, Comstock's Chairman and
Chief Executive Officer. "We are satisfied with the outcome of our
negotiation with Regions and believe it is another important step
in our plan to reposition our company to meet the challenges of the
current market. While we have more work to do in this regard with
certain other lenders, the Regions agreement, along with the
recently announced similar agreement with BB&T, are in keeping
with our objective. We remain optimistic regarding the potential
for a positive outcome of our restructuring efforts."
Under the terms of the agreement the Company will be formally
released from its obligations to Regions at the earlier of December
15, 2008 or the successful foreclosure by Regions on lots and/or
speculative homes at Post Road II, Highland Station and James Road.
The Company announced that in anticipation of this agreement it had
recorded impairment charges related to the Regions collateral in
the quarter ending June 30, 2008 and as a result the Company does
not anticipate any material future write-offs as a result of the
Agreement or the foreclosures.
About Comstock Homebuilding Companies, Inc.
Established in 1985, Comstock Homebuilding Companies, Inc. is a
publically traded, diversified real estate development firm with a
focus on affordably priced for-sale residential products. Comstock
builds and markets single-family homes, townhouses, mid-rise
condominiums, high-rise condominiums, mixed-use urban communities
and active adult communities. The company currently markets its
products under the Comstock Homes brand in the Washington, D.C.;
Raleigh, North Carolina; and Atlanta, Georgia 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 24, 2008. 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: Bruce Labovitz Email Contact 703.230.1131
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