The Company has previously disclosed its initiative to significantly de-lever its balance
sheet in the near-term to maintain sufficient access to the loan and capital markets on commercially acceptable terms to finance its business, and is devoting substantial time and resources to address this pressing need. The Company has engaged
Weil, Gotshal & Manges LLP and Houlihan Lokey as its legal and investment banking debt restructuring advisors, respectively. To support its legal and investment banking debt restructuring advisors in its debt restructuring initiative and
assist with operational initiatives, the Company has also recently engaged Alvarez & Marsal North America, LLC as its financial debt restructuring advisor.
The Company and its debt restructuring advisors have commenced discussions with the financial and legal advisors to certain organized ad hoc groups of holders
of the Companys indebtedness under the Companys Amended and Restated Credit Agreement, dated as of December 19, 2013, and the Companys 7.875% Senior Notes due 2021, including discussions regarding the default under such
financings arising as a result of the Restatement and potential strategies and options for a viable near-term, comprehensive de-leveraging transaction. Advisors to these two groups of creditors have begun a diligence process and, in connection
therewith, have requested information from the Company regarding our operational and strategic goals, our internal business plans, our liquidity projections, developing conditions in the terms of our financing arrangements as they are amended, the
recent performance of our originations segment and other matters.
If the Company is unable to effectuate a satisfactory debt restructuring, the Company
expects that it will experience continuing adverse pressures on its relationships with counterparties who are critical to its business, its ability to access the capital markets, its ability to execute on its operational and strategic goals and its
business, prospects, results of operations and liquidity generally. There can be no assurance as to when or whether the Company will implement any action as a result of its debt restructuring initiative, whether the implementation of one or more
such actions will be successful, or the effects the failure to take action may have on the Companys business, its ability to achieve its operational and strategic goals or its ability to finance its business or refinance its indebtedness. The
failure to address our level of corporate leverage in the near-term may have a material adverse effect on the Companys business, prospects, results of operations, liquidity and financial condition, and its ability to service or refinance its
corporate debt as it becomes due in future years.
Cautionary Statements Regarding Forward-Looking Information
This Current Report on Form 8-K includes forward-looking statements within the meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Certain of these forward-looking statements can be identified by the use of words such as believes, expects, intends, plans, estimates,
assumes, may, should, will, seeks, targets, or other similar expressions. Such statements may include, but are not limited to, statements about the adjustments to the
Companys valuation allowance for the deferred tax asset balances, future financial and operating results, any need to restate financial statements and related matters, the Companys plans, objectives, expectations and intentions and other
statements that are not historical facts.
Forward-looking statements are subject to significant known and unknown risks, uncertainties and other
important factors, and our actual results, performance or achievements could differ materially from future
results, performance or achievements expressed in these forward-looking statements. These forward-looking statements are based on the Companys current beliefs, intentions and expectations
and are not guarantees or indicative of future performance, nor should any conclusions be drawn or assumptions be made as to the potential outcome of any strategic initiatives we pursue. Risks and uncertainties relating to the Restatement due to the
error in the valuation allowance for deferred tax assets include: the timing of and definitive findings regarding the Companys assessment of the error in its valuation allowance, including the expected materiality of the adjustments; whether
any additional accounting errors or other issues are identified; reactions from the Companys creditors, stockholders, or business partners; potential delays in the preparation of restated financial statements; our ability to remediate control
deficiencies and material weaknesses, and the timing and expense of such remediation; our ability to successfully negotiate and obtain any necessary waivers, amendments and / or forbearances (including any extensions of the foregoing) to credit and
financing arrangements and the impact on our business should we fail to obtain such waivers, amendments and / or forbearances; and the impact and result of any litigation or regulatory inquiries or investigations related to the findings of the
Companys assessment or the Companys Restatement. Risks and uncertainties relating to the Companys debt restructuring initiative include: the partial or incomplete implementation of the proposed debt restructuring initiative;
uncertainties around the timing of the proposed debt restructuring initiative; and the effects of disruption from the proposed debt restructuring initiative making it more difficult to maintain business, financing and operational relationships.
Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties described above and in more detail
under the heading Risk Factors in the Companys annual and quarterly reports filed with the SEC.
The above factors, risks and
uncertainties are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond the Companys control. New factors, risks and uncertainties emerge from time to time, and it is not possible for
management to predict all such factors, risks and uncertainties. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore
any of these statements included herein may prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by
the Company or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. The Company makes no commitment to revise or update any forward-looking statements in order to reflect events
or circumstances after the date any such statement is made, except as otherwise required under the federal securities laws. If the Company were in any particular instance to update or correct a forward-looking statement, investors and others should
not conclude that the Company would make additional updates or corrections thereafter except as otherwise required under the federal securities laws.