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HFDC is out of Chapter 11 and back in the game.
In 1992, the Company filed for bankruptcy protection under Chapter 11 of
the United States Bankruptcy Code. The Company emerged from bankruptcy in
1995 pursuant to a plan of reorganization (the "Plan"). Leucadia Financial
Corporation ("LFC"), an indirect wholly-owned subsidiary of Leucadia
National Corporation ("Leucadia"), principally funded the Plan by
purchasing a $20,000,000 principal amount, 12% secured convertible note due
2003 (the "Convertible Note") and 2,700,000 shares of newly issued common
stock, par value $.01 per share ("Common Stock") of the Company. In
addition, LFC received 1,417,986 shares of Common Stock of the Company
under the Plan. These shares, together with the shares LFC purchased,
constituted 41.2% of the issued and outstanding Common Stock of the Company
following the bankruptcy.
In August 1998, in connection with the stock purchase agreements and
development management agreement referred to below, the Company and LFC
entered into an Amended and Restated Loan Agreement, pursuant to which the
Company and LFC restructured the outstanding Convertible Note held by LFC.
The Restructured Note has a principal amount of approximately $26,500,000
(reflecting the original $20,000,000 principal balance of the Convertible
Note, together with additions to principal resulting from accrued and
unpaid interest thereon to the date of the restructuring, as permitted
under the terms of the Convertible Note), extends the maturity date from
July 3, 2003 to December 31, 2004, reduces the interest rate from 12% to 6%
and eliminates the convertibility feature of the Convertible Note. Interest
only on the Restructured Note is paid quarterly and all unpaid principal is
due on the maturity date. During the nine-month period ended September 30,
1999, interest of approximately $1,188,000 was paid to LFC. As a result of
the restructuring of the Convertible Note, the Restructured Note was
recorded at fair value and the approximately $7,015,000 difference between
such amount and the carrying value of the Convertible Note was reflected as
additional paid-in capital. The $7,015,000 difference between the fair
value of the Restructured Note and the carrying value of the Convertible
Note will be amortized as interest expense over the term of the
Restructured Note using the interest method. Approximately $601,000 was
amortized as interest expense during the nine-month period ended September
30, 1999.
In August and October 1998, in connection with the execution of the
development management agreement for San Elijo Hills (the "Development
Agreement") and the restructuring of the Convertible Note, Leucadia entered
into two agreements to purchase, on or after July 5, 1999, 46,557,826
shares of Common Stock for aggregate consideration of $8,380,000. In 1998,
Leucadia irrevocably transferred all of the Common Stock that is
beneficially owned, together with these stock purchase agreements, to a
trust (the "Leucadia Trust") formed for the benefit of Leucadia
shareholders of record as of August 25, 1998 (the "Trust Beneficiaries").
On July 8, 1999, the Company received approximately $1,670,000 from the
Leucadia Trust as final payment of the stock purchase agreements and the
Company issued 46,557,826 shares of HomeFed Common Stock to the Leucadia
Trust. Upon consummation of
the purchases under these stock purchase agreements, the Leucadia Trust
beneficially owned 89.6% of all the issued and outstanding Common Stock of
the Company. In October 1999, the Leucadia Trust distributed all of the
Company's Common Stock that it owned to the Trust Beneficiaries and the
Leucadia Trust was subsequently dissolved
sanelijohills.com
San Elijo Hills (http://www.sanelijohills.com)
was acquired in 1994
by a subsidiary of Leucadia National
Corporation (NYSE-LUK) and is
managed by San Diego-based
HomeFed Corporation.
Leucadia has developed a number of
real estate projects including
Renaissance Plaza, a recently
completed office tower and hotel in
New York, Rosemary Beach, a resort
community in Florida and The Harbor
Club, 201 luxury condominiums in
downtown San Diego as well as
4,800 acres in Otay Ranch.
The project development team
includes land development and
marketing professionals with
experience in a number of Southern
California real estate projects. |
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