ITEM 1.01 Entry into a Material Definitive Agreement
The information set forth under Item 8.01 of this Current Report on Form 8-K is
incorporated into this Item 1.01 by reference.
ITEM 7.01 Regulation FD Disclosure
In January 2020, CBL & Associates Properties. Inc. (the "REIT") and its majority
owned subsidiary CBL & Associates Limited Partnership (the "Operating
Partnership", and together with CBL & Associates Properties, Inc., the
"Company") engaged Weil, Gotshal & Manges LLP and Moelis & Company LLC (the
"Advisors") to assist the Company in exploring several alternatives to reduce
overall leverage and interest expense and to extend the maturity of its debt,
among other things. The Company's Advisors began discussions in May 2020 with
advisors to certain holders of its senior unsecured notes and the advisors to
certain lenders under the senior secured credit facility. As previously
disclosed, on August 18, 2020, the Company entered into the Restructuring
Support Agreement (the "RSA") with certain beneficial owners and/or investment
advisors or managers of discretionary funds, accounts or other entities for the
holders of beneficial owners (the "Consenting Noteholders") in excess of 60%,
including joining noteholders added pursuant to joinder agreements, of the
aggregate principal amount of the Operating Partnership's Notes (as defined
below).
As discussions with the advisors to the Consenting Noteholders and lenders under
the Company's secured credit facility continue, the Company has elected to not
make the $6.9 million interest payment (the "Interest Payment") due and payable
on October 15, 2020, with respect to the Operating Partnership's 4.60% senior
unsecured notes due 2024 (the "2024 Notes"). Under the indenture governing the
2024 Notes, the Operating Partnership has a 30-day grace period to make the
Interest Payment before the nonpayment is considered an "event of default" with
respect to the 2024 Notes. Any event of default under the 2024 Notes for
nonpayment of the Interest Payment would also be considered an event of default
under the Operating Partnership's senior secured credit facility which could
lead to an acceleration of amounts due under the facility, however, as
previously reported, on August 19, 2020, the Operating Partnership received a
notice of acceleration of obligations under the secured credit facility based on
the events of default previously asserted by the Administrative Agent under the
secured credit facility, which the Company continues to dispute. Further, if the
trustee for the 2024 Notes should exercise its right to accelerate the maturity
of the full balance owed on the 2024 Notes as a result of such an "event of
default," that would also constitute an "event of default" under the Operating
Partnership's 5.25% senior unsecured notes due 2023 (the "2023 Notes") and the
Operating Partnership's 5.95% senior unsecured notes due 2026 (the "2026 Notes,"
together with the 2023 Notes and 2024 Notes, the "Notes"), which could lead to
the acceleration of all amounts due under those notes.
As discussed below, the Company and the Required Consenting Noteholders (as
defined in the RSA) extended the RSA milestone date by which the Company is
required to commence the Chapter 11 Cases (as defined below) and the Company
elected to not make the Interest Payment and enter the 30-day grace period in
order to continue to engage in negotiations and discussions with the Consenting
Noteholders and lenders under their senior credit facilities.
The information disclosed in this Item 7.01 is being furnished and shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities
of that Section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act, regardless of
any general incorporation language in such a filing.
ITEM 8.01 Other Events
As previously disclosed, on August 18, 2020, the Company entered into the RSA
with the Consenting Noteholders. On September 26, 2020, in accordance with the
terms of the RSA, the Company and the Required Consenting Noteholders agreed to
extend the date by which the Company is required to commence cases (the "Chapter
11 Cases") pursuant to title 11 of the United States Code in the Bankruptcy
Court to implement the restructuring transactions as set forth in the terms of
the RSA, from October 1, 2020 to no later than October 15, 2020 (such date of
commencement, the "Petition Date"). Further, on October 14, 2020, in accordance
with the terms of the RSA, the Company and the Required Consenting Noteholders
agreed to extend the Petition Date, from October 15, 2020 to no later than
November 2, 2020. The Company issued a press release on October 14, 2020
announcing the Amendment to the RSA and nonpayment of the Interest Payment with
respect to the 2024 Notes, which is furnished as Exhibit 99.1 to this Current
Report.
Additionally, on October 14, 2020, the Board of Directors of CBL & Associates
Properties, Inc. (the "Board"), appointed a special committee (the "Special
Committee") of the Board consisting of two independent directors of the Board,
Carolyn B. Tiffany and Scott D. Vogel. The Special Committee is authorized to,
among other things, review, approve, and act upon any transactions for and on
behalf of the Company in which the General Counsel or outside counsel advises
that a conflict exists between the Company and its equity holders, its
affiliates, or its managers and officers in the context of a Chapter 11
restructuring case. In carrying out its responsibilities, the Special Committee
will coordinate and consult with the Board, management, and the Company's
professional advisors, as appropriate.
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ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
99.1 Press release issued October 14, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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