Form 8-K New York REIT, Inc. For: Aug 17

 

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): August 17, 2016

 

New York REIT, Inc.
(Exact Name of Registrant as Specified in Charter)

 

Maryland		001-36416		27-1065431
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

405 Park Avenue, 14^th Floor
New York, New York 10022
(Address, including zip code, of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (212) 415-6500

 

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:

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

  

Item 1.01.

Entry into a Material Definitive Agreement.

 

Amendment to Credit Facility

 

On August 17, 2016, New York REIT, Inc. (the “Company”) and New York Recovery Operating Partnership, L.P. (the “Operating Partnership”) entered into the Second Amendment (the “Amendment”) to the Second Amended and Restated Credit Agreement, dated April 14, 2014 by and among the Company, the Operating Partnership, Capital One, National Association, as administrative agent, and the other lenders party thereto (as amended, the “Credit Facility”).

 

The Amendment modified a representation in the Credit Facility in order to permit contemplation of a liquidation and permit the Company to adopt a plan of liquidation if the Company so desired.

 

The foregoing description of the Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amendment, a copy of which is filed as Exhibit 10.1 hereto. 

 

Item 8.01.

Other Events.

 

Plan of Liquidation

 

On August 21, 2016, the Board of Directors of the Company approved a Plan of Liquidation (the “Plan”) to sell all or substantially all of the assets of the Company and the Operating Partnership and to liquidate and dissolve the Company and the Operating Partnership. Implementation of the Plan is contingent upon stockholder approval. The approval by the Board of Directors of the Plan was by a vote of five directors voting for and one director voting against.

 

Press Release

 

On August 22, 2016, the Company issued a press release with respect to the Amendment and the Plan, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference herein.

 

Forward-Looking Statements

 

The statements in this Current Report on Form 8-K that are not historical facts may be forward-looking statements. These forward-looking statements involve substantial risks and uncertainties. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements the Company makes. Forward-looking statements may include, but are not limited to, statements regarding stockholder liquidity and investment value and returns.

 

The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that might cause such differences include, but are not limited to, the factors included in the Company’s reports filed with the Securities and Exchange Commission ("SEC"), particularly in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 and in any other reports the Company files with the SEC, as such Risk Factors may be updated from time to time in subsequent reports. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits

 

Exhibit No.			Description
	10.1		Second Amendment to the Second Amended and Restated Credit Agreement, dated April 14, 2014 by and among New York Recovery Operating Partnership, L.P., as borrower, New York REIT, Inc. as the REIT and guarantor, the lenders party thereto and Capital One, National Association, as administrative agent.
	99.1		Press Release dated August 22, 2016.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: August 22, 2016		NEW YORK REIT, INC.
		By:		/s/ MICHAEL A. HAPPEL
				Michael A. Happel
				Chief Executive Officer and President

 

 

EXHIBIT 10.1

 

 

SECOND AMENDMENT

TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of August 17, 2016, is entered into by and among NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“Borrower”), New York REIT, Inc., a Maryland corporation (the “REIT”), CAPITAL ONE, NATIONAL ASSOCIATION, as administrative agent for the Lenders (as defined below) (in such capacity, the “Administrative Agent”), and each Lender that has executed this Amendment.

 

WHEREAS, Borrower, the REIT, the Administrative Agent, and certain lenders party thereto (each a “Lender” and collectively, the “Lenders”) entered into that certain Second Amended and Restated Credit Agreement, dated as of April 14, 2014 (as amended by that certain First Amendment to Second Amended and Restated Credit Agreement dated as of August 27, 2015 and as may be further amended, restated, consolidated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders made certain credit facilities available to Borrower;

 

WHEREAS, the parties hereto desire to, among other things, amend the Credit Agreement as provided herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1 Defined Terms. Unless otherwise defined in this Amendment, terms defined in the Credit Agreement shall have their defined meanings when used herein.

 

SECTION 2 Amendment of the Credit Agreement. Section 3.13 of the Credit Agreement is hereby amended and modified such that the last sentence thereof is deleted and replaced with the following:

 

“No Credit Party is contemplating either the filing of a petition by it under the Bankruptcy Code or any state insolvency laws or the liquidation of all or a major portion of its assets or property pursuant to a proceeding under the Bankruptcy Code or any state insolvency law, and no Credit Party has actual knowledge of any Person contemplating the filing of any such petition against it or any other Credit Party.”

 

SECTION 3 Other References. All references in the Loan Documents to the “Credit Agreement” shall be deemed to hereinafter refer to the Credit Agreement as amended by this Amendment.

 

 

SECTION 4 Representations and Warranties. In order to induce the Administrative Agent and the Required Lenders to execute this Amendment, each of the Borrower and the REIT hereby represent and warrant to the Administrative Agent and each of the Lenders that:

 

(a) no Default or Event of Default exists;

 

(b) the execution, delivery and performance by Borrower and the REIT of this Amendment have been duly authorized by all necessary organizational action, on the part of such Credit Party and do not require any consent or approval of, or notice to or action by, any Person (including any Governmental Authority);

 

(c) this Amendment and the other Loan Documents constitute the legal, valid and binding obligations of each Credit Party hereto or thereto, and are enforceable against each such Credit Party in accordance with their respective terms, except as such enforceability may be limited by (a) an applicable Insolvency Proceeding, (b) bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and (c) the application of general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law; and

 

(d) each of the representations and warranties made by each Credit Party in or pursuant to any Loan Document (i) that is qualified by materiality or “material adverse effect” or similar language is true and correct, and (ii) that is not qualified by materiality, is true and correct in all material respects, in each case, on and as of the date hereof, as if made on and as of such date, except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date.

 

SECTION 6 Reaffirmation of Loan Documents. Borrower and the REIT each hereby: (a) reaffirms, ratifies, confirms, and acknowledges its obligations under each Loan Document (as modified herein) to which it is a party, and agrees to continue to be bound thereby and perform thereunder; (b) agrees and acknowledges that all such Loan Documents (as modified herein) and all of such party’s obligations thereunder are and remain in full force and effect and, except as expressly provided herein, have not been modified; and (c) acknowledges and agrees that it has no defenses, offsets or counterclaims of any kind or nature whatsoever to its obligations under the Loan Documents (as modified herein).

 

SECTION 7 Miscellaneous.

 

(a) Credit Agreement Otherwise Not Affected; No Other Amendment or Modification. Except as expressly contemplated hereby, the Credit Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed in all respects. The Administrative Agent’s and the Required Lenders’ execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by the Administrative Agent or any such Lender to provide any other or further waivers or consents under the same or similar circumstances in the future. Nothing contained herein shall be deemed a waiver or consent in respect of (or otherwise affect the Administrative Agent’s or the Lenders’ ability to enforce) any Default or Event of Default not explicitly waived by Section 2 hereof.

 

 

(b) No Reliance. Each of the Borrower and the REIT hereby acknowledge and confirm to the Administrative Agent and the Lenders that it is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

 

(c) Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and to the benefit of their respective successors and assigns permitted by the terms of the Loan Documents. No third party beneficiaries are intended in connection with this Amendment.

 

(d) Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(e) Complete Agreement. This Amendment, together with the Credit Agreement and the other Loan Documents, contains the entire and exclusive agreement of the parties hereto with reference to the matters discussed herein and therein. This Amendment supersedes all prior drafts and communications with respect hereto and may not be amended except in accordance with the provisions of Section 10.18 of the Credit Agreement.

 

(f) Severability. Whenever possible, each provision of this Amendment shall be interpreted in such a manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Amendment shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Amendment, or the validity or effectiveness of such provision in any other jurisdiction.

 

(g) Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of this Amendment by PDF, facsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability and binding effect of this Amendment.

 

(h) Interpretation. This Amendment is the result of negotiations between and has been reviewed by respective counsel to the Borrower, the REIT, the Administrative Agent and the Required Lenders and is the product of all parties hereto. Accordingly, this Amendment shall not be construed against any party merely because of its involvement in the preparation hereof.

 

 

(i) Loan Document. This Amendment shall constitute a Loan Document.

 

(Remainder of page intentionally left blank; signature pages follow.)

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first above written.

 

BORROWER:

 

NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P.,

a Delaware limited partnership

 

	By:	New York REIT, Inc.,
		a Maryland corporation, its general partner
		By:	/s/ Michael Ead
			Name: Michael Ead
			Title: Authorized Signatory

 

 

 

 

	REIT:
	NEW YORK REIT, INC.,
	a Maryland corporation
	By:	/s/ Michael Ead
		Name: Michael Ead
		Title: Authorized Signatory

 

 

 

 

 

 

(Signatures continue on following pages.)

 

 

ADMINISTRATIVE AGENT:

 

CAPITAL ONE, NATIONAL ASSOCIATION,

as administrative agent

 

 

By: /s/ Ashish Tandon                                          

Name: Ashish Tandon

Title: Vice President

 

 

 

 

LENDER:

 

CAPITAL ONE, NATIONAL ASSOCIATION

 

 

 

By: /s/ Ashish Tandon                                      

Name: Ashish Tandon

Title: Vice President

 

 

 

(Signatures continue on following pages.)

 

 

Barclays Bank PLC:

 

 

 

 

 

By: /s/ Christopher Aitkin                                   

Name: Christopher Aitkin

Title: Assistant Vice President

 

 

LENDER:

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

 

 

By: /s/ Christian Lunt                                    

Name: Christian Lunt

Title: Executive Director

  

 

LENDER: KEYBANK, N.A.

 

 

 

 

 

By: /s/ Sara Jo Smith                                           

Name: SARA JO SMITH

Title: ASSISTANT VICE PRESIDENT

  

 

LENDER: Citizens Bank, N.A.

 

 

 

 

 

By: /s/ Donald Woods                                  

Name: Donald Woods

Title: Senior Vice President

 

 

LENDER:

 

SunTrust Bank

 

 

 

By: /s/ Kristopher Dickson                               

Name: Kristopher Dickson

Title: Senior Vice President

 

 

LENDER: U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By: /s/ Gordon Clough                                     

Name: Gordon Clough

Title: Senior Vice President

 

 

 

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

  

NEW YORK REIT ANNOUNCES PLAN OF LIQUIDATION AND DISSOLUTION

 

Net Proceeds to be Distributed to Stockholders

 

Amends Existing Credit Facility to Allow Proceeding with Liquidation

 

Stockholder Approval of Plan of Liquidation and Dissolution Required

 

NEW YORK, August 22, 2016 – New York REIT, Inc. (“NYRT”) (NYSE: NYRT), today announced that the Company’s Board of Directors (the “Board”) has determined, after considering other strategic alternatives available, that it is in the best interests of NYRT to adopt a plan of liquidation and dissolution that provides for the sale of the Company's assets and distribution of the net proceeds to the Company’s stockholders, after which the Company will be dissolved. NYRT also announced that the Company has amended its current credit facility to permit NYRT to adopt a plan of liquidation.

 

Accordingly, the Company's Board has approved a Plan of Complete Liquidation and Dissolution of the Company (the "Plan of Liquidation" or the “Plan”), which Plan must be approved by the Company’s stockholders. The Company intends to hold a special meeting of stockholders to seek approval of the Plan and expects to file preliminary proxy materials with the Securities and Exchange Commission in the near future. The Plan follows the Company’s previous announcement to commence asset sales. The Company’s credit facility originally included a restriction prohibiting the Company from contemplating a plan of liquidation, which has now been amended to delete this restriction.

 

The Plan of Liquidation outlines an orderly wind down of the Company's business and operations. If the Company's stockholders approve the Plan, the Company intends to attempt to convert all of its assets into cash, satisfy or resolve its remaining liabilities and obligations, including contingent liabilities and claims and costs associated with the liquidation of the Company, and then file articles of dissolution. Following stockholder approval of the Plan and the filing of articles of dissolution, which would not occur until the earlier of the completion of the asset sales or two years, then the Company would delist its common stock from the NYSE.

 

As the Company has previously announced, throughout the strategic process conducted by the Board, the Company engaged with a significant number of potential buyers who were interested in acquiring individual properties from the Company. The Company is re-engaging in discussions with parties that had indicated interest in individual assets of the Company as well as seek other qualified buyers, with the goal of entering into asset sale agreements under the proposed Plan of Liquidation.

 

 

Randolph C. Read, Chairman of the Board of NYRT, said, “This Plan of Liquidation is the next logical step in our previously announced plan to sell the assets of the Company and distribute the net proceeds to our stockholders. There are advantages in a formal plan of liquidation for completing the monetization of the Company’s assets, and that is why the Board has taken this action. Our stockholders have expressed their support for our plan to sell assets and this Plan of Liquidation will allow us to accomplish that task in the most efficient manner.”

 

Michael Happel, Chief Executive Officer and President of NYRT, said, “We believe that moving forward with a Plan of Liquidation and selling our assets in an orderly manner will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the Company should a compelling offer that delivers superior value be made.”

 

If at any time, including after the Plan of Liquidation is approved by stockholders, the Company receives an offer for a corporate transaction that, in the view of the Board of Directors, will provide superior value to our stockholders in comparison to the value of the estimated distributions under the Plan of Liquidation, taking into account all factors that could affect valuation, including timing and certainty of closing, credit market risks, proposed terms and other factors, the Plan of Liquidation could be abandoned in favor of such a transaction. As previously announced, the Company will release all entities (other than JBG) which remained subject to standstill agreements from those standstill obligations with the Company.

 

The Company will continue with its previously announced plans to refinance its credit facility in order to prepay its credit facility in full, to raise the capital it needs to exercise its option to acquire the 51.1% of Worldwide Plaza that the Company currently does not own, and to provide increased flexibility to pursue a Plan of Liquidation and distribute the net proceeds to stockholders (the “Refinancing Plan”). The Company extended the maturity date of its credit facility on August 20, 2016, as had been previously planned, in order to give NYRT adequate time to complete the Refinancing Plan, which is underway.

 

The Company, with input from Eastdil Secured, has estimated that, the net proceeds that will be distributed to stockholders over time from the Plan of Liquidation, including ordinary dividends and taking into account estimated transaction costs, will be between $8.73 and $11.50 per share. The estimate is subject to certain assumptions (which will be more fully described in the Company’s proxy statement to be filed in the near future). Actual distributions could be less or more than this estimated range and the timing of the asset sales and distributions is uncertain.

 

The Board will continue to evaluate the Company’s monthly dividend on a month-by-month basis as it has done in the past.

 

The Plan of Liquidation was approved by NYRT's Board of Directors by a vote of five directors voting for and one director voting against. Additional details on the Plan of Liquidation are contained in NYRT’s Current Report on Form 8-K dated August 22, 2016.

 

About NYRT

 

NYRT is a publicly traded real estate investment trust listed on the NYSE that owns income-producing commercial real estate, including office and retail properties, located in New York City. Additional information about NYRT can be found on its website at www.nyrt.com. NYRT may disseminate important information regarding it and its operations, including financial information, through social media platforms such as Twitter, Facebook and LinkedIn.

 

 

Forward-Looking Statements

The statements in this press release that are not historical facts may be forward-looking statements. These forward looking statements involve substantial risks and uncertainties. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements NYRT makes. Forward-looking statements may include, but are not limited to, statements regarding stockholder liquidity and investment value and returns.

 

The words "anticipates," "believes," "expects," "estimates," "projects," "plans," "intends," "may," "will," "would," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that might cause such differences include, but are not limited to: the impact of current and future regulation; the impact of credit rating changes; the effects of competition; the ability to attract, develop and retain executives and other qualified employees; changes in general economic or market conditions; the Company’s ability to complete asset sales, refinance its credit facility on favorable terms, if at all, and realize the results of its plan of liquidation; the timing of and the amount of proceeds of asset sales; and other factors, many of which are beyond NYRT's control, including other factors included in NYRT's reports filed with the SEC, particularly in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of NYRT's latest Annual Report on Form 10-K for year ended December 31, 2015, filed with the SEC on February 26, 2016, the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 9, 2016, and the Current Report on Form 8-K dated August 22, 2016, as such Risk Factors may be updated from time to time in subsequent reports. NYRT does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

Contacts
Michael A. Happel	Jonathan Keehner	Matthew Furbish
CEO and President	Mahmoud Siddig	Director, Investor Relations & Public Relations
New York REIT, Inc.	Joele Frank, Wilkinson Brimmer Katcher	New York REIT, Inc.
[email protected]	[email protected]	(212) 415-6500
(212) 415-6500	[email protected]
	(212) 355-4449

  

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