| Item 1.01. | Entry into a Material Definitive Agreement On April 4, 2012, a mortgage foreclosure action was filed in the Court of First Instance, San Juan Superior Part, in the Commonwealth of Puerto Rico to foreclose on Presidential Realty Corporation’s (the “Company” or “Presidential”) Hato Rey property. The Company’s wholly owned subsidiary, PDL, Inc., is the general partner of PDL, Inc. & Associates, Limited Co-partnership, the owner of the property, and the Company’s wholly owned subsidiary, Presidential Matmor Corporation., is a limited partner of the partnership. The action also sought judgments against PDL, Inc., the Company, Lester Cohen and F.D. Rich Company of Puerto Rico, Inc. under the terms of certain guarantees issued by them in connection with the mortgage loans, for alleged physical waste to the property and, the costs of certain repairs to the property of not less than $1,100,000 and the reasonable legal costs and expenses in connection with the enforcement of the loan documents. As previously reported, on September 23, 2013, U.S. Bank National Association, as trustee, as successor-in-interest to Bank of America, National Association, as trustee for the Registered Holders of GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 1998-C1, acting by and through Berkadia Commercial Mortgage LLC in its capacity as special servicer pursuant to the pooling and servicing agreement dated October 11, 1998 took possession of the Hato Rey property pursuant to a foreclosure judgment and subsequently sold the property. On December 18, 2013, GS II SERIES 1998 C-1 HOME MORTGAGE PLAZA HATO REY LLC, (hereinafter “GS II”), a Delaware corporation, represented herein by U.S. Bank National Association, as Successor Trustee, successor-in-interest to Bank of America, N.A. (successor-by-merger to LaSalle National Bank Association, f/k/a LaSalle National Bank), as Trustee for the Registered Certificateholders of GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 1998-C1, its Sole Member, represented in turn by Key Bank National Association, and Presidential Realty Corporation, entered into a Settlement and Release Agreement. Pursuant to the Settlement Agreement, GS II, the owner of the claims in the litigation and under the guarantees, PDL, Inc. and Presidential released each other and their respective officers, directors and affiliates from any claims each may have against the other, including any liability under the litigation and the guarantees. GS II also agreed to release the other guarantors from any claims GS II may have against those guarantors, including any liability under the litigation and the guarantees. GS II agreed to terminate the action against the guarantors, with prejudice, and in turn, Presidential Realty Corporation made a one-time payment of $200,000 to GS II. |
