1
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): October 25, 1999
Chastain Capital Corporation
(Exact name of registrant as specified in its charter)
GEORGIA 0-23913 58-2354416
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number)
3424 PEACHTREE ROAD, SUITE 800
ATLANTA, GEORGIA 30326
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (404) 848-8850
(Former Name or Former Address, if Changed Since Last Report)
N/A
- -------------------------------------------------------------------------------
2
Item 2. Acquisition or Disposition of Assets
On October 25, 1999, the Registrant sold a portion of its portfolio of mezzanine
loans and its entire remaining portfolio of commercial mortgage-backed
securities to Insignia Opportunity Partners in accordance with the terms of an
Asset Purchase Agreement dated as of August 2, 1999 (the "Insignia Agreement").
The proceeds of the sale of assets to Insignia Opportunity Partners were $24.4
million. The transaction had been approved by the shareholders of the Registrant
at the Registrant's annual meeting of shareholders held on October 1, 1999. The
manner of the disposition and a description of the assets involved, the
principle followed in determining the amount of the consideration received
therefor, and a description of the acquiror, Insignia Opportunity Partners, are
described in pages 12 through 18 of the Registrant's Definitive Proxy Statement
dated September 2, 1999 (the "Proxy Statement"), and a copy of the Insignia
Agreement is attached as Annex A of the Proxy Statement. The Proxy Statement and
the Insignia Agreement are hereby incorporated herein by reference.
On November 1, 1999, the Registrant sold its investment in a $21.0
million mezzanine loan to BankBoston, N.A. in accordance with the terms of a
Loan Purchase Agreement dated as of August 17, 1999 (the "BankBoston
Agreement"). The loan had been held by GMAC Commercial Mortgage Corporation
("GMAC") pursuant to a repurchase agreement entered into by the Registrant and
GMAC on April 5, 1999. The Registrant exercised its right to repurchase the loan
from GMAC immediately prior to consummating the sale to BankBoston, N.A. The
proceeds of the sale of the asset to BankBoston, N.A. were approximately $21.8
million. The transaction had been approved the shareholders of the Registrant at
the Registrant's annual meeting of shareholders held on October 1, 1999. The
manner of the disposition and a description of the assets involved, the
principle followed in determining the amount of the consideration received
therefor, and a description of the acquiror, BankBoston, N.A., are described in
pages 18 through 21 of the Proxy Statement, and a copy of the BankBoston
Agreement is attached as Annex B of the Proxy Statement. The Proxy Statement and
the BankBoston Agreement are hereby incorporated herein by reference.
On November 8, 1999, the Registrant sold its investment in a
(pound)11,980,000 mezzanine loan to Merrill Lynch Mortgage Capital Inc. in
accordance with the terms of a Purchase Agreement dated as of November 8, 1999.
As part of the sale of the loan, the Registrant terminated its foreign currency
swap arrangement with Merrill Lynch Capital Services, Inc., which had provided
the Registrant with a fixed exchange rate of $1.64 per pound Sterling on the
return of its principal investment and a fixed base rate on the loan of U.S.$
Libor minus 0.06%. The transaction resulted in total proceeds to the Registrant
of approximately $17.9 million.
The disposition of assets of the Registrant described in this report
were effected in connection with a Plan of Liquidation and Dissolution (the
"Plan of Liquidation"), pursuant to which all of the Registrant's assets are
to be liquidated and the Registrant dissolved in accordance with the Georgia
Business Corporation Code. The Plan of Liquidation was approved by the
Registrant's Board of Directors on May 14, 1999, and became effective upon the
approval of the shareholders of the Registrant at the Registrant's annual
meeting of shareholders on October 1, 1999.
-1-
3
Item 5. Other Events
On November 8, 1999, pursuant to the Plan of Liquidation, the
Registrant's Board of Directors declared a liquidating distribution of $7.45
per share of Common Stock, to be paid on November 29, 1999, to holders of
record of the Registrant's Common Stock at the close of business on November
19, 1999. The Registrant expects to make a final liquidating distribution after
it completes the sale of its remaining asset, a retail shopping center.
Although the Registrant intends to make such distribution as promptly as
practicable, the Registrant cannot predict with certainty the precise timing
and amount of any additional distributions to shareholders pursuant to the Plan
of Liquidation. The actual amount and timing of, and record dates for, such
additional distributions will be determined by the Board of Directors in its
sole discretion and will depend upon the proceeds of the sale of the
Registrant's remaining asset and the amounts deemed necessary by the Board to
pay or provide for all of the Registrant's liabilities and obligations. The
existence of contingent or unknown liabilities means that the ultimate amount
of liabilities cannot be determined with certainty, which makes it
impracticable to predict the aggregate net amounts ultimately to be distributed
to shareholders. Claims, liabilities and expenses will continue to accrue as
the Registrant winds up its affairs, and the Registrant anticipates that
expenses for professional fees and other expenses of liquidation will be
significant. These expenses will reduce the amount of cash available for
ultimate distribution to shareholders.
Pursuant to the Plan of Liquidation, the Registrant has filed a Notice
of Intent to Dissolve with the Secretary of State of Georgia. After all of the
assets of the Registrant have been sold, all known debts, liabilities and
obligations of the Registrant have been paid and discharged, or adequate
provision has otherwise been made therefor, and all net proceeds have been
distributed to or for the benefit of the Registrant's shareholders, the
Registrant will file Articles of Dissolution with the Secretary of State of
Georgia. Upon filing of the Articles of Dissolution, the Registrant will cease
to exist as a legal entity and will be dissolved. Upon filing of the Articles
of Dissolution, the Registrant's management agreement with Lend Lease Real
Estate Investments, Inc. will be terminated with no termination fee or other
payments by the Registrant.
Item 7. Exhibits.
2(a) Plan of Liquidation and Dissolution (incorporated by reference to
Annex C of the Registrant's Definitive Proxy Statement dated September
2, 1999)
2(b) Asset Purchase Agreement, dated as of August 2, 1999, among the
Registrant and Insignia Opportunity Partners (incorporated by
reference to Annex A of the Registrant's Definitive Proxy Statement
dated September 2, 1999)
2(c) Loan Purchase Agreement, dated as of August 17, 1999, among the
Registrant and BankBoston, N.A. (incorporated by reference to Annex B
of the Registrant's Definitive Proxy Statement dated September 2,
1999)
2(d) Purchase Agreement, dated as of November 8, 1999, between the
Registrant and Merrill Lynch Mortgage Capital Inc.
-2-
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: November 9, 1999
CHASTAIN CAPITAL CORPORATION
By: /s/Steven G. Grubenhoff
--------------------------
Steven G. Grubenhoff
Chief Financial Officer
-3-
5
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
2(a) Plan of Liquidation and Distribution (incorporated by
reference to Annex C of the Registrant's Definitive Proxy
Statement dated September 2, 1999)
2(b) Asset Purchase Agreement dated as of August 2, 1999, among
the Registrant and Insignia Opportunity Partners
(incorporated by reference to Annex A of the Registrant's
Definitive Proxy Statement dated September 2, 1999)
2(c) Loan Purchase Agreement dated as of August 17, 1999, among
the Registrant and BankBoston, N.A. (incorporated by
reference to Annex B of the Registrant's Definitive Proxy
Statement dated September 2, 1999)
2(d) Purchase Agreement dated as of November 8, 1999, between the
Registrant and Merrill Lynch Mortgage Capital Inc.
-4-