W2007 Grace Acquisition I, Inc. Preferred Shareholder Litigation FAQ (Updated 3/20/15):
Telephone Conference re-set for 3/17/2015 at 2:30.
Restricted to case participants at request of chambers.
Source: PACER [Docket 84]
Telephone Conference set for 3/12/2015 at 10:15.
Restricted to case participants at request of chambers.
Source: PACER [Docket 83]
Consent Motion Seeking the Scheduling of a Status Conference (3/02/15)
The motion is seeking a Status Conference during March.
Source: PACER [Docket 81]
What happened to the $26 "settlement"?
Looks like "Plan B".
W2007 Grace Acquisition I, Inc. and WNT Holdings, LLC Complete Sale of 116 Hotels for $1.808 Billion (2/27/15)
IRVING, Texas--(BUSINESS WIRE)--W2007 Grace Acquisition I, Inc. (“Grace”) and WNT Holdings, LLC (“WNT”) announced today that certain of their subsidiaries have completed the sale of 116 hotels to affiliates of American Realty Capital Hospitality Trust, Inc. (“ARC Hospitality”) for a combined purchase price of approximately $1.808 billion. ARC Hospitality is a publicly registered, non-traded real estate investment trust. In connection with the sale, ARC Hospitality assumed $903.9 million of existing financing secured by the 96 hotels owned by WNT’s subsidiaries and the remaining 20 hotels owned by Grace’s subsidiaries were delivered unencumbered by any financing. In addition to the debt assumption, the $1.808 billion purchase price includes receipt of (i) $99.8 million of preferred equity interests in the entity controlled by ARC Hospitality that acquired the 20 hotels from Grace’s subsidiaries and (ii) $347.3 million of such preferred equity interests in the entity that acquired the 96 hotels from WNT’s subsidiaries. WNT now owns a portfolio of 10 hotels for which it is evaluating various strategic alternatives. Grace no longer owns any hotels but continues to hold a 3% interest in WNT and the $99.8 million of preferred equity interests referred to above. Grace does not expect to commence payment of dividends or to otherwise distribute the net proceeds from the sale transaction, but instead expects to use the net proceeds for general corporate purposes, including satisfaction of liabilities, and to retire outstanding debt.
Goldman, Sachs & Co. and Deutsche Bank Securities Inc. acted as financial advisors to the selling subsidiaries. RCS Capital, the investment banking and capital markets division of Realty Capital Securities, LLC, a subsidiary of RCS Capital Corporation (NYSE: RCAP), acted as financial advisor to ARC Hospitality. Ladder Capital Finance, LLC and Deutsche Bank AG, New York Branch provided ARC Hospitality financing in connection with the acquisition.
The Memorandum of Support was filed 12/04/14.
Outside of a shareholder letter and a change of address notification, nothing has been added to the docket since then.
It sure feels great being wrong today.
I expected that preferred holders would have to approve the sale at a Special Meeting.
Here is the link to the Revised Proxy:
American Realty Capital Hospitality Trust Completes Acquisition Of Equity Inns Lodging Portfolio For $1.8 Billion
By PR Newswire Follow | 02/27/15 - 02:59 PM EST
Find out if (RCAP) is in Cramer's Portfolio.
NEW YORK, Feb. 27, 2015 /PRNewswire/ -- American Realty Capital Hospitality Trust, Inc. ("ARC Hospitality") announced today that it has completed the previously announced acquisition of the Equity Inns Lodging Portfolio ("Equity Inns" or the "Portfolio") from affiliates of the Whitehall Real Estate Funds sponsored by Goldman Sachs. The total purchase price was $1.8 billion, exclusive of closing costs.
American Realty Capital Hospitality Trust, Inc. Logo.
The Portfolio consists of 116 hotels totaling 13,744 rooms across 31 states, all franchised by Hilton Hotels & Resorts, Marriott International, Hyatt Hotels and InterContinental Hotels Group. The hotels include leading brands such as Hampton Inn, Hilton Garden Inn, Homewood Suites, Embassy Suites, Courtyard, Residence Inn, Hyatt Place and Holiday Inn.
The acquisition of the Portfolio increases ARC Hospitality's lodging portfolio to 122 hotels totaling 14,925 rooms, establishing ARC Hospitality as one of the largest owners of select-service hotels in the North American lodging REIT sector.
"We are delighted to announce the acquisition of the Equity Inns portfolio, which represents a transformational event for ARC Hospitality," commented William M. Kahane, Chairman of ARC Hospitality. "In our opinion, Equity Inns offers compelling value among recently marketed and comparable select-service portfolios from the standpoint of both price per key, as well as on a yield basis. This nationwide portfolio of high-quality, stabilized hotels with strong brand affiliations, geographic diversification and healthy growth dynamics, supports our strategy of providing consistent distributions and the potential for capital appreciation to our investors."
"The Equity Inns purchase marks the largest acquisition in the history of the non-traded REIT industry, and propels ARC Hospitality into a leadership position among select-service lodging REITs in North America," said Jonathan P. Mehlman, President and Chief Executive Officer of ARC Hospitality. "Our diligence on this transaction began nearly one year ago. Since then, we have seen positive upward trends in the Portfolio's operating results, exceeding our initial underwriting expectations. We believe the combination of an improving economy, our ability to purchase hotels with stable occupancies at a discount to replacement cost, as reflected by this transaction, and our cultivated relationship with our management company partners has created a solid platform for ARC Hospitality to drive shareholder value."
Edward T. Hoganson, Chief Financial Officer of ARC Hospitality, added, "The Equity Inns portfolio has a majority of properties located in the top 100 MSAs and premier locations in their respective markets, and we believe it exhibits strong top- and bottom-line growth fundamentals. As part of this transaction, we were able to secure what we consider to be attractive financing, which we expect will support the Company's distributions going forward. We are pleased to continue building our relationships with the franchise brands, who were instrumental to us throughout the transaction process and closing."
In connection with the acquisition, ARC Hospitality assumed $903.9 million of debt financing which is collateralized by 96 of the 116 properties. Simultaneously with the closing, ARC Hospitality obtained $227.0 million of first mortgage financing for the remaining 20 properties. The sellers will retain a preferred equity interest of $447.1 million that carries no prepayment restrictions or penalties. ARC Hospitality funded the remaining $230.1 million with cash-on-hand from proceeds of the offering of its common stock.
RCS Capital, the investment banking and capital markets division of Realty Capital Securities, LLC, a subsidiary of RCS Capital Corporation (NYSE: RCAP), acted as financial advisor to ARC Hospitality. RCS Capital Corporation is under common control with the parent of the sponsor of ARC Hospitality. Goldman, Sachs & Co. and Deutsche Bank Securities Inc. acted as financial advisors to the sellers. Goodwin Procter LLP and Proskauer Rose LLP acted as legal advisors to ARC Hospitality. Sullivan & Cromwell LLP acted as legal advisor to the sellers.
Moody's: No Rating Impact on EQTY 2014-INNS Following a Permitted Transfer of Ownership and Assumption of Debt for Equity Inns
2015-02-26 17:44:03.867 GMT
New York, February 26, 2015 -- Moody's Investors Service (Moody's) was
informed of a permitted transfer of ownership and assumption of debt
request from the current borrowers of the Equity Inns Portfolio loan in
EQTY 2014-INNS Mortgage Trust, Commercial Mortgage Pass-Through
Certificates. Ten (10) newly formed Delaware LLC and LP entities each to
be owned indirectly by American Realty Capital Hospitality Portfolio
Member, LP (Proposed Borrower) will take ownership and assume debt from
W2007 Equity Inns Realty, LLC and W2007 Equity Inns Realty LP (Current
Borrowers). Concurrently, with the closing of the transfer of ownership
and assumption of debt, ARC Hospitality Portfolio Mezz, LP, a Delaware
limited partnership will assume mezzanine debt from WNT Mezz I, LLC.
American Realty Capital Hospitality Operating Partnership, LP and
American Realty Capital Hospitality Trust Inc. will be Replacement
Guarantor. Whitehall Street Global Real Estate Limited Partnership 2007
and Whitehall Parallel Global Real Estate Limited Partnership 2007 will
remain as Loan Guarantors.
The proposed transfer and assumption will become effective upon
satisfaction of the conditions set forth in the governing documents and
such other terms as the loan servicer for the trust may require.
Moody's has reviewed the proposed transaction and determined that this
action will not in and of itself and as of this date, result in a
downgrade or withdrawal of the current ratings of any class of
certificates rated by Moody's for EQTY 2014-INNS Mortgage Trust,
Commercial Mortgage Pass-Through Certificates. Moody's opinion addresses
only the credit impact associated with the proposed amendment, and
Moody's is not expressing any opinion as to whether the amendment has,
or could have, other non-credit related effects that may have a
detrimental impact on the interests of holders of rated obligations
The last rating action for EQTY 2014-INNS was taken on June 20, 2014.
The principal methodology used in this rating was "Moody's Approach to
Rating CMBS Large Loan/Single Borrower Transactions" published in July
2000. Please see the Credit Policy page on www.moodys.com for a copy of
Moody's will continue monitoring the ratings. Any change in the ratings
will be publicly disseminated by Moody's through appropriate media.
This publication does not announce a credit rating action. For any
credit ratings referenced in this publication, please see the ratings
tab on the issuer/entity page on www.moodys.com for the most updated
credit rating action information and rating history.
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
W2007 Grace Acquisition I, Inc. Fourth Quarter 2014 Dividends (12/30/14)
IRVING, TX — December 30, 2014 — W2007 Grace Acquisition I, Inc. today announced that, while it is no longer subject to covenants that would prevent the payment of dividends, in light of its and its subsidiaries’ current cash position, its and their anticipated capital expenditures, and pending debt maturity in March 2015, it has determined that it is not in the best interest of the Company to declare a fourth quarter 2014 dividend with respect to the 8.75% Series B Cumulative Preferred Stock and 9.00% Series C Cumulative Preferred Stock.
Please refer to the Amended and Restated Charter of W2007 Grace Acquisition I, Inc. for a description of the 8.75% Series B Cumulative Preferred Stock and 9.00% Series C Cumulative Preferred Stock.
CONTACT: W2007 Grace Acquisition I, Inc.
Tel: (972) 368-2081
EI, would you be able to post the URL for the new memorandum? I am having issues figuring out how to search for it on Pacer.
Memorandum in Support of Motion for Order of Preliminary Approval of Class Action Settlement and Scheduling of Final Approval Hearing and Proposed Order Submitted (12/04/14)
Source: PACER [Docket 78]
ARCHT Unaudited Pro Forma Condensed Consolidated Financial Statements (9/30/14)
W2007 Grace I, LLC Unaudited Condensed Consolidated Financial Statements (9/30/14)
It has been 91 days since the settlement announcement.
Still no binding settlement agreement? I just checked PACER. The date of the last filing remains stuck at 10/09/14.
Fewer properties. Less money.
The Settlement was not contingent on the sale.
so what do you make of the amendment ?
seems a lower price is being paid as all properties will not be sold. So will they try to keep the company operating and not pay the preferred ???
Entry into a Material Definitive Agreement (11/17/14)
As previously reported in its Current Report on Form 8-K filed on June 2, 2014, American Realty Capital Hospitality Trust, Inc. (the “Company”), through a wholly owned subsidiary of the Company’s operating partnership, entered into a Real Estate Sale Agreement (the “Original Agreement”) with W2007 Equity Inns Realty, LLC, W2007 Equity Inns Realty, L.P., W2007 EQI Urbana Partnership, L.P., W2007 EQI Seattle Partnership, L.P., W2007 EQI Savannah 2 Partnership, L.P., W2007 EQI Rio Rancho Partnership, L.P., W2007 EQI Orlando Partnership, L.P., W2007 EQI Orlando 2 Partnership, L.P., W2007 EQI Naperville Partnership, L.P., W2007 EQI Milford Corporation, W2007 EQI Louisville Partnership, L.P., W2007 EQI Knoxville Partnership, L.P., W2007 EQI Jacksonville Partnership I, L.P., W2007 EQI Indianapolis Partnership, L.P., W2007 EQI Houston Partnership, L.P., W2007 EQI HI Austin Partnership, L.P., W2007 EQI East Lansing Partnership, L.P., W2007 EQI Dalton Partnership, L.P., W2007 EQI College Station Partnership, L.P., W2007 EQI Carlsbad Partnership, L.P., W2007 EQI Augusta Partnership, L.P. and W2007 EQI Asheville Partnership, L.P. (collectively, the “Sellers”) pursuant to which one or more subsidiaries of the Company agreed to acquire the fee simple interest or leasehold interest held by the Sellers in a portfolio of 126 hotels assets (each, a “Hotel” and, collectively, the “Portfolio”). W2007 Grace I, LLC is indirectly owned by one or more Whitehall Real Estate Funds (“Whitehall”), an investment fund controlled by The Goldman Sachs Group, Inc. (“Goldman”).
None of W2007 Grace I, LLC, Whitehall, Goldman or the Sellers have any material relationship with the Company or its subsidiaries, other than through the Original Agreement and the Agreement (as defined below) and other related contracts to be entered into upon closing of the transaction described in the Agreement.
Amended and Restated Real Estate Sale Agreement
On November 11, 2014, certain subsidiaries of the Company’s operating partnership (collectively the “Purchasers”) and Sellers entered into an Amended and Restated Real Estate Sale Agreement (as so amended, the “Agreement”) to amend and restate the Original Agreement to change certain key terms and to reflect all previous amendments and supplements thereto. Pursuant to the Agreement, the Purchasers and Sellers agreed to eliminate 10 hotel assets from the Portfolio and reduce the size of the Portfolio to 116 hotel assets. In connection with the reduction in the size of the Portfolio to 116 hotel assets, the aggregate contract purchase price for the Portfolio was reduced from approximately $1.925 billion to approximately $1.808 billion. The Portfolio now consists of a total of 13,744 rooms across 31 states.
The Company anticipates funding approximately $230.1 million of the purchase price under the Agreement with cash-on-hand raised in its on going initial public offering of common stock, funding approximately $903.9 million through the assumption of existing indebtedness (consisting of $801.1 million of mortgage debt and $102.8 million of mezzanine debt), and funding approximately $227.0 million through additional mortgage financing. There can be no assurance that the Company will be able to assume such indebtedness, raise sufficient capital, secure alternative financing or secure additional financing on terms that it deems favorable or at all.
The Company anticipates that the remaining $447.1 million of the contract purchase price will be satisfied by the issuance of preferred equity interests in two newly-formed Delaware limited liability companies, ARC Hospitality Portfolio I Holdco, LLC and ARC Hospitality Portfolio II Holdco, LLC, each of which will be an indirect subsidiary of the Company and an indirect owner of the Portfolio. The holders of the preferred equity interests will be entitled to monthly distributions at a rate of 7.50% per annum for the first 18 months following closing and 8.00% per annum thereafter. On liquidation, the preferred equity interests will be entitled to receive their original value (as reduced by redemptions) prior to any distributions being made to the Company or its shareholders. After the earlier to occur of either (i) the date of repayment in full of currently outstanding unsecured obligations of the Company’s operating partnership in the original principal amount of approximately $63 million or (ii) the date the gross amount of equity proceeds received by the Company following the closing of the acquisition of the Portfolio exceeds $100 million, the Company will be required to use 35% of any proceeds from its ongoing initial public offering of common stock to redeem the preferred equity interests at par, up to a maximum of $350 million for any 12-month period. The Company will also be required in certain circumstances to apply debt proceeds to redeem the preferred equity interests at par. As of the end of the third year following the closing of the acquisition, the Company will be required to have redeemed 50% of the preferred equity interests, and as of the end of the fourth year following the closing of the acquisition, the Company will be required to redeem 100% of the preferred equity interests remaining outstanding at such time. In addition, the Company will have the right, at its option, to redeem the preferred equity interests, in whole or in part, at any time at par. The holders of preferred equity interests will have certain customary consent rights over actions by the Company relating to the Portfolio. If the Company is unable to satisfy the redemptions requirements, the holders of preferred equity interests will have certain rights, including the ability to assume control of the operations of the Portfolio.
The Company currently anticipates closing this acquisition by February 27, 2015, which date may not be extended under the Agreement without consent of the Sellers. Although the Company has entered into the Agreement relating to the acquisition of the Portfolio, there is no guarantee that the Company will be able to consummate the acquisition of such assets. Pursuant to the terms of the Agreement, the completion of the acquisition of the Portfolio remains subject to certain conditions to closing, including assumption by the Company of the Deutsche Bank Loan and the Mezzanine Loan (each as defined below) (or the entry into alternative financing arrangements to replace them), entering into replacement franchise agreements for each Hotel (subject to waiver, on a hotel by hotel basis, by the lenders under the Deutsche Bank Loan and the Mezzanine Loan) and obtaining the consent of certain ground lessors for certain Hotels.
Under the Original Agreement, the Company was required to make a $50.0 million earnest money deposit, with an additional $25.0 million due if the Company exercised its right to extend closing of the acquisition to December 15, 2014. This right was exercised on July 21, 2014 through an amendment to the Original Agreement and the additional $25.0 million earnest money deposit was funded on September 19, 2014. Under the Agreement, the full amount of this deposit will be refunded to the Company if the Agreement is terminated by the Company for any reason prior to November 26, 2014, $50.0 million will be refunded if the Agreement is terminated on the basis of the failure of the Purchasers to satisfy certain limited closing conditions related to the assumption of debt and no amounts will be refunded under other circumstances of termination of the Agreement, including breaches by the Purchasers.
The summary above is qualified in its entirety by reference to the copy of the Agreement and the exhibits thereto, which was filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 as Exhibit 10.36.
The Portfolio is currently encumbered by debt in an aggregate principal amount of $903.9 million, which amount includes (i) a loan in original principal amount of $801.1 million made by German American Capital Corporation to W2007 Equity Inns Realty, L.P. and W2007 Equity Inns Realty, LLC (the “Deutsche Bank Loan”) and (ii) a loan in original principal amount of $102.8 million made by German American Capital Corporation to WNT Mezz I, LLC (the “Mezzanine Loan”). The Company intends to assume both of these loans. Sellers will cause any other assets encumbered by the Deutsche Bank Loan and the Mezzanine Loan and not included in the Portfolio to be released from the liens of the Deutsche Bank Loan and the Mezzanine Loan immediately prior to Closing.
The Deutsche Bank Loan matures on May 1, 2016, subject to three (one-year) extension rights which, if all three are exercised, result in an outside maturity date of May 1, 2019 and has an interest rate of (i) for a LIBOR loan, LIBOR plus 3.11% (the “LIBOR Rate”), and (ii) for a prime rate loan, the sum of the “Prime Rate” published in the Wall Street Journal plus the difference (expressed as a number of basis points) between (A) the sum of the LIBOR Rate, minus (B) the Prime Rate. The Deutsche Bank Loan is fully prepayable with certain prepayment penalties prior to May 1, 2015 and prepayable at par after May 1, 2015.
The Mezzanine Loan matures on May 1, 2016, subject to three (one-year) extension rights which, if all three are exercised, result in an outside maturity date of May 1, 2019. The Mezzanine Loan has an interest rate of: (i) for a LIBOR loan, LIBOR plus 4.77%, and (ii) for prime rate loans, the sum of the Prime Rate, plus the difference (expressed as a number of basis points) between (A) LIBOR plus 4.77%, minus (B) the Prime Rate. The Mezzanine Loan is fully prepayable with certain prepayment penalties prior to May 1, 2015 and prepayable at par after May 1, 2015.
Pursuant to the Agreement, the current guarantors of the Deutsche Bank Loan and the Mezzanine Loan will remain as guarantors following the closing of the acquisition of the Portfolio. At the closing of the acquisition of the Portfolio, the Company will also be required to enter into a supplemental guarantee agreement with the Sellers and the existing guarantors, which are affiliates of the Sellers. This agreement will provide that the Company, together with its operating partnership, will be liable to reimburse the existing guarantors for any payments they are required to make if their guarantee is called. The supplemental guarantee agreement also will provide that, to the extent the existing guarantors have not been replaced, we will be required to pay a guarantee fee of $8 million per annum which will start accruing 18 months following the closing of the acquisition.
The Company anticipates that the remaining 20 Hotels will be delivered unencumbered by debt at closing. The Company intends to incur additional debt secured by such remaining properties, but there can be no assurance that it will be able to obtain such financing on favorable terms or at all.
No update from W2007 Grace Acquisition I, Inc.
American Realty Capital Hospitality Trust Amends Agreement to Acquire Equity Inns Lodging Portfolio (11/13/14)
Extends Closing Date to February 27, 2015
Company to Acquire 116 Hotels Totaling 13,744 Rooms in 31 States for a Purchase Price of $1.808 Billion
NEW YORK, Nov. 13, 2014 /PRNewswire/ -- American Realty Capital Hospitality Trust, Inc. ("ARC Hospitality" or the "Company"), announced today that it has entered into a definitive, amended and restated purchase and sale agreement (the "Amended Purchase Agreement") for the acquisition of the Equity Inns Lodging Portfolio that consists of 116 hotel assets (previously 126 hotel assets) ("Equity Inns" or the "Portfolio"). Equity Inns is being acquired from subsidiaries of W2007 Grace I, LLC and WNT Holdings, LLC, each of which are indirectly owned by one or more Whitehall Real Estate Funds ("Whitehall"), real estate private equity funds sponsored by The Goldman Sachs Group, Inc.
The transaction is scheduled to close on February 27, 2015. Both parties have agreed to the removal of several contingencies that were included in the original purchase and sale agreement, which they believe provides greater certainty to the successful execution of the transaction. The acquisition of Equity Inns, when completed, will increase ARC Hospitality's lodging portfolio to 122 hotels totaling 14,925 rooms, establishing ARC Hospitality as one of the largest owners of select-service hotels (by enterprise value) in the North American lodging REIT sector.
Under the terms of the Amended Purchase Agreement, ARC Hospitality, through its subsidiaries, will acquire the Portfolio for a purchase price of $1.808 billion. The Portfolio will consist of 116 hotels totaling 13,744 rooms across 31 U.S. states, franchised by leading global hotel brands including Hilton Hotels & Resorts, Marriott International, Hyatt Hotels and InterContinental Hotels Group. It will encompass a number of well-known hotel flags, including Hampton Inn, Hilton Garden Inn, Homewood Suites, Embassy Suites, Courtyard, Residence Inn, Hyatt Place and Holiday Inn.
About ARC Hospitality
ARC Hospitality is a publicly registered, non-traded real estate investment trust ("REIT") that intends to qualify as a REIT for tax purposes with the taxable year ending December 31, 2014.
Yes. I tried to retract my comments but couldn't. They are affiliated companies.
Maybe it is American Realty Capital, not Capital Realty.
When evaluating real estate, Cash Flow is the statement of most interest. Balance Sheets and Income Statements may be disguised by depreciation on an asset that is actually rising or remaining stable in value. Cash does not lie.
W2007 Grace I, LLC Unaudited Condensed Consolidated Financial Statements (6/30/14)
Conventional wisdom would say that it is true.
However, I may not sure what impact a Keepwell Agreeement has on the outcome.
Ummmmm, there isn't enough value to pay out par plus accrued?
Why do you say this? The transaction is expected to close in December. Also, I am not so sure the $26 price is set. Some attorney looking to profit from the situation claims to act as an "advocate" for the shareholders. Correct me if I am wrong, but based on the terms of the preferred shares, the transaction with ARC should guarantee holder par + unbiased dividends. I would say shareholders should not accept this "agreement". Tell me where I am wrong in this assessment.
it seems the $26 payment is still 6 months away