United Development Funding IV fka UDFI

[Enterprising Investor]

Buffington Land Development (12/31/16)

Apparently due the bad press, a planned transition of certain development projects of Buffington Land Development, LLC to successor developers unaffiliated with UDF III did not occur. Effective as of 12/31/16, UDF III, together with certain of its affiliates and subsidiaries, entered into various assignments and a release agreement with Buffington Land Development and certain of its affiliates and subsidiaries.

As a part of the transaction, UDF III and certain of its subsidiaries entered into the following agreements:

An Assignment and Assumption of Interests in BLD VOHL 6A-1, LLC, a Texas limited liability company that was a wholly-owned subsidiary of Buffington Land Development (“VOHL”), among Buffington Land Development, UDF III, United Development Funding IV, an affiliated Maryland real estate investment trust (“UDF IV”), United Development Funding, L.P., an affiliated Delaware limited partnership (“UDF I”), and LD Equity, LLC, a Texas limited liability company that is jointly owned by UDF III and UDF I (“LD Equity”). Under this assignment, Buffington Land Development conveyed 100% of the membership interests in VOHL to LD Equity. VOHL owns 6 finished residential lots and approximately 4.56 acres of land in Pflugerville, Travis County, Texas. UDF I, UDF III and UDF IV are lenders to VOHL. This assignment resulted in (i) $33,442,945 of forgiveness of indebtedness of Buffington Land Development associated with the loan balance jointly and severally owed by Buffington Land Development, VOHL and other subsidiaries and affiliates of Buffington Land Development to UDF I; and (ii) $122,117,682 of forgiveness of indebtedness of Buffington Land Development associated with the loan balance jointly and severally owed by Buffington Land Development, VOHL and other subsidiaries and affiliates of Buffington Land Development to UDF III.

(a) UDF I represents that as of 12:01 a.m. on the Effective Date, the outstanding principal balance of the UDF I Loan was $30,880,857.16, and $3,012,088.58 of interest was accrued and unpaid, for a total amount due to UDF I under the UDF I Loan of $33,892,945.74. As of the Effective Date, but immediately prior to the effectiveness of this Assignment, UDF I forgives $33,442,945.74 (forgiving all of the outstanding accrued but unpaid interest, plus $30,430,857.16 of principal), such that as of the effectiveness of this Assignment, the outstanding balance of principal due under the UDF I Loan is $450,000.00. UDF I will report to the Internal Revenue Service and to Assignor this forgiveness of indebtedness as appropriate or required under the Internal Revenue Code, and Assignor agrees not to challenge the timing of the forgiveness indebtedness as being completed prior to the Assignment.

(b) UDF III represents that as of 12:01 a.m. on the Effective Date, the outstanding principal balance of the UDF III Loan was $112,521,174.66, and $10,046,507.61 of interest was accrued and unpaid, for a total amount due to UDF III under the UDF III Loan of $122,567,682.27. As of the Effective Date, but immediately prior to the effectiveness of this Assignment, UDF III forgives $122,117,682.27 (forgiving all of the outstanding accrued but unpaid interest, plus $112,071,174.66 of principal), such that as of the effectiveness of this Assignment, the outstanding balance of principal due under the UDF III Loan is $450,000.00. UDF III will report to the Internal Revenue Service and to Assignor this forgiveness of indebtedness as appropriate or required under the Internal Revenue Code, and Assignor agrees not to challenge the timing of the forgiveness indebtedness as being completed prior to the Assignment.

(c) Assignor, Assignee and UDF IV agree that the assignment of Interests effected by this Agreement is made subject to the full outstanding amount of the UDF IV Loan. As of the Effective Date, the outstanding principal balance of the UDF IV Loan is $170,447.13, and $10,532.23 of interest is accrued but unpaid, for a total amount due to UDF IV under the UDF IV Loan of $180,979.36.

A special warranty deed from Buffington Land, Ltd., a Delaware limited partnership, to VOHL, pursuant to which Buffington Land conveyed to VOHL the approximately 4.56 acres of land described above.

https://www.sec.gov/Archives/edgar/data/1335732/000114420417001162/v456493_8k.htm