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): September 26,
2008
(Exact
Name of Registrant as Specified in Charter)
Nevada
(State
or Other Jurisdiction
of
Incorporation)
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0-22999
(Commission
File
Number)
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94-2432628
(IRS
Employer
Identification
No.)
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423
West 55
th
,
12
th
Floor
New
York, New York 10019
(Address
of Principal Executive Offices) (Zip Code)
Registrant’s
telephone number, including area code:
(212) 949-5000
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 (
see
General Instruction
A.2. below):
¨
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.02. Termination of a
Material Definitive Agreement.
On
October 2, 2008, Tarragon Corporation (“Tarragon” or the “Company”) formally
terminated its agreement (the “Contribution Agreement”) to form two joint
ventures with Northland Investment Corporation (“Northland”), pursuant to
section 2. 4 thereof, because a required lender consent was not
obtained. Tarragon and Northland are currently engaged in litigation
regarding the termination of the Contribution Agreement. Pursuant to
the terms of the Contribution Agreement, the Company and Northland had agreed to
contribute assets to the first joint venture (the “Real Estate Joint Venture”),
subject to lender approval and other customary closing
conditions. Tarragon and Northland also agreed to form a
second joint venture (the “Management Joint Venture”) to provide property, asset
and construction management services to the properties in the Real Estate Joint
Venture and to third parties. The Real Estate Joint Venture and
Management Joint Venture were also terminated when the Contribution Agreement
was terminated.
Item 2.04.
Triggering Events that Accelerate or
Increase Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
On
September 29, 2008, the Company received a notice of default and acceleration
from National City Bank (“National City”) related to three loans totaling
approximately $42.9 million in aggregate principal amount outstanding, made to
wholly owned subsidiaries of the Company and guaranteed by the
Company. The loans are secured by real estate and are
cross-collateralized. The notice states that one of the loans, in the
principal amount of $5.6 million, was not paid at maturity in July 2008, that
such failure constituted an event of default and that, as a result, National
City was accelerating all of the outstanding indebtedness under the three notes,
including accrued and unpaid interest of approximately $0.3
million.
The
Company is currently in discussions with National City with respect to the loans
described above. However, there can be no assurance as to the outcome
of any such discussions. Defaults under the National City loans may
constitute a cross-default or event of default under certain of the Company’s
other loan agreements, indentures, mortgages and other evidences of
indebtedness, and the lenders that are parties thereto may elect to exercise
their rights and remedies thereunder. There can be no assurance as to
the outcome of any such lender action.
Item
3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On
September 26, 2008, the Company received a deficiency notice from The NASDAQ
Stock Market (“NASDAQ”) stating that the Company is not in compliance with
NASDAQ Marketplace Rule 4450(a)(5) because the minimum bid price of the
Company’s common stock has closed below $1.00 per share for 30 consecutive
business days. The NASDAQ letter has no immediate effect on the
NASDAQ listing or trading of the Company’s common stock.
In
accordance with M
ar
ketplace Rule 4450(e)(2), the Company
has 180 calendar days, or until March 25, 2009, to regain
compliance. If at any time before March 25, 2009, the bid price of
the Company’s common stock closes at $1.00 per share or more for a minimum of 10
consecutive business days, NASDAQ will notify the Company that it has achieved
compliance with NASDAQ’s minimum bid price requirements. If the
Company does not regain compliance by March 25, 2009, NASDAQ will notify the
Company that its common stock will be delisted from the NASDAQ Global Select
Market, unless the Company requests a hearing before a Nasdaq Listing
Qualifications Panel. Alternatively, NASDAQ may permit the Company to
transfer its common stock to The NASDAQ Capital Market if it satisfies the
requirements for initial inclusion set forth in Marketplace Rule 4310(c), except
for the minimum bid price requirement. If its application for
transfer is approved, the Company would have an additional 180 calendar days to
comply with the minimum bid price requirement in order to remain on The NASDAQ
Capital Market.
The
Company issued a press release on October
1
, 2008 disclosing
its receipt of the deficiency notice. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item 9.01. Financial Statements
and Exhibits.
(d) Exhibits
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Exhibit
No
.
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Description
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99.1
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Tarragon
press release dated October 1, 2008
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SIGNATURE
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.
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TARRAGON
CORPORATION
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By:
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/s/
Erin D. Pickens
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Erin
D. Pickens
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Chief
Financial Officer
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Date: October
2, 2008
EXHIBIT
INDEX
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Exhibit
No
.
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Description
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99.1
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Tarragon
press release dated October 1, 2008
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