Key Developments For FirstCity Financial Corporation
FirstCity Financial Corporation (FCFC.O) (Nasdaq)
FirstCity Financial Corp. Agrees To Settle Lawsuit
FirstCity Financial Corp. announced that it has entered into an agreement and stipulation of settlement which provides for the settlement of the lawsuit involving the disputed ownership of approximately $18.6 million of proceeds from the demutualization of Prudential Insurance Company. The agreement between the three claimants calls for the proceeds to be split evenly between the parties. Pursuant to the agreement FirstCity Financial will receive approximately $6.2 million in proceeds. The agreement must be approved by the trial court and if approved it is anticipated that the proceeds will be distributed to all parties prior to year end.
FirstCity Financial Corp. Announces Update On Lawsuit Regarding Demutualization Proceeds
FirstCity Financial Corp. announced that on June 4, 2009, the Company received notice of the issuance of an opinion by the Court of Appeals for the First District of Texas in FCLT Loans Asset Corp. and Timothy J. Blair, class representative v. FirstCity Financial Corporation in which the Court of Appeals denied the joint motion of the parties to the suit to abate the appeal, reversed the judgment in favor of FirstCity and remanded the case to the trial court. The Court held that JPMorgan, as successor trustee, is the legal owner of the demutualized proceeds interpled by Prudential Financial, Inc., and that the trustee's participation is necessary to determine the appropriate disbursement of the demutualization proceeds. The Interpleader Suit was originally filed by Prudential to determine the ownership of stock and dividends that became available as a result of the demutualization of Prudential Insurance Company of America (Prudential Insurance). On March 21, 2006, the trial court entered an order granting FirstCity's motion for partial summary judgment and rendered judgment in favor of FirstCity as to the ownership of the demutualization proceeds. On November 25, 2008, the parties to the suit reached a preliminary agreement to settle the lawsuit involving the disputed ownership of approximately $18.6 million of proceeds from the demutualization of Prudential Insurance Company.
FirstCity Financial Corp. Agrees To Settle Lawsuit
FirstCity Financial Corp. announced that it has reached a preliminary agreement to settle the lawsuit involving the disputed ownership of approximately $18.6 million of proceeds from the demutualization of Prudential Insurance Company. A court-ordered mediation was held on November 18, 2008 and following the unsuccessful mediation the mediator submitted the mediator's proposal to the three claimants. The mediator's proposal accepted by the claimants on November 25, 2008 provides for each of the parties to receive 25% of the demutualization proceeds (approximately $4,650,000 each) upon approval of the settlement by the trial court, and for the remaining 25% ($4,650,000) to be held pending the determination of the appeal by the Court of Appeals. The remaining 25% will be distributed to FirstCity if the Court of Appeals affirms the summary judgment granted by the trial court in favor of FirstCity. In the event of any other ruling by the Court of Appeals, the remaining 25% will be split one-third to each party (approximately $1,550,000 each). The effect of the agreement is that FirstCity would receive in total approximately $9,300,000 of the demutualization proceeds (50%), if the Court of Appeals affirms the summary judgment granted in 2006 by the trial court in favor of FirstCity, and alternatively, if the Court of Appeals does not affirm the decision in favor of FirstCity, FirstCity will receive $6,200,000 (33.3%) of the demutualization proceeds.
FirstCity Financial Corp. Completes Purchases Under Stock Repurchase Plan
FirstCity Financial Corp. announced that it has completed the purchase of stock under its stock repurchase plan. The Board of Directors initially approved the purchase of an aggregate of 1,000,000 shares of the Company's common stock on August 11, 2006, and increased the stock repurchase plan by an additional 500,000 shares on January 31, 2008. The Board of Directors authorized the purchases to be made through August 30, 2009. FirstCity has purchased 1,500,000 shares of its common stock pursuant to the stock repurchase plan for an aggregate purchase price of $10,922,517 during the period from August 14, 2006 through October 10, 2008, at an average cost of $7.28 per share (including 439,170 shares purchased since June 30, 2008 at an average cost of $3.87 per share). FirstCity currently has 9,831,937 shares of common stock outstanding.
FirstCity Financial Corp. Increases Its Lending Facilities By $100 Million
FirstCity Financial Corp. announced that the Company and Bank of Scotland have amended the Company's existing corporate credit facility to increase the maximum available commitment under the revolver from $175 million to $225 million. This increase, along with a $50 million increase in the borrowing facility to FH Partners to finance portfolio and asset purchases represents total increased borrowing capacity for the Company of $100 million.
