Deerfield Capital Corp. Adopts Stockholder Rights Plan Designed to Preserve Tax Benefit of Net Capital Losses and Net Operating
March 11 2009 - 3:14PM
PR Newswire (US)
CHICAGO, March 11 /PRNewswire-FirstCall/ -- Deerfield Capital Corp.
(NYSE Alternext: DFR) announced today that its Board of Directors
has adopted a Stockholder Rights Plan designed to preserve
stockholder value and the value of certain tax assets associated
with previously accumulated net capital losses ("NCLs") and net
operating losses ("NOLs"). The Stockholder Rights Plan is designed
to dissuade investors from aggregating ownership in Deerfield
Capital Corp. (the "Company") and triggering an "ownership change"
for purposes of Sections 382 and 383 of the Internal Revenue Code
of 1986, as amended. In the event the Company's stockholders adopt
and approve an amendment to the Company's charter providing for
restrictions on certain acquisitions and dispositions of the
Company's securities in order to preserve the benefit of the
Company's NCLs, NOLs or other tax attributes, the Stockholder
Rights Plan will automatically expire in accordance with its terms.
The Company's ability to use its NCLs and NOLs would be
significantly limited if there was such an "ownership change." An
ownership change would occur, generally, if stockholders owning (or
deemed to own) 5% or more of the Company's stock increase their
collective ownership of the aggregate amount of outstanding shares
of the Company by more than 50 percentage points over a defined
period of time. The Stockholder Rights Plan was adopted to reduce
the likelihood of an "ownership change" occurring. "A stockholder
rights plan protects the interests of all stockholders by reducing
the likelihood that our Company will lose the tax benefits
associated with accumulated net capital losses and net operating
losses," said Jonathan Trutter, Chief Executive Officer of the
Company. "The stockholder rights plan is not intended for defensive
or anti-takeover purposes and we believe its implementation is in
the best interests of all stockholders. We further believe that
providing for the expiration of the rights plan upon the adoption
of a charter amendment intended to preserve NCLs, NOLs or other tax
attributes is in the best interest of our stockholders." Under the
Stockholder Rights Plan, rights to purchase one onethousandth
(1/1000th) of a share of a new Series A Junior Participating
Preferred Stock of the Company ("Rights") at a price of $16.00 per
one onethousandth of a Preferred Share will be distributed as a
dividend at the rate of one Right for each share of the Company's
Common Stock held of record on March 11, 2009. The Rights are not
exercisable until a Distribution Date (as defined in the Rights
Agreement and triggered only if certain events occur), are not
detachable from the Company's Common Stock and do not give any
immediate value to stockholders. No certificates representing the
Rights will be issued at this time. Ten business days (or such
later time) after any person or group acquires (with certain
exceptions, the "Acquiring Person") 4.9% or more of the Company's
outstanding Common Stock (which includes for this purpose stock
referenced in derivative transactions and securities) or commences
or announces a tender offer for 4.9% or more of the Company's
outstanding Common Stock, the Rights will become exercisable upon
an affirmative determination by the Board. Thereafter, the Rights
will trade separately from the Company's Common Stock and have
separate certificates. Existing stockholders who currently own 4.9%
or more of the Company's Common Stock will only become an Acquiring
Person if they purchase additional shares of the Company's Common
Stock. In addition to other exceptions, a person shall not become
an Acquiring Person if such person acquired the shares of Common
Stock, directly or indirectly, pursuant to, or upon the exercise or
transfer of, a warrant or the underlying shares of Common Stock
where the warrant was issued by the Company upon approval by the
Board of Directors. Under certain circumstances, the Rights will be
modified so that each Right not owned by the Acquiring Person would
become exercisable for the number of shares of the Company's Common
Stock that at the time have a market value of two times the $16.00
exercise price of the Right. Shares of Preferred Stock purchasable
upon exercise of the Rights are, subject to the rights of any
senior Preferred Stock, entitled to dividend, liquidation and
voting rights 1,000 times those afforded one share of common stock.
Accordingly, the value of the one onethousandth of a share of
Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock. If there is no
charter amendment as described above and the expiration of the
Stockholder Rights Plan is not otherwise accelerated, the Rights
will expire on March 10, 2019 and may be redeemed by the Company
for one-tenth of one cent ($.001) per Right under certain
circumstances. At any time prior to the time an Acquiring Person
becomes such, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right.
Under certain circumstances, the Board of Directors may also redeem
each Right for one share of the Company's Common Stock. Until a
Right is exercised or exchanged, the holder thereof will have no
rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. About the
Company Deerfield Capital Corp., through its subsidiary, Deerfield
Capital Management LLC, manages client assets, including bank loans
and other corporate debt, residential mortgage backed securities
("RMBS"), government securities and asset-backed securities. In
addition, Deerfield Capital Corp. has a principal investing
portfolio comprised of fixed income investments, including bank
loans and other corporate debt and RMBS. NOTES TO PRESS RELEASE
Certain statements in this press release are forward-looking as
defined by the Private Securities Litigation Reform Act of 1995.
These include statements regarding future results or expectations.
Forward-looking statements can be identified by forward looking
language, including words such as "believes," "anticipates,"
"expects," "estimates," "intends," "may," "plans," "projects,"
"will" and similar expressions, or the negative of these words.
Such forward-looking statements are based on facts and conditions
as they exist at the time such statements are made. Forward-looking
statements are also based on predictions as to future facts and
conditions, the accurate prediction of which may be difficult and
involve the assessment of events beyond the control of Deerfield
Capital Corp. and its subsidiaries ("DFR"). Forward-looking
statements are further based on various operating assumptions.
Caution must be exercised in relying on forward-looking statements.
Due to known and unknown risks, actual results may differ
materially from expectations or projections. DFR does not undertake
any obligation to update any forward-looking statement, whether
written or oral, relating to matters discussed in this press
release, except as may be required by applicable securities laws.
Various factors could cause DFR's actual results and stated
outcomes to differ materially from those described in any
forward-looking statements. These factors include, but are not
limited to, the inability of the Stockholder Rights Plan to
dissuade an investor from effecting an "ownership change" by either
increasing or reducing their ownership of shares of DFR's common
stock; the potential loss of DFR's NOLs and NCLs notwithstanding
the implementation of the Stockholder's Rights Plan; the potential
negative impact a Stockholder's Rights Plan could have on takeover
efforts that would otherwise be beneficial to stockholders; DFR's
ability to forecast its tax attributes, which are based upon
various facts and assumptions; DFR's ability to protect and use its
NOLs and NCLs to offset taxable income; and DFR's ability to
generate taxable income in the future. These and other factors that
could cause DFR's actual results to differ materially from those
described in the forward-looking statements are set forth in DFR's
annual report on Form 10-K, as amended, for the year ended December
31, 2007, DFR's quarterly reports on Form 10-Q for the quarters
ended September 30, June 30 and March 31, 2008 and DFR's other
public filings with the SEC and public statements. Readers of this
press release are cautioned to consider these risks and
uncertainties and not to place undue reliance on any
forward-looking statements. For more information, please go to the
company website at http://www.deerfieldcapital.com/ DATASOURCE:
Deerfield Capital Corp. CONTACT: Frank P. Straub, Chief Financial
Officer of Deerfield Capital Corp., +1-773-380-6636; or Analysts,
Leslie Loyet of Financial Relations Board, +1-312-640-6672, for
Deerfield Capital Corp. Web Site: http://www.deerfieldcapital.com/
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