JER Investors Trust Inc. Reports Recent Developments
October 13 2011 - 9:42AM
Business Wire
JER Investors Trust Inc. (“JERIT”) (Pink Sheets: JERT.PK) today
summarized for its shareholders the following recent
developments:
- From the time of its initial public
offering of shares, JERIT was externally managed by JER Commercial
Debt Advisers LLC. That manager has been replaced with effect from
August 30, 2011. JERIT’s new external manager is C-III JERIT
Manager LLC (the “New Manager”), and JERIT and the New Manager
entered into an amended and restated management agreement on August
30. 2011. The terms of the amended and restated management
agreement are substantially the same as the terms of the previous
management agreement between JERIT and JER Commercial Debt
Advisers.
- The composition of JERIT’s board of
directors has changed. With effect from August 30, 2011, JERIT’s
board of directors consists of Joseph Lytle, Lawrence Block and
Steve Bartlett.
- JERIT’s officers have changed. With
effect from August 30, 2011, JERIT has the following officers:
Lawrence Block
President Robert Phillips Treasurer William Jarrard, Jr. Vice
President Jenna Unell Secretary Yvonne Owens Assistant Secretary
- The New Manager is an indirect
subsidiary of C-III Capital Partners LLC (“C-III”). Joseph Lytle,
Robert Phillips and Jenna Unell are employees of C-III. Lawrence
Block, William Jarrard and Yvonne Owens are employees of Island
Capital Group LLC, which indirectly controls C-III. More
information about C-III is provided below.
- These changes to JERIT’s management
were effected in connection with a transaction in which C-III
purchased the commercial real estate special servicing and
collateralized debt obligation (“CDO”) management businesses
previously operated by J.E. Robert Company, Inc. (“JER”) and its
affiliates. As a result of that transaction, affiliates of C-III
have taken over the special servicing (previously performed by JER)
of loans collateralizing various commercial mortgage-backed
securities (“CMBS”) owned by two subsidiaries of JERIT that have
issued CDOs, as well as collateral administration of those CDO
entities.
- In connection with the transaction
described above, C-III purchased the rights of National Australia
Bank Limited (“NAB”) under a judgment entered against JERIT in
August 2011 in the amount of $29,004,598. That judgment relates to
JERIT’s defaulted obligations under an interest rate swap. That
default, and JERIT’s resulting obligation to NAB, were described in
the Annual Report on Form 10-K filed by JERIT with the Securities
and Exchange Commission on December 17, 2010.
- C-III and its affiliates will face
potential conflicts of interest in respect of their respective new
relationships with JERIT that are similar in many respects to the
conflicts of interest that previously affected the relationships
among JERIT, JER and JER’s affiliates. C-III also will face a
conflict of interest in deciding whether, and if so how, to enforce
its rights under the judgment it purchased from NAB. JERIT does not
have sufficient funds available to it to pay that judgment.
About C-III
C-III Capital Partners LLC is a leading commercial real estate
services company engaged in a broad range of activities, including
primary and special loan servicing, loan origination, fund
management and principal investment. The company’s principal place
of business is located in Irving, TX, and it has additional offices
in New York, South Carolina, Tennessee, Illinois and Virginia.
C-III Asset Management LLC, a wholly-owned subsidiary of C-III
Capital Partners LLC, is a highly rated servicer (primary and
special) of commercial real estate loans. Its clients include
issuers of CMBS and CDOs, institutional lenders and other
investors. C-III Asset Management LLC is rated “CPS 2-” by Fitch
and “Above Average” by Standard & Poor’s as a primary servicer,
and is one of the highest rated special servicers in the industry
with ratings of “CSS 1-” by Fitch and “Strong” by Standard &
Poor’s. For more information, visit www.c3cp.com.
About JERIT
JER Investors Trust Inc. is a specialty finance company that was
organized primarily to originate and acquire real estate debt
securities and loans and fee interests in net leased real estate
assets. JERIT is externally managed and therefore depends on its
manager (now C-III JERIT Manager LLC) to manage its portfolio of
commercial real estate structured finance investments and other
real estate related investments. JERIT’s investment portfolio
includes commercial real estate structured finance products such as
CMBS, mezzanine loans and participations in whole mortgage loans.
JERIT is organized and conducts its operations in a manner intended
to allow it to qualify as a real estate investment trust (REIT) for
federal income tax purposes.
Since at least the second half of 2007, JERIT has experienced
significant operating difficulties and liquidity issues. The
transactions described above between C-III and JER did not involve
any change in the capitalization of JERIT or result in any
improvement in JERIT’s financial condition or liquidity
position.
As previously reported, JERIT’s shares no longer are registered
under the Securities Exchange Act of 1934, and as a result JERIT no
longer is subject to the periodic reporting or other obligations
under that Act.
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