Current Report Filing (8-k)
November 22 2017 - 9:17AM
Edgar (US Regulatory)
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): November 17, 2017
Patriot National, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
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001-36804
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46-4151376
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification Number)
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401 East Las Olas Boulevard, Suite 1650
Fort Lauderdale, Florida
(Address of Principal Executive Offices)
(954)
670-2900
(Registrants Telephone Number, Including Area Code)
Not Applicable
(Former
Name or Former Address, if Changed Since Last Report)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of
the Securities Exchange Act of
1934 (§240.12b-2 of
this chapter).
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act.
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Item 1.01.
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Entry into a Material Definitive Agreement.
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On November 17, 2017, Patriot National, Inc. (the
Company) obtained and entered into a Forbearance Agreement (the Forbearance Agreement) with the lenders party to that certain Financing Agreement, dated as of November 9, 2016, with Cerberus Business Finance, LLC
(Cerberus), as collateral agent and administrative agent, and the lenders party thereto (the Credit Agreement). The Company is currently in default of the Credit Agreement due to its failure to deliver timely financial
statements, its
non-payment
of interest due November 1, 2017 and its failure to comply with financial covenants.
Pursuant to the Forbearance Agreement, Cerberus and the lenders party thereto have agreed not to accelerate the maturity of the loans nor exercise their
related rights and remedies in relation to the defaults under the Credit Agreement until December 3, 2017, subject to certain limitations and conditions (the Forbearance Period). The Forbearance Agreement also contemplates that
Cerberus may make, in its sole and absolute discretion, advances of up to $4.0 million to the Company. There can be no assurance that the foregoing advance will be sufficient for the Company to sustain operations during or beyond the
Forbearance Period. In addition, effective July 15, 2017, the outstanding obligations and other amounts payable under the Credit Agreement and related loan documents (together with the Credit Agreement, the Loan Documents) accrue
interest at the contract rate otherwise applicable to such debt plus two (2.0) percent per annum. As required by the Forbearance Agreement, the Company has engaged a chief restructuring officer, and will engage an executive vice president of
finance. As long as the Forbearance Agreement is in effect, the Company will be required to comply with certain restrictive and affirmative obligations set forth in the Credit Agreement.
Upon termination or expiration of the Forbearance Period, Cerberus and/or the lenders party thereto shall be entitled to exercise any of their respective
rights and remedies under the Forbearance Agreement and/or the Loan Documents, or applicable law, including, without limitation, the right to enforce any and all of the liens on, and security interests in, the collateral described in the Loan
Documents and to accelerate the maturity of the loans under the Credit Agreement.
Item 2.05:
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Costs Associated with Exit or Disposal Activities.
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The information set forth below is incorporated by
reference into this Item 2.05.
The Companys largest customer, Guarantee Insurance Company (GIC), which
has historically accounted for approximately
60-70 percent
of the Companys business, consented to be placed into receivership on November 13, 2017. The Company has met with the Florida Office
of Insurance Regulation (the OIR) on various occasions, including most recently on November 20, 2017, seeking to obtain both payment for past services rendered to GIC and an agreement that would allow the Company to provide and
receive payment for future services while GIC is in receivership. However, based on the most recent meeting with the OIR and other authorities now engaged in respect of GIC, the Company does not believe these efforts will be successful. Accordingly,
a major portion of the Companys revenue and cash flow going forward will cease.
Based on the Companys deteriorating financial condition, and
in compliance with the Worker Adjustment and Retraining Notification Act, the Company has notified approximately 250 employees, representing approximately
one-third
of its workforce, of the immediate
termination of their employment. The Company is currently unable in good faith to make a determination of an estimate of the costs associated with the termination. The Company will file an amended Current Report upon determination of the estimate or
range of estimate of costs.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
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PATRIOT NATIONAL, INC.
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By:
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/s/ Gex F. Richardson
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Name:
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Gex F. Richardson
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Title:
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General Counsel and EVP of Administration
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Date: November 22, 2017