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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): October 12, 1995
MAJOR REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-1748 590898509
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(Commission File Number) (IRS Employer Identification No.)
5728 Major Boulevard, Suite 306, Orlando, Florida 32819
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (407) 351-1111
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ITEM 5. OTHER EVENTS
A. Intention to Seek Merger Partner. On October 12, 1995, the Major
Realty Corporation (the "Company") announced that its Board of Directors had
determined that it was in the best interests of the shareholders to seek a
merger partner or otherwise seek a transaction for the sale of the Company.
David L. Treadwell, Chairman of the Company, cited capital constraints limiting
the feasibility of independently developing the Company's existing properties
as a primary factor in the Board's decision to seek a merger or sale
transaction.
B. Consolidation of Debt. On October 18, 1995, the Company entered
into a debt restructuring agreement with Acceptance Insurance Companies Inc.
("Acceptance"), for the Company's $5,064,144 debt to such lender. Immediately
prior to this restructuring, Acceptance acquired from PNC Bank, Kentucky, Inc.
("PNC") a Mortgage Note made by the Company with an outstanding balance of
approximately $4,316,831, a mortgage securing the note and other associated
loan documents. The Company's indebtedness to PNC was due on January 31, 1996.
The Company's debt to Acceptance prior to the transaction was approximately
$747,000, and the maturity of such debt was January 31, 1996.
The interest rate on the restructured loan is prime plus 1.5%, and
interest is payable quarterly in arrears. The maturity of the loan is May 1,
1998, unless there is a change in control prior to such time, in which event
the maturity of the loan will be accelerated. The Company's indebtedness to
Acceptance is secured by a first mortgage on substantially all of the Company's
property, including the certain notes and mortgages payable to the Company from
third parties. The restructured loan extended the maturity date of the
Company's debt, reduced the net interest cost thereon and improved the
Company's cash flow through the elimination of the PNC interest reserve. Mr.
Treadwell stated that the debt restructuring would allow the Company greater
flexibility in its operations and in its plan to seek a merger partner or sale
transaction.
C. Settlement of Litigation. On October 20, 1995, the Company
announced that it had settled litigation relating to a condominium project in
Orlando, Florida, The Townes of Southgate, developed by Major Development
Company ("MDC"), a wholly-owned, now dissolved, subsidiary of the Company.
The condominium association sought damages in excess of $1.5 million
relating to defects in the construction of the project, together with interest,
costs and attorneys fees, against the Company, MDC, and the individual members
of MDC's last board of directors. Under the terms of the settlement agreement
approved by the Circuit Court for Orange County, Florida, the Company agreed,
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without acknowledging any liability, to make installment payments totalling
$596,000 to the plaintiff. The Company previously had accrued reserves for a
substantial portion of the settlement amount, and the net financial impact on
the Company is expected to be less than $100,000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Major Realty Corporation has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
MAJOR REALTY CORPORATION
By: /s/ David L. Treadwell
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David L. Treadwell
Chairman and CEO
October 20, 1995
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Date
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