United Development Funding III, L.P. (OTCMKTS:UNDVL) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement. |
As previously disclosed in a Current Report on Form 8-K filed
with the U.S. Securities and Exchange Commission on December 14,
2015, United Development Funding III, L.P., a Delaware limited
partnership (UDF III), was attacked by a hedge fund. UDF III
believes that the hedge fund provided false and misleading
information to government agencies and UDF IIIs accountants. This
attack disrupted UDF IIIs business and adversely impacted UDF
IIIs operations.
As a result of the above events, a planned transition of certain
development projects of Buffington Land Development, LLC, an
unaffiliated Texas limited liability company (Buffington Land
Development), to successor developers unaffiliated with UDF III
did not occur. Effective as of December 31, 2016, UDF III,
together with certain of its affiliates and subsidiaries, entered
into various assignments and a release agreement with Buffington
Land Development and certain of its affiliates and subsidiaries.
As a part of the transaction, UDF III and certain of its
subsidiaries entered into the following agreements:
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An Assignment and Assumption of Interests in BLD VOHL 6A-1, LLC, a Texas limited liability company that was a wholly-owned subsidiary of Buffington Land Development (VOHL), among Buffington Land Development, UDF III, United Development Funding IV, an affiliated Maryland real estate investment trust (UDF IV), United Development Funding, L.P., an affiliated Delaware limited partnership (UDF I), and LD Equity, LLC, a Texas limited liability company that is jointly owned by UDF III and UDF I (LD Equity). Under this assignment, Buffington Land Development conveyed 100% of the membership interests in VOHL to LD Equity. VOHL owns 6 finished residential lots and approximately 4.56 acres of land in Pflugerville, Travis County, Texas. UDF I, UDF III and UDF IV are lenders to VOHL. This assignment resulted in (i) $33,442,945 of forgiveness of indebtedness of Buffington Land Development associated with the loan balance jointly and severally owed by Buffington Land Development, VOHL and other subsidiaries and affiliates of Buffington Land Development to UDF I; and (ii) $122,117,682 of forgiveness of indebtedness of Buffington Land Development associated with the loan balance jointly and severally owed by Buffington Land Development, VOHL and other subsidiaries and affiliates of Buffington Land Development to UDF III. |
|
A special warranty deed from Buffington Land, Ltd., a Delaware limited partnership (Buffington Land), to VOHL, to which Buffington Land conveyed to VOHL the approximately 4.56 acres of land described above. |
This transaction may have a material adverse impact on UDF IIIs
financial statements.
to a Release Agreement effective as of December 31, 2016, the UDF
Parties (as defined below) and the Buffington Parties (as defined
below) released each other from any liabilities, causes of
action, claims, demands, allegations, wrongdoing, actionable
conduct, damages, injuries, losses, expenses and attorneys fees.
The UDF Parties include UDF IV, UDF III, UDF I, United
Development Funding X, L.P., United Residential Home Finance,
L.P., and their successors, assigns, and affiliates. The
Buffington Parties include Buffington Land Development,
Buffington Land, Buffington Land Group, Ltd., Buffington Capital
Holdings, L.L.C., and their successors, assigns, and affiliates.
The forgoing descriptions of the Assignment and Assumption of
Interests in VOHL, the special warranty deed from Buffington Land
and the Release Agreement do not purport to be complete and are
qualified in their entirety by reference to the Assignment and
Assumption of Interests, the special warranty deed and the
Release Agreement, which are filed as Exhibits 10.1, 10.2 and
10.3 to this Current Report on Form 8-K, which are incorporated
herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d)Exhibits
| 10.1 |
Assignment and Assumption of Interests (BLD VOHL 6A-1, LLC) by and among Buffington Land Development, LLC, LD Equity, LLC, United Development Funding, L.P., United Development Funding III, L.P. and United Development Funding IV, effective as of December 31, 2016. |
| 10.2 |
Special Warranty Deed from Buffington Land, Ltd., as grantor, to BLD VOHL 6A-1, LLC, as grantee. |
| 10.3 |
Release Agreement by and among United Development Funding, L.P., United Development Funding III, L.P., United Development Funding IV, United Development Funding X, L.P., United Residential Home Finance, L.P., Buffington Land Group, Ltd., Buffington Land, Ltd., Buffington Land Development, LLC and Buffington Capital Holdings, L.L.C., effective as of December 31, 2016. |
United Development Funding III, L.P. (OTCMKTS:UNDVL) Recent Trading Information
United Development Funding III, L.P. (OTCMKTS:UNDVL) closed its last trading session down -6.70 at 3.50 with 1,806 shares trading hands.
