Cascade Bancorp (Oregon) Announces Securities Purchase Agreements Extended With Private Party Investors. Also Files Suit Against Cohen & Company Financial Management, LLC For Breach Of Contract
BEND, Ore., Aug. 2 /PRNewswire-FirstCall/ -- Cascade Bancorp ("Cascade") (Nasdaq: CACB) announced today that it has entered into an agreement with each of David F. Bolger ("Mr. Bolger") and an affiliate of Lightyear Fund II, L.P. ("Lightyear") amending the Securities Purchase Agreements between the Company and Mr. Bolger and the Company and Lightyear dated October 29, 2009, as amended February 16, 2010, June 1, 2010 and June 30, 2010 and July 15, 2010 (the "Securities Purchase Agreements") to extend their conditional commitments to August 31, 2010.
CEO Patricia L. Moss commented, "We are appreciative of the continued support and confidence demonstrated by Lightyear and Mr. Bolger. We are encouraged by the opportunities for our Company as we remain focused on our efforts to raise the additional capital required to consummate the transactions under the Securities Purchase Agreements."
Per the new agreement, the extended date by which conditions of closing must be satisfied is now August 31, 2010. The sales to Mr. Bolger and to Lightyear are conditioned upon the Company's simultaneous sale of shares of its common stock in additional private placements to other investors under separate written agreements such that the total net proceeds from the offerings is at least $150 million, in addition to the other closing conditions set forth in each of the Securities Purchase Agreements.
Cascade also announced it has filed a complaint against Cohen & Company Financial Management, LLC ("Cohen Financial"). The claims arise from the failure of Cohen Financial to honor its obligations under an exchange agreement ("Agreement") entered into between Cohen Financial and Cascade in October, 2009. According to terms of the Agreement Cohen Financial would transfer to Cascade the $66,500,000 of trust preferred securities it had caused to be issued by four Delaware statutory trusts in exchange for $13,300,000 in redeemable notes that would be paid at the closing of a capital raise. The complaint alleges breach of contract, breach of the covenant of good faith and fair dealing, and tortious interference with business relations, and requests the Court's declaration that Cohen Financial is required to specifically perform the terms of the Agreement or, in the alternative, for its damages in an amount to be proven at trial, believed to be in excess of $227,200,000, and punitive damages in the sum of $200,000,000.In comment, Moss stated: "As of today, private equity investors stand ready and willing to make a capital commitment upon Cohen Financial honoring its obligation under the Agreement. A successful capital raise is integral to our company's future and we are taking the necessary steps with this complaint to ensure Cohen honors the Agreement in place. A successful capital raise will provide the capital required by the FDIC for the Bank to meet its obligations under our current regulatory order. It is in the best interests of our shareholders, company and community to demand that Cohen Financial perform to the terms of the Agreement."
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