SOUTHMARK ANNOUNCES TERMS OF SETTLEMENT
SOUTHMARK ANNOUNCES TERMS OF SETTLEMENT DALLAS, Dec. 31 /PRNewswire/ -- Southmark Corporation (OTC) today
disclosed the terms of a comprehensive settlement of litigation with its former chairman and vice chairman, Gene E. Phillips and William S. Friedman and entities they control.
"This settlement will enable Southmark to collect considerable value for its creditors," commented Glen Adams, Southmark's chairman and president. Adams noted that the settlement provides for the resolution and extinguishment of all claims, causes of action, obligations and disputes among the parties. Pursuant to the settlement agreement, Southmark will receive $13.2 million to be paid in cash or Southmark's 12 percent secured, redeemable notes due 1997. The initial payment of $4.0 million is scheduled for Feb. 25, 1992, with an additional $4.0 million to be paid on May 1, 1992. The remaining balance of $5.2 million is to be paid in four payments scheduled through Aug. 27, 1994. Southmark will also receive a 19.2 percent limited partnership interest in the general partner of National Realty L.P. Phillips and Friedman have the right to repurchase the partnership interest from Southmark for $2.4 million within three years. The unpaid balance of the settlement amount will be secured by newly issued securities having a minimum market value of 130 percent to 145 percent of the unpaid balance and by the balance of the limited partnership interest in the general partner of National Realty L.P. not conveyed to Southmark. Southmark has agreed as part of the settlement to complete the transfer of its interest in Novus Nevada, Inc. and to convey 15 real estate properties and six mortgages. The assets to be transferred are comprised primarily of undeveloped land and certain multi-family residential properties subject to foreclosure actions in 1992. Southmark further noted that, in addition to the pledge of securities securing the payment to Southmark, Phillips and Friedman, American Realty Trust and Syntek West, Inc. each will execute and deliver separate, final, nonappealable judgments in favor of Southmark, each in the amount of $25 million. The executed judgments will be held by the United States Bankruptcy Clerk for the Northern District of Texas - Dallas Division. In the event of a default, Southmark is entitled to entry of those judgments and to recover from the parties an aggregate of $25 million, subject to reduction for any amounts previously paid. If the settlement obligations are met, the judgments will be returned to the defendants. Southmark Corporation, headquartered in Dallas, is engaged in the liquidation of assets in accordance with its court-approved plan of reorganization. -0- 12/31/91 /CONTACT: Charles B. Brewer, executive vice president of Southmark, 214-406-6775, or Susan A. Seiter of Susan Seiter Associates, 817-488-3142, for Southmark/ CO: Southmark Corporation ST: Texas IN: REA SU: SM -- NY022 -- 2826 12/31/91 12:28 EST
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|Date:||Dec 31, 1991|
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