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| ADVNA > SEC Filings for ADVNA > Form 8-K on 9-Nov-2009 | All Recent SEC Filings |
9-Nov-2009
Bankruptcy or Receivership, Triggering Events That Accelerate or Increase a Direct F
On November 8, 2009, Advanta Corp. (the "Company") and certain of its subsidiaries (the "Filing Subsidiaries," and together with the Company, the "Debtors") filed voluntary petitions for relief (the "Bankruptcy Filing") under chapter 11 of title 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the State of Delaware (the "Bankruptcy Court") case number 09-13931. Advanta Bank Corp. and certain other subsidiaries of the Company (collectively, the "Non-Filing Entities") were not part of the Bankruptcy Filing. The Debtors will continue to operate their businesses in the ordinary course of business as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Non-Filing Entities will continue to operate in the ordinary course of business. A copy of the press release announcing the Bankruptcy Filing is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The Debtors intend to use the reorganization process to maximize value to the Debtors' stakeholders. As a result of the Bankruptcy Filing, certain liabilities incurred by the Debtors prior to the Bankruptcy Filing are subject to compromise. The settlement amount of liabilities subject to compromise will be determined as part of the bankruptcy process.
The Bankruptcy Filing described in Item 1.03 above constituted an event of default with respect to the following debt instruments and triggers, or may trigger, repayment obligations under the terms of certain instruments and agreements relating to direct financial obligations of the Company as set forth below (the "Debt Documents"):
? Senior Trust Indenture, dated as of October 23, 1995, by and among Advanta Corp. and The Bank of New York Mellon, as successor trustee (the "Senior Trust Indenture") with respect to approximately $138,000,000 of principal and accrued and unpaid interest on outstanding debt securities in the form of retail Investment Notes and RediReserve Certificates; and
? Indenture dated as of December 17, 1996 by and among Advanta Corp.
and The Bank of New York Mellon, as successor trustee, (the
"Indenture") with respect to approximately $99,375,000 of principal
and accrued and unpaid interest on outstanding Series B Junior
Subordinated Debentures (the "Subordinated Debentures") that are
backing approximately $96,375,000 of principal and accrued and
unpaid interest on outstanding trust preferred securities issued to
third party investors by Advanta Capital Trust I (the "Capital
Securities") and that are governed by the Amended and Restated
Declaration of Trust of Advanta Capital Trust I dated December 17,
1996 (the "Declaration"). The Capital Securities are guaranteed by
Advanta Corp. pursuant to the Series B Capital Securities Guarantee
dated as of July 29, 1997 (the "Guarantee").
(d) Exhibits.
99.1 Press Release issued November 8, 2009.
This Form 8-K contains forward-looking statements that are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. The most significant among these risks and uncertainties
are: (i) the ability of the Company to continue as a going concern; (ii) the
Company's ability to obtain Bankruptcy Court approval with respect to motions in
the chapter 11 cases; (iii) the ability of the Company and its subsidiaries to
prosecute, develop and consummate one or more plans of reorganization with
respect to the chapter 11 cases; (iv) the effects of the Company's Bankruptcy
Filing on the Company and the interests of various creditors, equity holders and
other constituents; (v) Bankruptcy Court rulings in the chapter 11 cases and the
outcome of the cases in general; (vi) the length of time the Company will
operate under the chapter 11 cases; (vii) risks associated with third party
motions in the chapter 11 cases, which may interfere with the Company's ability
to develop and consummate one or more plans of reorganization once such plans
are developed; (viii) the potential adverse effects of the chapter 11
proceedings on the Company's liquidity or results of operations; (ix) the
ability to execute the Company's business and restructuring plan; (x) increased
legal costs related to the Bankruptcy Filing and other litigation; (xi) the
Company's ability to maintain contracts that are critical to its operation, to
obtain and maintain normal terms with customers, suppliers and service providers
and to retain key executives, managers and employees; (xii) the risk that
Advanta Bank Corp. will not be able to regain compliance with the capital levels
and ratios required by the Federal Deposit Insurance Corporation (the "FDIC");
(xiii) the risk that the FDIC will pursue further regulatory actions against
Advanta Bank Corp. The cautionary statements provided above are being made
pursuant to the provisions of the Private Securities Litigation Reform Act of
1995 (the "Act") and with the intention of obtaining the benefits of the "safe
harbor" provisions of the Act for any such forward-looking
information. Additional risks that may affect the Company's future performance
are detailed in the Company's filings with the Securities and Exchange
Commission, including its most recent Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q.
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