Files Suit against Lone Star for Specific Performance
Accredited Home Lenders Holding Co ("Accredited" or "Company") announced today (August 13) that it has filed a lawsuit against Lone Star Fund V (U.S.), L.P. and two of its affiliates ("Lone Star") seeking specific performance of Lone Star's obligations to close Lone Star's tender offer for the outstanding common stock of Accredited and to complete the merger with Accredited.
In an August 10, 2007 filing with the Securities and Exchange Commission ("SEC"), Lone Star alleged that Accredited would fail to satisfy the conditions to the closing of the tender offer. The SEC filing also stated that Lone Star did not expect to accept Accredited shares tendered as of the end of the current offer period ending at 12:00 midnight, Eastern time, on August 14, 2007.
As previously announced, assuming more than 50% of Accredited's outstanding shares are tendered by the expiration of the current offer period on August 14, 2007, the Company believes that all conditions to closing of the tender offer will have then been satisfied. The Agreement and Plan of Merger between Accredited and Lone Star (the "Agreement") expressly provides that changes generally affecting the non-prime industry in which the Company operates which have not disproportionately affected the Company do not provide a basis for Lone Star to fail to honor its obligations. Further, the Agreement expressly provides that Lone Star may not refuse to honor its obligations based on any deterioration in the business, results of operations, financial condition, liquidity, stockholders' equity and/or prospects of the Company substantially resulting from circumstances or conditions existing as of the date that the Agreement was signed that were generally publicly known as of such date or that had been previously disclosed by the Company to Lone Star. Accordingly, Accredited has filed this lawsuit to hold Lone Star to its obligations, and to hold it fully responsible for any damages caused by its failure to satisfy those obligations.
Accredited's Board of Directors' unanimous recommendation of the Lone Star transaction to stockholders remains unchanged, and the Company encourages all stockholders to tender their shares prior to the current tender expiration deadline of 12:00 midnight, Eastern time, on August 14, 2007.
Accredited further announced that neither Lone Star's filing indicating its intent not to close the tender nor its actual failure to close the tender offer does or will constitute an event of default under any of the Company's warehouse facilities. Additionally, the Company has communicated with each of the warehouse credit providers and plans to continue to fund its mortgage loan originations. As previously disclosed, Accredited maintains committed warehouse facilities with a total capacity of $1.6 billion for U.S. loan originations and $150 million Canadian for Canada loan originations. Accredited remains open for business and is continuing to operate in the normal course and to fund mortgage loans in both the U.S. and Canada. -Accredited Home Lenders Holding Co.
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