SOURCE: Tarragon Corporation

September 07, 2007 12:53 ET

Tarragon Corporation Closes $69.25 Million Property Sale and Reaches Understanding With Largest Creditor for Reinstatement of Over $550 Million of Loans

NEW YORK, NY--(Marketwire - September 7, 2007) - Tarragon Corporation (NASDAQ: TARR) today announced that it has closed the sales of two of its Florida rental properties for $69.25 million and that it has reached agreement with its largest creditor, General Electric Capital Corporation (GECC), on the terms, which Tarragon expects to be satisfied early next week, under which GECC will reinstate all loans that it has made to Tarragon and/or its affiliates.

The proceeds from the sale of the two Florida properties have allowed Tarragon to satisfy approximately $50 million of outstanding indebtedness, bring current all debt service that had been owed to GECC and to establish certain cash and other reserves. Further, in addition to the property sales announced today, Tarragon also has accepted offers or entered into contracts to sell additional properties in Florida and Tennessee over the next 30 days. Such sales, if completed, would generate approximately $35 million in net proceeds while reducing Tarragon's outstanding debt by about $270 million.

The Florida property sales, agreement with GECC and the above-referenced property sales are part of an overall Tarragon plan designed to restore liquidity and improve its financial condition. As part of this plan, Tarragon is in discussions with other significant lenders. As described above, the plan currently contemplates additional property sales, the proceeds of which would be used to repay or bring current Tarragon's obligations under other loan agreements and to provide Tarragon with additional liquidity.

There can be no assurance, however, that the contemplated property sales will be completed on acceptable terms or in a timely manner, that Tarragon will complete its agreement with GECC or that it will be able to reach agreements with other lenders. If not, it may be necessary for Tarragon to undertake such other actions as may be appropriate in the light of its current liquidity situation.

About Tarragon Corporation

Tarragon Corporation is a leading developer of multifamily housing for rent and for sale. Tarragon's operations are concentrated in the Northeast, Florida, Texas and Tennessee. To learn more about Tarragon Corporation, visit: www.tarragoncorp.com.

Forward-looking Statements

Information in this press release includes "forward-looking statements" made pursuant of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "intends," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements, which include statements regarding the expected net proceeds of currently contemplated property sales, the equity value in Tarragon's real estate portfolio and development platform, Tarragon's financial condition and short-term liquidity needs and strategic and financial alternatives that may be pursued by, or available to, Tarragon. Actual results and the timing of certain events could differ materially from those projected or contemplated by these forward-looking statements due to a number of factors, including Tarragon's ability to complete currently contemplated property sales on acceptable terms and conditions and to identify suitable strategic or financial alternatives in the near-term, the results of negotiations with Tarragon's lenders and other creditors, conditions in the homebuilding industry, the residential real estate and mortgage markets and the capital and financial markets generally, general economic conditions, interest rates and other risk factors outlined in Tarragon's SEC reports, including its Annual Report on Form 10-K. Tarragon assumes no responsibility to update forward-looking information contained herein.

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Contact Information

  • Contacts:

    Broadgate Consultants, LLC
    Alan H. Oshiki
    (212) 232-2222
    Email Contact

    Tarragon Corporation
    William S. Friedman
    (212) 949-5000
    Email Contact