UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.04. | Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. |
On January 3, 2025, The InterGroup Corporation (the “Issuer” or the “Company”) was made aware of a Notice of Termination Event (the “Notice”) issued to Justice Operating Company, LLC (“Justice” or “Borrower”), which is the wholly owned subsidiary of Portsmouth Square, Inc. and received by Justice as of that date. The Notice states that the $97 million principal amount in loans made to Justice by various institutional lenders, known as Loan No.: M300801016 / Reference No.: SS57524 and Loan No.: M300801015 / Reference No.: SS57523, a termination event has occurred as a result of Borrower’s failure to pay Lender the entire debt on or before the Forbearance Expiration date of January 1, 2025 under the Forbearance Agreement (the “Forbearance”) dated April 29, 2024. Accordingly, the forbearance as granted by Lender under the Forbearance Agreement has terminated. The Notice states that the lenders shall immediately be entitled to exercise any of the Lender’s rights and remedies under the Forbearance Agreement and the Loan Documents, in equity or at law. The Lender’s rights as a result of such termination, include, but are not limited to, acceleration of the loans, foreclosure on collateral and other rights and remedies under the loan documents and otherwise available under law. The Company cannot predict if or when the Lender will exercise any of these rights and remedies. In an effort to refinance the Hotel’s aforementioned debt, in May 2024, Justice entered into a financing procurement agreement with a global provider of financial advisory services to real estate owners; however, refinancing the company’s hotel debt has been extremely challenging due to obstacles beyond the Company’s control. Justice will endeavor to refinance the aforementioned loans as soon as possible or seek alternative solutions to resolve this situation. Additionally, in October 2024, Justice entered into an agreement with Hart Advisors Group LLC (“Hart”) to assist the Company in the negotiations of loan modifications for its senior and mezzanine loans with maturity date of January 1, 2025. Justice and its mezzanine lender PCCP have submitted proposed loan modification terms to the senior lender’s special servicer LNR Partners, LLC and other parties that are part of the loan. There is no assurance that any negotiations will be resolved in favor of Justice nor do these negotiations in any way limit the lenders’ rights. As of the date of this filing, the outstanding principal and accrued interest, including default interest for senior and mezzanine loans are approximately $78,640,922 and $27,501,893, respectively.
| ITEM 9.01 | EXHIBITS | |
| 104 | Cover Page Interactive Data File |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE INTERGROUP CORPORATION | ||
| Dated: January 10, 2025 | By: | /s/ John V. Winfield |
| Chairman of the Board; President and Chief Executive Officer | ||