RESTON, VA, Sep 04, 2008 (MARKET WIRE via COMTEX News Network) -- Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) and certain of
its subsidiaries (collectively "Comstock" or the "Company") today
announced that it had entered into a forbearance and conditional
release agreement ("Agreement") with Regions Bank ("Regions") with
respect to approximately $5.3 million of the Company's $144.0 million
of secured debt as of June 30, 2008. Under the terms of the
Agreement, the Company agreed to cooperate with Regions with respect
to its foreclosure on certain of the Company's real estate assets in
Georgia and Regions agreed to provide the Company a full release from
its obligations with no deficiency liability post-foreclosure. The
foreclosure agreement covers three properties in Atlanta, Georgia.
"The agreement we entered into with Regions today is the result of
our continued focus on restructuring a significant portion of our debt
and positioning Comstock to survive the current downturn in housing,"
said Christopher Clemente, Comstock's Chairman and Chief Executive
Officer. "We are satisfied with the outcome of our negotiation with
Regions and believe it is another important step in our plan to
reposition our company to meet the challenges of the current market.
While we have more work to do in this regard with certain other
lenders, the Regions agreement, along with the recently announced
similar agreement with BB&T, are in keeping with our objective. We
remain optimistic regarding the potential for a positive outcome of
our restructuring efforts."
Under the terms of the agreement the Company will be formally
released from its obligations to Regions at the earlier of December
15, 2008 or the successful foreclosure by Regions on lots and/or
speculative homes at Post Road II, Highland Station and James Road.
The Company announced that in anticipation of this agreement it had
recorded impairment charges related to the Regions collateral in the
quarter ending June 30, 2008 and as a result the Company does not
anticipate any material future write-offs as a result of the
Agreement or the foreclosures.
About Comstock Homebuilding Companies, Inc.
Established in 1985, Comstock Homebuilding Companies, Inc. is a
publically traded, diversified real estate development firm with a
focus on affordably priced for-sale residential products. Comstock
builds and markets single-family homes, townhouses, mid-rise
condominiums, high-rise condominiums, mixed-use urban communities and
active adult communities. The company currently markets its products
under the Comstock Homes brand in the Washington, D.C.; Raleigh,
North Carolina; and Atlanta, Georgia metropolitan areas. Comstock
Homebuilding Companies Inc. trades on Nasdaq under the symbol CHCI.
For more information on the Company or it projects please visit
www.comstockhomebuilding.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking" statements that are made
pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties that may cause actual
future results to differ materially from those projected or
contemplated in the forward-looking statements. Additional
information concerning these and other important risks and
uncertainties can be found under the heading "Risk Factors" in the
Company's most recent form 10-K, as filed with the Securities and
Exchange Commission on March 24, 2008. Comstock specifically disclaims
any obligation to update or revise any forward-looking statements,
whether as a result of new information, future developments or
otherwise.
Contact:
Bruce Labovitz
Email Contact
703.230.1131
SOURCE: Comstock Homebuilding Companies, Inc.
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