Capital Crossing Preferred Corporation Receives Audit Report With Going Concern Explanation
23 Aprile 2009 - 5:11AM
PR Newswire (US)
NEW YORK, April 22 /PRNewswire-FirstCall/ -- Capital Crossing
Preferred Corporation (NASDAQ:CCPCN) (the "Company") announced
today that the audit report of its independent registered public
accounting firm, Ernst & Young, included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
2008 (the "Form 10-K"), while expressing an unqualified opinion
regarding the Company's audited financial statements, contained a
note from Ernst & Young that identified matters which raise
substantial doubt about the Company's ability to continue as a
going concern. This announcement is being made in compliance with
Nasdaq Marketplace Rule 5250(b)(2), which requires separate
disclosure of an audit opinion that contains a going concern
qualification. This announcement does not represent any changes or
amendment to the Company's 2008 financial statements or to the Form
10-K which was filed with the Securities and Exchange Commission on
April 15, 2009. As disclosed in the Form 10-K, at December 31,
2008, the Company had total assets of approximately $96 million,
including cash and cash equivalents of approximately $43.8 million,
and total liabilities of less than approximately $0.9 million.
However, as disclosed in the Form 10-K, on September 15, 2008,
Lehman Brothers Holdings Inc. ("Lehman Brothers"), parent company
of Lehman Brothers Bank, FSB ("Lehman Bank") and the ultimate
parent company of the Company, filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code. Further, Lehman Bank, the
owner of all of the common stock of the Company, is subject to a
Cease and Desist Order, dated January 26, 2009, and a Prompt
Corrective Action Directive, dated February 4, 2009, issued by the
Office of Thrift Supervision (the "OTS"), requiring Lehman Bank,
among other matters, to submit a capital restoration plan and a
liquidity management plan, and imposing restrictions on certain
activities of Lehman Bank and the Company. Ernst & Young
therefore noted in its audit report included in the From 10-K that
the bankruptcy of Lehman Brothers and the ability of the OTS to
regulate and restrict the business and operations of the Company,
in light of the Cease and Desist Order and the Prompt Corrective
Action Directive, raise substantial doubt about the Company's
ability to continue as a going concern. About Capital Crossing
Preferred Corporation. Capital Crossing Preferred Corporation
acquires and holds real estate assets consisting primarily of
mortgage assets secured by commercial and multi-family properties.
Lehman Bank is the sole holder of the Company's common stock. The
Company's 8.50% Non-Cumulative Exchangeable Preferred Stock, Series
D (the "Series D Preferred Stock"), is listed on The NASDAQ Stock
Market under the symbol "CCPCN". Forward-Looking Statements This
press release may contain certain statements that constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "believes," "estimates" and other similar
expressions or future or conditional verbs such as "will,"
"should," "would" and "could" are intended to identify such
forward-looking statements. These statements are not historical
facts, but instead represent the Company's current expectations,
plans or forecasts of its future results, growth opportunities,
business outlook, loan growth, credit losses, liquidity position
and other similar matters, including, but not limited to, the
ability to pay dividends with respect to the Series D Preferred
Stock, the consummation of the pending asset exchange, future bank
regulatory actions that may impact the Company and the effect of
the bankruptcy of Lehman Brothers on the Company. These statements
are not guarantees of future results or performance and involve
certain risks, uncertainties and assumptions that are difficult to
predict and often are beyond the Company's control. Actual outcomes
and results may differ materially from those expressed in, or
implied by, the Company's forward-looking statements. You should
not place undue reliance on any forward-looking statement and
should consider all uncertainties and risks, including, among other
things, the risks set forth under Item 1A. "Risk Factors" in the
Form 10-K, as well as those discussed in any of the Company's other
subsequent Securities and Exchange Commission filings.
Forward-looking statements speak only as of the date they are made,
and the Company undertakes no obligation to update any
forward-looking statement to reflect the impact of circumstances or
events that arise after the date the forward-looking statement was
made. Possible events or factors could cause results or performance
to differ materially from what is expressed in the Company's
forward-looking statements. Those possible events or factors
include, but are not limited to, those risk factors discussed under
Item 1A. "Risk Factors" in the Form 10-K, and the following:
limitations by regulatory authorities on the Company's ability to
implement its business plan and restrictions on its ability to pay
dividends; further regulatory limitations on the business of Lehman
Bank that are applicable to the Company; a decline, or a perceived
decline, in Lehman Bank's capital situation that could result in
the Series D Preferred Stock being subject to an automatic exchange
into preferred shares of Lehman Bank; a decline in Lehman Bank's
capital ratios below certain specified levels that could force
Lehman Bank to merge with or be acquired by another entity or begin
voluntary dissolution; failure of the Series D Preferred Stock to
remain listed on The NASDAQ Stock Market or to otherwise continue
to trade on The NASDAQ Stock Market; failure of the Series D
Preferred Stock to otherwise retain value and/or liquidity; the
risk that the Company may not have adequate cash available to
continue to pay dividends with respect to the Series D Preferred
Stock; consummation of the pending asset exchange may result in the
Company owning a portfolio of residential mortgage loans that do
not perform as well as its current portfolio; negative economic
conditions that adversely affect the general economy, housing
prices, the job market, consumer confidence and spending habits
which may affect, among other things, the credit quality of the
Company's loan portfolios (the degree of the impact of which is
dependent upon the duration and severity of these conditions); the
level and volatility of interest rates; changes in consumer,
investor and counterparty confidence in, and the related impact on,
financial markets and institutions; legislative and regulatory
actions which may adversely affect the Company's business and
economic conditions as a whole; the impact of litigation and
regulatory investigations; various monetary and fiscal policies and
regulations; changes in accounting standards, rules and
interpretations and the impact on the Company's financial
statements; and changes in the nature and quality of the types of
loans held by the Company. DATASOURCE: Capital Crossing Preferred
Corporation CONTACT: Deborah Munies, +1-973-261-1961
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