UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
April 10,
2006
DATE
OF REPORT (DATE OF EARLIEST EVENT REPORTED)
Commission
File No. 1-11775
TIMCO AVIATION SERVICES, INC.
(Exact Name Of Registrant As Specified In Its Charter)
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Delaware
(State Or Other Jurisdiction Of
Incorporation Or Organization)
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65-0665658
(IRS Employer
Identification No.) |
623 Radar Road
Greensboro, North Carolina 27410
(Address Of Principal Executive Offices)
(336) 668-4410 (x8010)
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01 Other Events
On April 10, 2006, the Company entered into an Assignment and Acceptance Agreement (“Agreement”)
with Monroe Investments, Inc., Monroe Capital Advisors LLC, and Fortress Credit Opportunities I LP
(collectively, “Monroe”), as assignors, and LJH, Ltd. (“LJH”), as assignee. Pursuant to the
Agreement, the debt due from the Company to Monroe was transferred to LJH. A copy of the Agreement
is attached as Exhibit 10.1 to this Form 8-K, and this summary of the Agreement is qualified in its
entirety by the terms of the Agreement.
On April 13, 2006, the Company issued a press release, a copy of which is attached as Exhibit 99.1
to this Form 8-K. In the press release, the Company reported on certain matters, including: (i) the
Company’s results of operations for fiscal 2005; (ii) that as a result of the Company’s net loss
for fiscal 2005, the Company is in violation of certain financial covenants contained in the credit
agreements relating to the Company’s senior debt owed to CIT Group/Business Credit (“CIT”) and the
Company’s senior debt owed to Monroe (now LJH); (iii) that the Company is currently in negotiations
with CIT and LJH to resolve the defaults arising as a result of the above-described covenant
violations; (iv) that LJH has advised the Company that it is prepared to resolve the defaults with
respect to the Monroe debt, reduce the interest rate and fees associated with the Monroe credit
facility and make available to the Company through the Monroe credit facility an additional $6
million of funding; and (v) that in return, LJH is requesting that: (A) the Company sell 2.4
million shares of the Company’s authorized but unissued common stock to a newly formed entity, TAS
Holding, Inc. (“TAS”) for $2.50 per share (TAS is an entity organized by LJH which, together with
certain affiliates of Owl Creek Asset Management, L.P. (“Owl Creek”), today collectively owns 89.2%
of the Company’s currently outstanding common stock); and (B) the Company agree to merge with TAS
in a transaction in which the stockholders of the Company (other than LJH and Owl Creek) will
receive cash consideration for their shares. The press release also reported that LJH’s proposal is
contingent on the Company reaching an agreement with CIT to resolve the financial covenant defaults
under the CIT credit facility.
As set forth in the press release, in order to properly consider LJH’s proposal, the Company’s
Board of Directors has organized a Special Committee to act on behalf of the Company in its
negotiations with LJH and Owl Creek. Such negotiations are ongoing. However, based on negotiations
to date, if the proposed merger is completed, it is currently expected that the stockholders (other
than LJH and Owl Creek) will receive cash consideration for their shares of $4.00 per share,
without interest.
As stated in the press release, the Company believes that all of these negotiations will result in
the execution of definitive agreements. However, there can be no assurance that these negotiations
will result in definitive agreements on the terms described above or at all. Failure of the Company
to reach definitive agreements with respect to resolving the covenant defaults issues described
above will likely have a material adverse effect on the Company.
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