UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549 

FORM 8-K 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 23, 2020 

RAIT Financial Trust

(Exact name of registrant as specified in its charter)

Two Logan Square

100 N. 18^th St., 23^rd Floor

Philadelphia, Pennsylvania 19103

Former name or former address, if changed since last report

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 (see General Instruction A.2. below):

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 3.03. Material Modification of Rights of Security Holders

Item 5.01. Changes in Control of Registrant

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item 8.01. Other Events.

As previously disclosed:

On March 27, 2020 (the “Effective Date”), (i) the Debtors filed the Notice of (A) Entry of Findings of Fact, Conclusions of Law, and Order Confirming Chapter 11 Plan of Liquidation, (B) Effective Date, and (C) Related Bar Dates (the “Notice of Effective Date”), (ii) the Plan became effective, and (iii) pursuant to the Plan, all of RAIT’s outstanding securities (the “Securities”) were cancelled and extinguished. RAIT will file a Form 15 under Rules 12g-4(a)(1) and Rule 12h-3(b)(1)(i) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), terminating and/or suspending the registration of the Securities under Section 12(g) and/or Section 15(d) of the Exchange Act.  After filing the Form 15, RAIT does not expect to make further filings on reports with the Securities and Exchange Commission (the “Commission”).   The Notice of Effective Date is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

As previously disclosed, in accordance with the Plan, on the Effective Date, (i) Lyle Bauck of M-III Advisory Partners LP was appointed as the Plan Administrator, with the same authority as RAIT’s Board of Trustees (the “Board”) and

officers, (ii) the authority and incumbency of the current members of the Board and officers of RAIT terminated, and (iii) all certificates of formation, membership agreements, and related documents were deemed amended by the Plan to permit and authorize the same.

The foregoing descriptions of the Plan and the Confirmation Order do not purport to be complete and are qualified in their entity by Exhibits 2.1, 2.2 and 2.3 to RAIT’s Current Report on Form 8-K, filed with the Commission on January 31, 2020.  

Following the Effective Date, the Debtors will not have any ongoing business operations except as necessary to wind up its business and affairs and distribute its assets in accordance with the Plan.

In connection therewith, on March 23, 2020, RAIT entered into a Severance Agreement and General Release with each of John J. Reyle, Chief Executive Officer, President and General Counsel, and Alfred J. Dilmore, Chief Financial Officer and Treasurer (the “Severance Agreements”).  The Severance Agreements, among other things, provided Messrs. Reyle and Dilmore with severance payments of $523,500 and $348,500, respectively, and released each of them from the non-compete provisions contained in their respective employment agreements.  Furthermore, the Severance Agreements contained a general release of claims by Messrs. Reyle and Dilmore in favor of RAIT.  The foregoing descriptions of the Severance Agreements do not purport to be complete and are qualified in their entirety by Exhibits 10.1 and 10.2 to this Current Report on Form 8-K.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act.  These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “potential,” “should,” “will,” “plans,” “continuing,” “ongoing,” “expects,” “intends to,” and similar words or phrases.  Although RAIT believes that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties that are subject to change based on various important factors, some of which are beyond our control. Such forward-looking statements include, but are not limited to, statements related to the transactions contemplated by the Plan. These risks, uncertainties and contingencies include, but are not limited to, (i) risks associated with third-party motions in the Chapter 11 Cases; and (ii) increased legal, advisor and other costs related to the Chapter 11 Cases and other litigation and the inherent risks involved in a bankruptcy process. For additional discussion of these risks, refer to the section entitled “Risk Factors” and elsewhere in the RAIT’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Commission on March 26, 2019, Amendment No. 1 to RAIT’s Annual Report on Form 10-K/A for the year ended December 31, 2018, filed with the Commission on April 30, 2019, RAIT’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, filed with the Commission on November 7, 2019 and RAIT’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, filed with the Commission on November 7, 2019. In light of the significant uncertainties inherent in any forward-looking information included herein, the inclusion of such information should not be regarded as a representation by RAIT or any other person that RAIT’s expectations, objectives or plans will be achieved in the timeframe anticipated or at all. RAIT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law. All forward-looking statements attributable to RAIT are expressly qualified by these cautionary statements.

Item 9.01 Financial Statements and Exhibits. 

(d)Exhibits.

The following exhibits are included as part of this report:

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.