Owens Realty Mortgage’s Repurchase and Settlement Agreement with Freestone Capital Management


Vinson & Elkins advised Owens Realty Mortgage, Inc. in its negotiation of a settlement agreement and repurchase of shares held by Freestone Capital Management, LLC.

Owens Realty Mortgage, Inc. has entered into an agreement with Freestone Capital Management, LLC and certain of its affiliates to repurchase the 810,937 shares of the Company’s common stock beneficially owned by Freestone. The Company agreed to repurchase the shares for $19.25 per share in a private, accretive transaction representing more than a 10% discount to the $22.12 per share GAAP book value of the Company’s common stock as of September 30, 2017.

The aggregate purchase price was $15,610,537.25, approximately $4.1 million of which was paid with the remaining balance of the Company’s $10 million stock repurchase plan previously announced on June 13, 2017. As a result of the shares already repurchased in the open market and the repurchase from Freestone, the Company’s repurchase plan, which had been set to expire on January 15, 2018, has been terminated.

The repurchase represents a reduction of approximately 8 percent of the 10,041,938 shares outstanding on November 3, 2017, as reported in the Company’s most recently filed Form 10-Q. As of December 29, 2017, the Company has repurchased approximately $31.5 million of its stock, not including commissions and fees, representing approximately 1,961,000 shares or 17.5 percent of the shares outstanding on May 20, 2013, at an average price of $16.06 per share.

The V&E team was led by Kai Liekefett (Picture), Greg Cope and Shaun Mathew, with assistance from associates Katherine Chen and Kathy Wang.

Involved fees earner: Kai Haakon Liekefett – Vinson & Elkins LLP; Shaun Mathew – Vinson & Elkins LLP; Katherine Chen – Vinson & Elkins LLP; Ting Wang – Vinson & Elkins LLP; Gregory Cope – Vinson & Elkins LLP;

Law Firms: Vinson & Elkins LLP;

Clients: Owens Realty Mortgage, Inc. ;

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Author: Ambrogio Visconti