Contact Information: Contact: RRH Capital, Inc Costa Brava Partnership III L.P. Seth Hamot: 617-595-4405
Fremont General Corporation's Largest TOPrS Holders Urge Support for Signature's Plan of Reorganization
| Source: Costa Brava Partnership III L.P.
BOSTON, MA and CLEVELAND, OH--(Marketwire - February 16, 2010) - Seth W. Hamot and Howard
Amster announced today that solicitation materials are on their way to
creditors and shareholders of Fremont General Corporation ("Fremont"
or the "Company") (PINKSHEETS : FMNTQ ) containing balloting materials
from plan proponents for the reorganization of Fremont, which is currently
operating under Chapter 11 of the US Bankruptcy Code. Following careful
consideration of all plan alternatives, Mssrs. Hamot and Amster are backing
the Plan of Reorganization ("Signature Plan") being proposed by
Signature Group Holdings, LLC ("Signature"). Together with
affiliates they control, Mssrs. Hamot and Amster are believed to be,
respectively, the two largest holders of Fremont General's Trust Oriented
Preferred Securities ("TOPrS") (PINKSHEETS : FMNPQ ). In addition, James A.
McIntyre, Sr., Fremont General's CEO from its IPO in 1970 until his
retirement in 2004 and its largest shareholder, has also agreed to back the
Signature Plan. Mssrs. McIntryre, Hamot, and Amster and certain affiliates
have each agreed to be co-proponents of the Signature Plan.
The Signature Plan will utilize the asset base of the current Fremont
estate as a foundation for the creation of a broad based, high growth, and
solidly profitable commercial finance platform oriented toward the "middle
market" for corporate lending which is acutely needed under current market
conditions. Signature has an established track record, market presence,
and an experienced and accomplished team that can originate, structure and
manage a diversified portfolio that is expected to include asset-backed
commercial financings, special situations loans, distressed asset
investments. A key to Signature's ability to generate high returns while
avoiding credit losses has been its focus on mitigating risk with borrower
collateral. Seth Hamot explained: "After reviewing all the plans filed in
the case and speaking many times with the competing proponents, Howard and
I confidently support the Signature Plan. Many of the plans treated the
TOPrS almost identically, with a cash distribution close to the Effective
Date, a current pay note, and equity in the reorganized debtor. The
economics of the Signature Plan compared favorably to all others, as
Signature believes that with respect to shares purchased on the Effective
Date, it is paying more per share than any other proponent, buying more
shares than any other proponent, and is subscribing at a premium to current
trading values."
Mr. Hamot continued, "More importantly, we support Signature because of
their business plan and their skills. The business will focus on lending to
those firms most poorly served by other lenders at this point in the credit
cycle. This portfolio will generate a stable core of income that will be
shielded by Fremont's considerable base of net operating tax loss
carryforwards. Additionally, the skill sets and experiences of the
Signature management team are perfectly suited to that specific business
plan, and we think you'll agree when you review the disclosure statement.
We believe the debtor will have many fruitful years ahead of it after it
emerges from bankruptcy, with a strong prospect for both growing revenue
and profits, and a management team that has enough investment in the firm
to be well aligned with its shareholders. Our confidence in the Signature
business plan was an extremely important factor in our selection of a
partner since a significant component of our return is coming in the form
of shares in the reorganized Fremont."
Mr. Amster noted that under the Signature Plan both he and Mr. Hamot would
be joining the Board of Directors of the reorganized Fremont and that they
would become significant shareholders under the Signature Plan, which calls
for the TOPrS holders to receive 21 million shares of the reorganized
Company. He also noted that the Signature Plan provides for a Board of
seven Directors, who are expected to qualify as "independent" (under
requirements of the applicable securities laws and exchange regulations),
including John Nickoll, founder of Foothill Capital, and Robert Peiser, an
accomplished executive with multiple turnarounds to his credit, including
American Sugar. Five of the directors, including John Nickoll, Robert
Peiser, Larry Hochberg, Seth Hamot, and Howard Amster, have considerable
experience serving as Directors of publicly traded companies.
About Seth Hamot
Seth W. Hamot is the President at RRH Capital Management Inc., a special
situations investor based in Boston, and the manager of Costa Brava
Partnership III L.P. He has deep experience in turnarounds and corporate
governance having served as a director at numerous companies including
Bradley Pharmaceuticals, Telos, Orange 21, Tech Team Global, and CCA
industries, including as chairman and on audit and compensation committees.
About Howard Amster
Howard Amster is an accomplished investor that has over 40 years of
business and investing experience including significant experience in real
estate, the securities industry, and financial services. He is a major
investor in apartment properties. He is a member of the executive
committee of Horizon Group Properties where he is also the largest
shareholder. Amster is also a principal of Ramat Securities, Ltd and has
served on multiple corporate boards including those of four financial
institutions.
About Signature Group Holdings, LLC
Formed in 2004, Signature Group Holdings, LLC is a credit oriented special
situations investor with a track record of successfully acquiring,
originating and managing debt investments. Signature is a Plan Proponent
in the reorganization of Fremont General Corporation. Copies of the
Signature Disclosure Statement, Solicitation Letter, Plan of
Reorganization, and other information about Signature can be found on its
website www.SignatureGroupHoldings.com. Signature is headquartered in
Sherman Oaks, CA.
Cautionary Statements
This news release contains forward-looking information. Statements
contained in this news release relating to future results, events and
expectations are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements may involve known and unknown risks and other factors and
uncertainties which may cause the actual results to be materially different
from those expressed or implied by such statements. The Company does not
have any intention or obligation to update forward-looking statements
included in this press release after the date of this press release, except
as required by law.
No stock exchange or regulatory authority has approved or disapproved of
the information contained herein.