Debt resolution services – Selagy Law http://selagylaw.com/ Sun, 15 May 2022 04:56:05 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://selagylaw.com/wp-content/uploads/2021/10/icon-1-120x120.png Debt resolution services – Selagy Law http://selagylaw.com/ 32 32 Park Hall Hotel’s £1m debt and no assets at start of liquidation https://selagylaw.com/park-hall-hotels-1m-debt-and-no-assets-at-start-of-liquidation/ Sun, 15 May 2022 04:30:00 +0000 https://selagylaw.com/park-hall-hotels-1m-debt-and-no-assets-at-start-of-liquidation/ The company behind an iconic Lancashire hotel which closed after a failed attempt to convert it into asylum accommodation is disappearing with debts of nearly £1million. Park Hall Hotel in Charnock Richard closed in February without notice to staff and visitors, as the then owners tried to strike a deal with the government over the […]]]>

The company behind an iconic Lancashire hotel which closed after a failed attempt to convert it into asylum accommodation is disappearing with debts of nearly £1million.

Park Hall Hotel in Charnock Richard closed in February without notice to staff and visitors, as the then owners tried to strike a deal with the government over the potential new use. The move left employees out of work, and nearly all planned functions and weddings were canceled without warning.

However, the plan which would have seen rural Chorley Hotel used as temporary accommodation for people awaiting asylum decisions and it has since only reopened once for a club night celebrating Wigan Pier’s anniversary. Owner Aysha King has now placed the company into liquidation in a process managed by Smith & Barnes Insolvency Practitioners; a company also known as Affordable Liquidators. An initial inventory prepared by the company reveals that the company has no assets and debts of £960,000.

READ MORE: Mom betrayed dying colleague who just wanted to leave hospital savings

This includes £228,000 owed to HMRC; £130,000 owed to Mr King on a director’s loan; and £39,000 owed to former partner Best Western. Another £29,000 is due to Chorley Borough Council.

Many local small businesses also face the prospect of running out of money for goods and services provided in the past. Standish-based site wrap company Illusions of Grandier owes £3,700; Cheadle Hulme-based Symphony Textiles has £68,000 outstanding; and a meat supplier owes £16,000. Also included are £86,000 owed to SSE Electricity and £50,000 to Santander.



Park Hall Hotel closed very suddenly in February

Documents submitted to Companies House confirm that the liquidator was officially appointed on May 4, when a resolution was passed to begin the liquidation process. Although the business was sold to Harwinder Singh for £3million during the pandemic, Ms Khan remains registered as sole director and she is listed as chairman in the liquidation resolution.

LancsLive previously reported that before its formal appointment, Smith & Barnes contacted potential creditors to warn them of the impending liquidation. In his letter he stated that the ‘tangible assets and business of the company had been sold to Mr Singh’ for £3m, with the funds being used to repay Goldcrest Finance Ltd who had provided a loan for the purchase precedent of the hotel in 2019. According to Smith & Barnes, “this will be considered by the duly appointed liquidator”.

The letter goes on to blame the pandemic for being the cause of the financial troubles that led to the company’s impending collapse. He said: “Due to the Covid-19 pandemic, the company has been unable to trade due to the restrictions put in place. Even when the company was able to trade, significant trading restrictions were still in place and the company was unable to trade at full capacity, and thus started with cash flow problems.

“The company secured a small rebound loan from the government funding program which was used to pay for the company’s expenses. This removed some short term pressure, but unfortunately it was not enough to support the cash flow and the ongoing costs of the company.”

He concluded that the company was unable to continue to pay its debts as they fell due, the offer of £3 million was made and accepted. This was used to pay off the majority of the nearly £4m debt to Goldcrest, with the shortfall written off.

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Moody’s declares Service King in limited default for non-payment of interest https://selagylaw.com/moodys-declares-service-king-in-limited-default-for-non-payment-of-interest/ Fri, 13 May 2022 11:10:15 +0000 https://selagylaw.com/moodys-declares-service-king-in-limited-default-for-non-payment-of-interest/ Moody’s Investors Services found Service King in “limited default” for its failure to make an April 1 interest payment on its unsecured notes, despite an agreement the collision repair chain reached with its lenders to temporarily defer payments. The bond rating company announced that it has added a limited default (LD) designation to the Caa3-PD […]]]>

Moody’s Investors Services found Service King in “limited default” for its failure to make an April 1 interest payment on its unsecured notes, despite an agreement the collision repair chain reached with its lenders to temporarily defer payments.

The bond rating company announced that it has added a limited default (LD) designation to the Caa3-PD probability of default rating of Midas Intermediate Holdco II, LLC (“Service King”), replacing it with Caa3 -PD/LD.

He called the company’s current capital structure “unsustainable” and predicted that Service King would restructure its short-term debt.

Neither Service King nor investment management firm Blackstone, which owns a majority stake in the company, responded to Repairer Driven News’ requests for comment by the publication deadline.

“The LD designation reflects Moody’s view that Service King’s continued failure beyond the grace period to make the interest payment that was due on April 1, 2022 on its unsecured notes is a limited default notwithstanding the Company’s forbearance agreement,” Moody’s said. in its May 6 announcement.

Service King invoked a 30-day grace period after missing the April 1 interest payment, Bloomberg reported last month, citing unnamed sources.

The corporate family’s rating remains unchanged at Caa3, reflecting the company’s “low liquidity”, and the outlook remains negative, Moody’s said.

The limited default designation will remain until Service King resolves the missed interest payment, he said.

Moody’s said Service King continues to make in-kind payments on the interest it owes on the $775 million senior term loan it took out in December 2020. Generally, in-kind payments nature are additional securities, the issuance of additional debt securities or increases in the principal of existing debt.

He noted that Service King is facing “propelled” deadlines that would begin on June 1 in the event that more than $135 million remains unpaid on its loans.

“Moody’s views Service King’s current capital structure as unsustainable given the company’s high financial leverage, low coverage and weak overall operating performance,” the company said. “Given these factors, Moody’s expects Service King to likely proceed with debt restructuring in the near term.”

Bloomberg reported last month that Service King was close to agreeing to an out-of-court resolution of its debt burden before the bonds mature in July.

Citing unnamed sources familiar with the situation, Bloomberg said the company was suffering from “rising costs and labor shortages”, like the rest of the industry. He said the plan calls on bondholders led by Clearlake Capital Group to take control and inject $100 million into the company.

Moody’s said its negative outlook highlights the risks in the event the refinancing or debt restructuring is not completed by the “convenient” June 1 deadline.

“The ratings could be upgraded once the company executes a refinancing of the October 2022 note maturity on reasonable terms,” he said. “The ratings will be lowered if the company fails to make its contractual principal payments on time, if the company files for bankruptcy, or if Moody’s lowers its recovery estimates.”

Fitch Ratings said Service King’s inability to resolve the missed interest payment represents “the first automotive default since The Hertz Corporation went bankrupt two years ago.”

Earlier this month, Service King announced that it was actively recruiting to fill hundreds of positions, including body technicians, painters, salespeople, parts managers, and more.

The company promised “market-leading salaries, competitive health benefits, 401K retirement plans, and paid time off,” along with a number of other perks.

Analysts have found that the collision repair industry’s capacity has fallen 18% from pre-pandemic levels, mainly due to labor shortages.

Service King declined requests from Repairer Driven News to discuss the challenges facing the company.

Based in Richardson, Texas, Service King operates 335 locations in 24 states and the District of Columbia.

More information

Report: Service King nears out-of-court settlement to ease debt burden

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LUMENT FINANCE TRUST, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q) https://selagylaw.com/lument-finance-trust-inc-management-report-and-analysis-of-financial-position-and-operating-results-form-10-q/ Mon, 09 May 2022 21:04:11 +0000 https://selagylaw.com/lument-finance-trust-inc-management-report-and-analysis-of-financial-position-and-operating-results-form-10-q/ In this Quarterly Report on Form 10-Q, or this "report", we refer to Lument Finance Trust as "we," "us," or "our," unless we specifically state otherwise or the context indicates otherwise. We refer to our external manager, OREC Investment Management, LLC doing business as Lument Investment Management, as our "Manager" or "Lument IM". The following […]]]>
In this Quarterly Report on Form 10-Q, or this "report", we refer to Lument
Finance Trust as "we," "us," or "our," unless we specifically state otherwise or
the context indicates otherwise. We refer to our external manager, OREC
Investment Management, LLC doing business as Lument Investment Management, as
our "Manager" or "Lument IM".

The following discussion should be read in conjunction with our condensed
consolidated financial statements and the accompanying notes to our financial
statements which are included in Item 1 of this report, as well as information
contained in our Annual Report on Form 10-K for the year ended December 31,
2021, or our 2021 10-K, filed with the Securities and Exchange Commission, or
SEC, on March 15, 2022.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements intended
to qualify for the safe harbor contained in Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act, as amended.
Forward-looking statements are subject to risks and uncertainties. These
forward-looking statements include information about possible or assumed future
results of our business, financial condition, liquidity, results of operations,
plans and objectives. In addition, our management may from time to time make
oral forward-looking statements. You can identify forward-looking statements by
use of words such as "believe," "expect," "anticipate," "estimate" "project,"
"plan," "continue," "intend," "should," "may," "will," "seek," "would," "could"
or the negative of these words and phrases or similar words and phrases, or by
discussions of strategy, plans or intentions. Statements regarding the following
subjects, among others, may be forward-looking: the return on equity; the yield
on investments; the ability to borrow to finance assets; and risks associated
with investing in real estate assets, including changes in business conditions
and the general economy. Forward-looking statements are based on our beliefs,
assumptions and expectations of our future performance, taking into account all
information currently available to us on the date of this quarterly report.
Actual results may differ from expectations, estimates and projections. Readers
are cautioned not to place undue reliance on forward-looking statements in this
quarterly report and should consider carefully the risk factors described in
Part I, Item IA "Risk Factors" in our annual report on Form 10-K for the year
ended December 31, 2021 in evaluating these forward-looking statements.
Forward-looking statements are subject to substantial risks and uncertainties,
many of which are difficult to predict and are generally beyond our control.
Additionally, many of these risks and uncertainties are currently amplified by
and will continue to be amplified by, or in the future may be amplified by, the
COVID-19 pandemic. It is not possible to predict or identify all such risks.
Additional information concerning these and other risk factors are contained in
our 2021 10-K which is available on the Securities and Exchange Commission's
website at www.sec.gov.

Overview

We are a Maryland company that focuses on investing, financing and managing a portfolio of commercial real estate (“CRE”) investments.


In January 2020, we entered into a series of transactions with subsidiaries of
ORIX Corporation USA ("ORIX USA"), a diversified financial company with the
ability to provide investment capital and asset management services to clients
in the corporate, real estate and municipal finance sectors. We entered into a
new management agreement with Lument IM, while another affiliate of ORIX USA
purchased an ownership stake of approximately 5.0% through a privately-placed
stock issuance. On February 22, 2022, the affiliate purchased an additional
13,071,895 shares of common stock from the transferable common stock rights
offering, increasing its beneficial ownership in the Company to approximately
27.4%. These transactions have enhanced the scale of LFT and are expected to
generate shareholder value through leveraging ORIX USA's expansive originations,
asset management and servicing platform.

Lument IM is a subsidiary of Lument, a nationally recognized leader in financing multifamily and senior housing. The firm relies on Lument’s extensive platform and considerable expertise when originating and underwriting investments.


We invest primarily in transitional floating rate CRE mortgage loans with an
emphasis on middle market multifamily assets. We may also invest in other
CRE-related investments including mezzanine loans, preferred equity, commercial
mortgage-backed securities, fixed rate loans, construction loans and other CRE
debt instruments. We finance our current investments in transitional multifamily
and other CRE loans primarily through match term non-recourse CRE collateralized
loan obligations ("CLO"). We may utilize warehouse repurchase agreements or
other forms of financing in the future. Our primary sources of income are net
interest from our investment portfolio and non-interest income from our mortgage
loan-related activities. Net interest income represents the interest income we
earn on investments less the expense of funding these investments.

Our investments generally have the following characteristics:


•Sponsors with experience in particular real estate sectors and geographic
markets;
•Located in U.S. markets with multiple demand drivers, such as growth in
employment and household formation;
•Fully funded principal balance greater than $5 million and generally less than
$75 million;
•Loan to Value ratio up to 85% of as-is value and up to 75% of as stabilized
value;
•Floating rate loans tied to one-month term SOFR, previously to one-month U.S.
denominated LIBOR, and/or in the future potentially any index replacement; and
•Three-year term with two one-year extension options.

We believe that our current investment strategy provides significant
opportunities to achieve attractive risk-adjusted returns for our stockholders
over time. However, to capitalize on the investment opportunities at different
points in the economic and real estate investment cycle, we may modify or expand
our investment strategy. We believe that the flexibility of our strategy, which
is supported by the significant CRE experience of Lument's investment team, and
the extensive resources of ORIX USA, will allow us to take advantage of changing
market conditions to maximize risk-adjusted returns to our stockholders.

We have elected to be taxed as a REIT and comply with the provisions of the
Internal Revenue Code with respect thereto. Accordingly, we are generally not
subject to federal income tax on our REIT taxable income that we currently
distribute to our stockholders so long as we maintain our qualification as a
REIT. Our continued qualification as a REIT depends on our ability to meet, on a
continuing basis, various complex requirements under the Internal Revenue Code
relating to, among other things, the source of our gross income, the composition
and values of our assets, our distribution levels and the concentration of
ownership of our capital stock. Even if we maintain our qualification as a REIT,
we may become subject to some federal, state and local taxes on our income
generated in our wholly owned taxable REIT subsidiary, Five Oaks Acquisition
Corp. ("FOAC").

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RECENT DEVELOPMENTS


As the COVID-19 pandemic has evolved from its emergence in early 2020, so has
its global impact. In response to COVID-19, the United States and numerous other
countries declared national emergencies, which has led to large scale
quarantines as well as restrictions to business deemed non-essential. Although
more normalized activities have resumed, we are not in a position to estimate
the ultimate impact COVID-19 and its variants will have on our business and the
economy as a whole. We cannot predict the potential impact related to both known
and unknown risks, including future quarantines, closures and other restrictions
resulting from the pandemic.

The effects of the COVID-19 pandemic did not significantly impact our operating
results for the three months ended March 31, 2022. However, the prolonged
duration and impact of the COVID-19 pandemic could materially disrupt our
business operations and negatively impact our business, financial performance
and operating results for the year ending December 31, 2022 and potentially
longer.

Summary of the first quarter of 2022


•Acquired nine loans with an initial unpaid principal balance of $119.2 million
with a weighted average interest rate of one-month U.S. LIBOR plus 3.26% and a
weighted average LIBOR floor of 0.09%.
•Acquired five loans with an initial unpaid principal balance of $65.8 million
with a weighted average interest rate of 30-day term SOFR plus 3.65% and a
weighted average SOFR floor of 0.06%.
•On February 22, 2022, the Company closed a transferable common stock rights
offering. The Company issued and sold 27,277,269 shares of common stock for
gross proceeds of approximately $83.5 million.
•On February 22, 2022, the Company, together with its Credit Parties, entered
into an amendment (the "Fourth Amendment") to the Credit and Guaranty Agreement.
This amendment amends the maximum total net leverage financial covenant.
•On March 15, 2022, the Company announced its first quarter common dividend of
$0.06 per share of common stock, in line with the previous quarter.
•On March 15, 2022, the Company announced its first quarter preferred dividend
of $0.49219 per share of Series A Preferred Stock.

Factors Affecting Our Results of Operations


Market conditions.  The results of our operations are and will continue to be
affected by a number of factors and primarily depend on, among other things, the
level of our net interest income, the market value of our assets and the supply
of, and demand for, our target assets in the marketplace. Our net interest
income, will vary primarily as a result of changes in market interest rates and
prepayment speeds, and by the ability of the borrowers underlying our commercial
mortgage loans to continue making payments in accordance with the contractual
terms of their loans, which may be impacted by unanticipated credit events
experienced by such borrowers, such as the ongoing COVID-19 pandemic. Interest
rates vary according to the type of investment, conditions in the financial
markets, competition and other factors, none of which can be predicted with any
certainty, and have most recently been impacted by the ongoing COVID-19
pandemic. Our operating results will also be affected by general U.S. real
estate fundamentals and the overall U.S. economic environment, including the
pace and degree of recovery from the ongoing COVID-19 pandemic. In particular,
our strategy is influenced by the specific characteristics of the underlying
real estate markets, including prepayment rates, credit market conditions and
interest rate levels.

 Changes in market interest rates.  Generally, our business model is such that
rising interest rates will increase our net interest income, while declining
interest rates will decrease our net interest income. As of March 31, 2022,
99.9% of our investments by total investment exposure earned a floating rate of
interest, of which 93.9% were indexed to one-month LIBOR and 6.1% were indexed
to 30-day term SOFR, and all of our collateralized loan obligations were indexed
to one-month LIBOR, and as a result we are less sensitive to variability in our
net interest income resulting from interest rate changes. Our net interest
income currently benefits from LIBOR/SOFR floors in our commercial loan
portfolio, with a weighted average LIBOR floor of 0.28% and a weighted average
SOFR floor of 0.06% as of March 31, 2022. As of March 31, 2022, 99.0% of the
loans in our commercial mortgage loan portfolio are structured with LIBOR/SOFR
floors, 13.8% of which had a floor greater than the current spot interest rate.
When interest rates are above our average interest rate floor, an increase in
interest rates will increase our interest income. Alternatively, when interest
rates are below our average interest rate floor, an increase in interest rates
will decrease our net interest income until such time as interest rates rise
above our average interest rate floor. Although our Manager is currently
originating loans with SOFR floors, there can be no assurance that we will
continue to obtain SOFR floors on future originations or LIBOR floors on future
acquisitions. Similarly, net interest income is also impacted by the spread in
our commercial mortgage loan portfolio As of March 31, 2022, the weighted
average spread of our commercial loan portfolio was 3.36%, but there is no
assurance that these spreads will be maintained as market environments
fluctuate. Current market conditions have reflected a widening trend in
commercial mortgage loan credit spreads which provide a benefit to interest
income.

In addition to the risk related to fluctuations in cash flows associated with
movements in interest rates, there is also the risk of non-performance on
floating rate assets. In the case of significant increase in interest rates, the
additional debt service payments due from our borrowers may strain the operating
cash flows of the real estate assets underlying our mortgages and/or impact
their ability to be refinanced at such higher interest rates, potentially,
contribute to non-performance or, in severe cases, default.

On November 30, 2020, the ICE Benchmark Administration ("IBA"), with the support
of the United States Federal Reserve and United Kingdom's Financial Conduct
Authority ("FCA"), announced plans to consult on ceasing publication of LIBOR on
December 31, 2021 for only the one week and two month LIBOR tenors, and on June
30, 2023 for all other LIBOR tenors. While this announcement extends the
transition period to June 2023, the United States Federal Reserve concurrently
issued a statement advising banks to stop new LIBOR issuances by the end of
2021. As of January 1, 2022, our Manager is only originating loans based on
30-day term SOFR, however, our Manager continues to have one-month LIBOR based
loans in its pipeline assets available for investment. On March 5, 2021, the FCA
confirmed that all LIBOR settings will either cease to be provided by any
administrator or no longer be representative: (a) immediately after December 31,
2021, in the case of the one week and two month U.S. dollar settings; and (b)
immediately after June 30, 2023, in the case of the remaining U.S. dollar
settings. The Alternative Reference Rate Committee ("ARRC"), a committee
convened by the Federal Reserve that includes major market participants, has
proposed an alternative rate to replace U.S. Dollar LIBOR: SOFR. On July 29,
2021 the ARRC ratified term rates for the one-, three- and six-month tenors
based on SOFR futures traded. This announcement is expected to expedite the
transition from LIBOR to SOFR. The outcome of these reforms is uncertain and any
changes in the methods by which LIBOR is determined or regulatory activity
related to LIBOR's phase-out could cause LIBOR to perform differently than in
the past.

As of March 31, 2022, 93.9% of our commercial mortgage loans by principal
balance and 100% of our collateralized loan obligations bear interest related to
one-month U.S. LIBOR. All of these arrangements provide procedures for
determining an alternative base rate in the event that LIBOR is discontinued.
Regardless, there can be no assurances as to what alternative base rates may be
and whether such base rate will be more or less favorable than LIBOR and any
other unforeseen impacts of the discontinuation of LIBOR. We are monitoring the
developments with respect to the phasing out of LIBOR and are working
                                       21

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with our lenders and borrowers to minimize the impact of any LIBOR transition on
our financial condition and results of operations, but can provide no assurances
regarding the impact of the discontinuation of LIBOR.

Credit risk.  Our commercial mortgage loans and other investments are also
subject to credit risk. The performance and value of our loans and other
investments depend upon the sponsor's ability to operate properties that serve
as our collateral so that they produce cash flows adequate to pay interest and
principal due to us. To monitor this risk, the Manager's asset management team
reviews our portfolio and maintains regular contact with borrowers, co-lenders
and local market experts to monitor the performance of the underlying
collateral, anticipate borrower, property and market issues and, to the extent
necessary or appropriate, enforce our rights as lender. The market values of
commercial mortgage assets are subject to volatility and may be adversely
affected by a number of factors, including, but not limited to, national,
regional and local economic conditions (which may be adversely affected by
industry slowdowns and other factors); local real estate conditions; changes or
continued weakness in specific industry segments; construction quality, age and
design; demographic factors; and retroactive changes to building or similar
codes. In addition, decreases in property values reduce the value of the
collateral and potential proceeds available to a borrower to repay the
underlying loans, which could also cause us to suffer losses. As of March 31,
2022, 100% of the commercial mortgage loans in our portfolio were current as to
principal and interest. Additionally, we have reviewed the loans designated as
High Risk for impairment. Impairment of these loans, which are collateral
dependent, is measured by comparing the estimated fair value of the underlying
collateral, less costs to sell, to the book value of the respective loan. As of
March 31, 2022, the Company has not recognized any impairments on its loan
portfolio. However, due to the continued widespread impact of the COVID-19
pandemic we consider there to be heightened credit risk associated with our
commercial mortgage loan portfolio. Uncertainty about the severity and duration
of the economic impact of the COVID-19 pandemic, as exacerbated by events
related to virus strains, persist and potential exists for the credit risk of
our portfolio to heighten further. We can provide no assurances that our
borrowers will remain current as to principal and interest, or that we will not
enter into forbearance agreements or loan modifications in order to protect the
value of our commercial mortgage loan assets. Should that occur, it could have a
material negative impact on our results of operations.

Liquidity and financing markets. Liquidity is a measurement of our ability to
meet potential cash requirements, including ongoing commitments to pay
dividends, fund investments and repay borrowings and other general business
needs. Our primary sources of liquidity have been proceeds of common or
preferred stock issuances, net proceeds from corporate debt obligations, net
cash provided by operating activities and other financing arrangements. We
finance our commercial mortgage loans primarily with collateralized loan
obligations, the maturities of which are matched to the maturities of the loans,
and which are not subject to margin calls or additional collateralization
requirements. However, to the extent that we seek to invest in additional
commercial mortgage loans outside of our CLO, we will in part be dependent on
our ability to issue additional collateralized loan obligations, to secure
alternative financing facilities or to raise additional common or preferred
equity.

Prepayment speeds.  Prepayment risk is the risk that principal will be repaid at
a different rate than anticipated, causing the return on certain investments to
be less than expected. As we receive prepayments of principal on our assets, any
premiums paid on such assets are amortized against interest income. In general,
an increase in prepayment rates accelerates the amortization of purchase
premiums, thereby reducing the interest income earned on the assets. Conversely,
discounts on such assets are accreted into interest income. In general, an
increase in prepayment rates accelerates the accretion of purchase discounts,
thereby increasing the interest earned on the assets. With the exception of nine
loans acquired with an initial aggregate unpaid principal balance of $117.0
million with an aggregate purchase premium of $538,146 and aggregate purchase
discount of $171,186, all of our commercial mortgage loans were acquired at par.
As of March 31, 2022, our aggregate unamortized purchase premium was $45,349 and
our aggregate unamortized purchase discount was $100,572, and accordingly we do
not believe this to be a material risk for us at present. Additionally, we are
subject to prepayment risk associated with the terms of our collateralized loan
obligations. Due to the generally short-term nature of transitional
floating-rate commercial mortgage loans, our CLOs include a reinvestment period
during which principal repayments and prepayments on our commercial mortgage
loans may be reinvested in similar assets, subject to meeting certain
eligibility criteria. The reinvestment period for LFT CRE 2021-FL1 remains in
place through December 2023. While the interest-rate spreads of our
collateralized loan obligations are fixed until they are repaid, the terms,
including spreads, of newly originated loans are subject to uncertainty based on
a variety of factors, including market and competitive conditions, which remain
uncertain and volatile in light of the COVID-19 pandemic. To the extent that
such conditions result in lower spreads on the assets in which we reinvest, we
may be subject to a reduction in interest income in the future. However, our
loan agreements provide for prepayment penalties which are intended to offset
any potential reduction in future interest income.

Changes in market value of our assets.  We account for our commercial mortgage
loans at amortized cost. As such, our earnings will generally not be directly
impacted by changes in the market values of these loans. However, if a loan is
considered to be impaired as a result of adverse credit performance, an
allowance is recorded to reduce the carrying value through a charge to the
provision for loan losses. Impairment is measured by comparing the estimated
fair value of the underlying collateral, less costs to sell, to the book value
of the respective loan. Provisions for loan losses will directly impact our
earnings. Given the widespread impact of the COVID-19 pandemic, we consider
there to be a heightened credit risk associated with our commercial mortgage
loan portfolio.

 Governmental actions. Since 2008, when both Fannie Mae and Freddie Mac were
placed under the conservatorship of the U.S. government, there have been a
number of proposals to reform the U.S. housing finance system in general, and
Fannie Mae and Freddie Mac in particular. We anticipate debate on residential
housing and mortgage reform to continue through 2022 and beyond, but a deep
divide persists between factions in Congress and as such it remains unclear what
shape any reform would take and what impact, if any, reform would have on
mortgage REITs.

Managing our business during COVID-19


As of March 13, 2020, our Manager, and its affiliates, implemented a work from
home, or WFH, policy for employees in all locations. On October 1, 2021, our
Manager began reopening offices on a limited basis with certain staff returning
to the office on a staggered partial schedule. As of April 1, 2022, all of our
offices have reopened with with continued flexible work arrangements. Our
Manager's highly experienced senior team and dedicated employees have been and
continue to be fully operational during this ongoing disruption and are
continuing to execute on all investment management, asset management, servicing,
portfolio monitoring, financial reporting and related control activities. Our
Manager's and affiliates employees are in constant communication to ensure
timely coordination and early identification of issues. We continue to engage in
ongoing active dialogue with the borrowers in our commercial mortgage loan
portfolio to understand what is taking place at the properties collateralizing
our investments.

Considering the current economic environment caused by COVID-19 we are mindful
of constraints on landlord enforcement rights and continue to monitor the impact
of fiscal stimulus on our loan portfolio. From September 4, 2020, through August
26, 2021, when the Centers for Disease Control ("CDC") Agency Order was
overturned by the U.S. Supreme Court, residential landlords and those with
similar eviction rights could not evict "covered persons" for nonpayment of rent
in any U.S. state or territory. Covered persons (a) use best efforts to obtain
government assistance; (b) make less than $99,000 or $198,000 jointly; (c) have
suffered loss of income or extraordinary medical expenses; (d) use of best
efforts to make partial payments; and (e) have no other housing options. In the
last month before the Supreme Court lifted the order, the moratorium added to
the definition of "covered persons" to include (f) the individual
                                       22

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resides in a U.S. county experiencing substantial or high rates of community
transmission levels of SARS-COV-2 as defined by CDC. As a result of the national
restriction, multifamily apartments borrowers had less ability to address
nonpayment of tenants, which in turn may have negatively impacted a property's
cash flow coverage of the debt service of their loans. Additionally, due to
COVID-19, there have been potential challenges facing third-party providers,
such as appraisers, environmental and engineering consultants we rely on to make
new investments which may make it more difficult to make these investments.
Currently, despite the Supreme Court having lifted the CSC order, individual
states and localities continue to maintain limited evictions restrictions. New
York, Washington D.C., Massachusetts, Minnesota, New Mexico, Oregon and Nevada
all have some form of limited or prohibited residential evictions while the
tenant applies for rental assistance. California has local eviction moratoriums
that may extend beyond that in different municipalities, but not statewide.

Key financial measures and indicators


As a real estate investment trust, we believe the key financial measures and
indicators for our business are earnings per share, dividends declared,
Distributable Earnings, and book value per share of common stock. For the three
months ended March 31, 2022, we recorded earnings per share of $0.05, declared a
quarterly dividend of $0.06 per share, and reported $0.05 per share of
Distributable Earnings. In addition, our book value per share of common stock
was $3.62.

As described in more detail below, distributable income is a measure that is not prepared in accordance with generally accepted accounting principles in The United States of America, or GAAP, which helps us assess our performance by excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily representative of our current loan portfolio and operations. In addition, distributable earnings is a performance measure that we take into account when declaring our dividends.

Earnings per share and dividends declared

The following table shows the calculation of basic and diluted net earnings per share and declared dividends per share:

Three months completed

                                                                       March 31, 2022           March 31, 2021
Net income(1)                                                        $     1,769,841          $     2,804,935
Weighted-average shares outstanding, basic and diluted                    36,464,952               24,943,383
Net income per share, basic and diluted                              $          0.05          $          0.11
Dividends declared per share                                         $      

$0.06 0.09

(1) Represents net income attributable to Lument Finance Trust, Inc.

distributable profit


Distributable Earnings is a non-GAAP financial measure, which we define as GAAP
net income (loss) attributable to holders of common stock, or, without
duplication, owners of our subsidiaries, computed in accordance with GAAP,
including realized losses not otherwise included in GAAP net income (loss) and
excluding (i) non-cash equity compensation, (ii) depreciation and amortization,
(iii) any unrealized gains or losses or other similar non-cash items that are
included in net income for that applicable reporting period, regardless of
whether such items are included in other comprehensive income (loss) or net
income (loss), and (iv) one-time events pursuant to changes in GAAP and certain
material non-cash income or expense items after discussions with the Company's
board of directors and approved by a majority of the Company's independent
directors.

While Distributable Earnings excludes the impact of any unrealized provisions
for credit losses, any loan losses are charged off and realized through
Distributable Earnings when deemed non-recoverable. Non-recoverability is
determined (i) upon the resolution of a loan (i.e. when the loan is repaid,
fully or partially, or in the case of foreclosures, when the underlying asset is
sold), or (ii) with respect to any amount due under any loan, when such amount
is determined to be non-collectible.

We believe that Distributable Earnings provides meaningful information to
consider in addition to our net income (loss) and cash flows from operating
activities determined in accordance with GAAP. We believe Distributable Earnings
is a useful financial metric for existing and potential future holders of our
common stock as historically, over time, Distributable Earnings has been a
strong indicator of our dividends per share. As a REIT, we generally must
distribute annually at least 90% of our taxable income, subject to certain
adjustments, and therefore we believe our dividends are one of the principal
reasons stockholders may invest in our common stock. Refer to Note 15 to our
consolidated financial statements for further discussion of our distribution
requirements as a REIT. Furthermore, Distributable Earnings help us to evaluate
our performance excluding the effects of certain transactions and GAAP
adjustments that we believe are not necessarily indicative of our current loan
portfolio and operations, and is a performance metric we consider when declaring
our dividends.

Distributable Earnings does not represent net income (loss) or cash generated
from operating activities and should not be considered as an alternative to GAAP
net income (loss), or an indication of GAAP cash flows from operations, a
measure of our liquidity, or an indication of funds available for our cash
needs. In addition, our methodology for calculating Distributable Earnings may
differ from the methodologies employed by other companies to calculate the same
or similar performance measures, and accordingly, our reported Distributable
Earnings may not be comparable to the Distributable Earnings reported by other
companies.

The following table provides a reconciliation of distributable earnings to GAAP net income:

                                       23

--------------------------------------------------------------------------------

Three months completed

                                                                      March 31, 2022           March 31, 2021
Net income attributable to common stockholders                      $     1,769,841          $     2,804,935
Unrealized (gain) loss on mortgage servicing rights                        (147,382)                  20,455

Recognized compensation expense related to restricted common shares

                                                                         4,638                    2,885
Adjustment for income taxes                                                  51,665                   14,713
Distributable Earnings                                              $     1,678,762          $     2,842,988
Weighted-average shares outstanding, basic and diluted                   36,464,952               24,943,383
Distributable Earnings per share, basic and diluted                 $       

$0.05 0.11

Book value per common share

The following table calculates our book value per common share:

                                                                    March 31, 2022           December 31, 2021
Total stockholders' equity                                         $  

248 981 343 $169,276,000
Fewer preferred shares (preferred liquidation of $25.00 per share)

                                                                (60,000,000)                (60,000,000)
Total common stockholders' equity                                     188,981,343                 109,276,000
Shares of common stock issued and outstanding at period end            52,225,152                  24,947,883
Book value per share of common stock                               $         3.62          $             4.38



As of March 31, 2022, our common stockholders' equity was $189.0 million, and
our book value per share of common stock was $3.62 on a basic and fully diluted
basis. Our equity increased by $79.7 million compared to our equity as of
December 31, 2021 primarily as a result of the closing of the transferable
common stock rights offering on February 22, 2022 generating net proceeds of
approximately $81.1 million partially offset by $1.2 million in distributions
greater than net income the quarter.

Investment portfolio

Commercial Mortgages


As of March 31, 2022, we have determined that we are the primary beneficiary of
LFT CRE 2021-FL1, Ltd. based on our obligation to absorb losses derived from
ownership of our residual interests. Accordingly, the Company consolidated the
assets, liabilities, income and expenses of the underlying issuing entities,
collateralized loan obligations.

The following table details our lending activity by outstanding principal balance:

                                         Commercial Mortgage Loans Held-for-Investment
Balance at December 31, 2021            $                               1,001,825,294
Purchases and fundings                                                    184,992,167
Proceeds from principal repayments                                       

(109,356,365)

Accretion of purchase discount                                              

100,572

Amortization of purchase premium                                              (45,349)
Balance at March 31, 2022               $                               1,077,516,319



The following table details the overall statistics of our loan portfolio in
March 31, 2022 and December 31, 2021:

                                                                                                                                              Weighted Average
                                                                                                                                                                          Remaining
                                           Unpaid Principal                                                            Floating Rate                                         Term
             Loan Type                          Balance               Carrying Value            Loan Count                Loan %                 Coupon(1)                (Years)(2)
March 31, 2022
Loans held-for-investment
Senior secured loans(3)                   $  1,077,505,797          $ 1,077,516,319                   71                      100.0  %                   3.8  %                     3.9
                                          $  1,077,505,797          $ 1,077,516,319                   71                      100.0  %                   3.8  %                     3.9







                                       24
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                                                                                                                                            Weighted Average
                                                                                                                                                                        Remaining
                                         Unpaid Principal                                                            Floating Rate                                         Term
            Loan Type                         Balance               Carrying Value            Loan Count                Loan %                 Coupon(1)                (Years)(2)
December 31, 2021
Loans held-for-investment
Senior secured loans(3)                 $  1,001,869,994          $ 1,001,825,294                   66                      100.0  %                   3.9  %                     3.7
                                        $  1,001,869,994          $ 1,001,825,294                   66                      100.0  %                   3.9  %                     3.7




(1)  Weighted average coupon assumes applicable one-month LIBOR of 0.29% and
0.10% and 30-day Term SOFR of 0.24% and 0.00% as of March 31, 2022 and
December 31, 2021, respectively, inclusive of weighted average interest rate
floors of 0.27% and 0.49%, respectively. As of March 31, 2022, 93.9% of the
investments by total investment exposure earned a floating rate indexed to
one-month USD LIBOR and 6.1% of the investments by total investment exposure
earned a floating rate indexed to 30-day Term SOFR. As of December 31, 2021,
100% of the investments by total investment exposure earned a floating rate
indexed to one-month LIBOR
(2)  Weighted average remaining term assumes all extension options are exercised
by the borrower, provided, however, that our loans may be repaid prior to such
date.
(3)  As of March 31, 2022, $998,667,789 of the outstanding senior secured loans
were held in VIEs and $78,848,530 of the outstanding senior secured loans were
held outside of VIEs. As of December 31, 2021, $974,025,294 of the outstanding
senior secured loans were held in VIEs and $27,800,000 of the outstanding senior
secured loans were held outside VIEs.

The table below presents additional information relating to the Company’s portfolio as at March 31, 2022:

                                                                      Total Loan             Current                                                                                             Max Remaining
Loan #          Form of Investment         Origination Date           Commitment(1)          Principal Amount       Location                         Property Type            Coupon             Term (Years)            LTV(2)
    1            Senior secured               December 16, 2021       $  54,455,784          $  51,375,000           Daytona, FL                      Multi-Family            1mL + 3.1                        4.8             71.7  %
    2            Senior secured               November 22, 2019       $  39,500,000          $  36,781,588           Virginia Beach, VA               Multi-Family            1mL + 3.2                        2.8             77.1  %
    3            Senior secured                   June 28, 2021       $  39,263,000          $  34,690,000           Barrington, NJ                   Multi-Family            1mL + 3.1                        4.3             78.1  %
    4            Senior secured                November 2, 2021       $  33,500,000          $  33,500,000           Warner Robbins, GA               Multi-Family            1mL + 3.0                        2.7             51.4  %
    5            Senior secured                    June 8, 2021       $  35,877,500          $  33,360,000           Chattanooga, TN                  Multi-Family            1mL + 3.7                        4.3             79.8  %
    6            Senior secured                    June 8, 2021       $  32,500,000          $  30,576,666           Miami, FL                        Multi-Family            1mL + 3.2                        4.3             74.3  %
    7            Senior secured                   June 30, 2021       $  32,250,000          $  28,650,000           Porter, TX                       Multi-Family            1mL + 3.3                        4.3             71.6  %
    8            Senior secured                    May 20, 2021       $  33,000,000          $  27,803,800           Marietta, GA                     Multi-Family            1mL + 3.1                        4.3             77.0  %
    9            Senior secured                  April 22, 2021       $  27,750,000          $  27,750,000           Los Angeles, CA                  Multi-Family            1mL + 3.3                        0.7             55.0  %
   10            Senior secured                    June 7, 2021       $  29,400,000          $  26,400,000           San Antonio, TX                  Multi-Family            1mL + 3.4                        4.3             80.0  %
   11            Senior secured                 August 26, 2021       $  27,268,000          $  24,832,000           Clarkston, GA                    Multi-Family            1mL + 3.5                        4.4             79.0  %
   12            Senior secured               November 15, 2021       $  26,003,000          $  24,330,000           El Paso, TX                      Multi-Family            1mL + 3.1                        4.8             76.0  %
   13            Senior secured                October 18, 2021       $  28,250,000          $  23,348,000           Cherry Hill, NJ                  Multi-Family            1mL + 3.0                        4.7             72.4  %
   14            Senior secured                 August 26, 2021       $  23,370,000          $  21,957,240           Union City, GA                   Multi-Family            1mL + 3.4                        4.5             70.4  %
   15            Senior secured               November 16, 2021       $  21,975,000          $  20,960,000           Dallas, TX                       Multi-Family            1mL + 3.2                        4.8             73.5  %
   16            Senior secured                 August 31, 2021       $  21,750,000          $  20,700,000           Houston, TX                      Multi-Family            1mL + 3.3                        4.5             74.2  %
   17            Senior secured                October 29, 2021       $  20,500,000          $  20,500,000           Knoxville, TN                    Multi-Family            1mL + 3.8                        4.7             70.0  %
   18            Senior secured                   June 30, 2021       $  21,968,000          $  20,188,700           Jacksonville, FL                 Multi-Family            1mL + 3.5                        4.3             77.1  %
   19            Senior secured                October 13, 2017       $  20,000,000          $  19,648,818           Seattle, WA                      Self Storage            1mL + 3.6                        2.7             46.5  %
   20            Senior secured                November 5, 2021       $  20,965,000          $  19,200,000           Orlando, FL                      Multi-Family            1mL + 3.0                        4.7             78.1  %


                                       25
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  21           Senior secured            February 11, 2022       $ 20,165,000          $ 18,599,480           Tampa, FL                     Multi-Family           1mS + 3.6                  5.0          78.0  %
  22           Senior secured            November 23, 2021       $ 19,925,000          $ 18,400,000           Orange, NJ                    Multi-Family           1mL + 3.2                  4.8          78.0  %
  23           Senior secured             October 12, 2021       $ 17,500,000          $ 17,500,000           Atlanta, GA                   Multi-Family           1mL + 3.2                  2.6          42.9  %
  24           Senior secured                 July 8, 2021       $ 17,000,000          $ 17,000,000           Knoxville, TN                 Multi-Family           1mL + 4.0                  4.4          69.7  %
  25           Senior secured            December 28, 2018       $ 24,123,000          $ 16,672,623           Austin, TX                    Retail                 1mL + 4.1                  0.8          60.5  %
  26           Senior secured           September 30, 2021       $ 17,583,000          $ 16,663,000           Hanahan, SC                   Multi-Family           1mL + 3.2                  4.6          76.4  %
  27           Senior secured             February 1, 2022       $ 16,160,000          $ 15,400,000           San Antonio, TX               Multi-Family           1mS + 3.5                  4.9          79.8  %
  28           Senior secured            February 22, 2022       $ 19,241,527          $ 15,000,000           Philadelphia, PA              Multi-Family           1mS + 3.8                  5.0          80.0  %
  29           Senior secured               April 12, 2021       $ 17,000,000          $ 15,000,000           Cedar Park, TX                Multi-Family           1mL + 3.8                  4.2          66.7  %
  30           Senior secured             December 2, 2021       $ 16,250,000          $ 14,857,637           Colorado Springs, CO          Multi-Family           1mL + 3.0                  4.8          72.5  %
  31           Senior secured             October 11, 2019       $ 17,000,000          $ 14,500,000           Pompano Beach, FL             Self Storage           1mL + 3.8                  2.6          75.0  %
  32           Senior secured             December 1, 2021       $ 16,071,800          $ 14,080,000           Horn Lake, MS                 Multi-Family           1mL + 3.3                  4.8          75.7  %
  33           Senior secured             November 3, 2021       $ 13,870,000          $ 13,720,000           Louisville, KY                Multi-Family           1mL + 3.4                  4.7          75.4  %
  34           Senior secured             October 14, 2021       $ 13,440,000          $ 13,440,000           Bridgeton, NJ                 Multi-Family           1mL + 3.3                  1.2          70.0  %
  35           Senior secured                 May 28, 2021       $ 13,675,000          $ 13,332,734           Houston, TX                   Multi-Family           1mL + 3.4                  2.3          73.8  %
  36           Senior secured                 May 12, 2021       $ 13,930,000          $ 13,026,000           Fort Worth, TX                Multi-Family           1mL + 3.4                  4.3          74.9  %
  37           Senior secured              August 16, 2021       $ 15,886,000          $ 12,750,000           Columbus, OH                  Multi-Family           1mL + 3.7                  4.5          75.0  %
  38           Senior secured               March 12, 2021       $ 13,703,000          $ 12,375,000           Mesa, AZ                      Multi-Family           1mL + 3.6                  4.1          75.0  %
  39           Senior secured              October 1, 2021       $ 13,775,000          $ 12,100,000           East Nashville, TN            Multi-Family           1mL + 3.4                  4.6          79.1  %
  40           Senior secured                July 23, 2018       $ 16,200,000          $ 11,748,199           Chicago, IL                   Office                 1mL + 3.8                  1.2          72.7  %
  41           Senior secured             October 28, 2021       $ 12,250,000          $ 11,202,535           Tampa, FL                     Multi-Family           1mL + 3.0                  4.7          75.7  %
  42           Senior secured           September 30, 2021       $ 11,300,000          $ 10,795,000           Clearfield, UT                Multi-Family           1mL + 3.2                  4.6          68.0  %
  43           Senior secured               April 23, 2021       $ 11,600,000          $ 10,497,000           Tualatin, OR                  Multi-Family           1mL + 3.2                  4.2          73.9  %
  44           Senior secured            December 29, 2021       $ 11,000,000          $ 10,239,800           Phoenix, AZ                   Multi-Family           1mL + 3.7                  4.8          75.9  %
  45           Senior secured             December 2, 2021       $  9,975,000          $  9,975,000           Tomball, TX                   Multi-Family           1mL + 3.4                  4.8          68.5  %
  46           Senior secured            November 23, 2021       $ 10,706,000          $  9,856,000           Atlanta, GA                   Multi-Family           1mL + 3.4                  4.8          79.5  %
  47           Senior secured               March 26, 2021       $  9,623,000          $  9,623,000           Alhambra, CA                  Multi-Family           1mL + 3.3                  0.6          49.0  %
  48           Senior secured             January 14, 2022       $ 10,234,000          $  9,609,250           Houston, TX                   Multi-Family           1mS + 3.6                  4.9          78.8  %
  49           Senior secured             October 21, 2021       $ 11,500,000          $  9,100,000           Madison, TN                   Multi-Family           1mL + 3.2                  4.7          68.4  %
  50           Senior secured            November 30, 2021       $ 11,276,000          $  8,400,000           Lindenwood, NJ                Multi-Family           1mL + 3.6                  4.8          76.4  %
  51           Senior secured                 May 12, 2021       $  8,950,000          $  8,220,000           Lakeland, FL                  Multi-Family           1mL + 3.4                  4.3          76.8  %
  52           Senior secured                April 7, 2021       $ 10,152,000          $  7,963,794           Phoenix, AZ                   Multi-Family           1mL + 3.6                  4.2          69.5  %
  53           Senior secured             October 29, 2021       $  9,000,000          $  7,934,000           Riverside, MO                 Multi-Family           1mL + 3.4                  4.7          76.6  %


                                       26
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  54           Senior secured               March 12, 2018       $  9,112,000          $ 7,912,000           Waco, TX                     Multi-Family           1mL + 4.8                  1.1          72.9  %
  55           Senior secured            November 16, 2021       $  7,680,000          $ 7,680,000           Cape Coral, FL               Multi-Family           1mL + 3.3                  2.8          79.2  %
  56           Senior secured             October 27, 2021       $  9,300,000          $ 7,624,400           Ambler, PA                   Multi-Family           1mL + 3.3                  4.7          79.9  %
  57           Senior secured               March 19, 2021       $  8,348,000          $ 7,513,000           Glendora, CA                 Multi-Family           1mL + 3.6                  4.1          72.2  %
  58           Senior secured           September 28, 2021       $  8,125,000          $ 7,286,000           Chicago, IL                  Multi-Family           1mL + 3.7                  4.6          75.9  %
  59           Senior secured            February 18, 2022       $  7,800,000          $ 7,200,000           Drexel Hills, PA             Multi-Family           1mS + 4.0                  5.0          78.1  %
  60           Senior secured            December 30, 2021       $  7,000,000          $ 7,000,000           New Haven, CT                Multi-Family           1mL + 3.5                  1.3          59.8  %
  61           Senior secured               March 31, 2021       $  8,432,000          $ 6,893,000           Tucson, AZ                   Multi-Family           1mL + 3.6                  4.1          72.8  %
  62           Senior secured                 July 1, 2021       $  7,285,000          $ 6,290,000           Harker Heights, TX           Multi-Family           1mL + 3.6                  4.3          72.3  %
  63           Senior secured              August 28, 2019       $  6,250,000          $ 6,054,427           Austin, TX                   Multi-Family           1mL + 3.3                  2.5          69.9  %
  64           Senior secured                 May 21, 2021       $  7,172,000          $ 5,994,000           Youngtown, AZ                Multi-Family           1mL + 3.7                  4.3          71.4  %
  65           Senior secured             October 26, 2021       $  6,807,000          $ 5,812,000           Indianapolis, IN             Multi-Family           1mL + 3.9                  4.7          77.1  %
  66           Senior secured                June 10, 2019       $  6,000,000          $ 5,295,605           San Antonio, TX              Multi-Family           1mL + 2.9                  2.3          62.9  %
  67           Senior secured               April 30, 2021       $  5,472,000          $ 5,285,500           Daytona Beach, FL            Multi-Family           1mL + 3.7                  4.2          77.4  %
  68           Senior secured                July 14, 2021       $  6,048,000          $ 5,248,000           Birmingham, AL               Multi-Family           1mL + 3.7                  4.4          71.7  %
  69           Senior secured            November 19, 2021       $  6,453,000          $ 5,040,000           Huntsville, AL               Multi-Family           1mL + 3.8                  4.8          78.8  %
  70           Senior secured            November 30, 2018       $  4,446,000          $ 4,446,000           Anderson, SC                 Multi-Family           1mL + 3.3                  0.7          53.7  %
  71           Senior secured            December 28, 2021       $ 52,800,000          $ 2,800,000           Houston, TX                  Multi-Family           1mL + 3.2                  4.8          71.2  %



(1)  See Note 11 Commitments and Contingencies to our condensed consolidated
financial statements for further discussion of unfunded commitments.
(2)  LTV as of the date the loan was originated by a Hunt/ORIX affiliate and is
calculated after giving effect to capex and earn-out reserves, if applicable.
LTV has not been updated for any subsequent draws or loan modifications and is
not reflective of any changes in value, which may have occurred subsequent to
the origination date.

Our loan portfolio is 100% performing, with no loan impairments, monetary defaults or unearned loans from March 31, 2022.


We maintain strong relationships with our borrowers and utilized those
relationships to address potential impacts of the COVID-19 pandemic on loans
secured by properties experiencing cash flow pressure. All of our loans are
current with respect to principal and interest, however, some of our borrowers
have expressed concern on delays in the implementation of business plans due to
the prolonged impact of the COVID-19 pandemic. Accordingly, we will continue to
engage in discussions with them to work towards the maximization of cash flows
and values of our commercial mortgage loan assets should these difficulties
arise.

We have not entered into any forbearance agreements or loan modifications to
date. However, due to the continued economic impact of the COVID-19 pandemic we
consider there to be heightened credit risk associated with our commercial
mortgage loan portfolio. As such, we can provide no assurances that our
borrowers will remain current as to principal and interest, or that we will not
enter into any forbearance agreements or loan modifications in order to protect
the value of our commercial mortgage loan assets.

As discussed in Note 2 to our consolidated financial statements, our Manager
performs a quarterly review of our loan portfolio, assesses the performance of
each loan, and assigns a risk rating between "1" and "5," from less risk to
greater risk. The weighted average risk rating of our total loan exposure was
2.1 and 2.3 as of March 31, 2022 and December 31, 2021, respectively. The
decrease in average risk rating is primarily the result of commercial mortgage
loans that paid off with a risk rating of "2" of $32.3 million, a risk rating of
"3" of $69.0 million and a risk rating of "4" of $8.0 million, offset by the
purchase of commercial mortgage loans with a risk rating of "2" of
$185.0 million during the three months ended March 31, 2022. Additionally, $47.9
million of loans with a risk rating of "2" transitioned to a risk rating of "3",
$96.2 million of loans with a risk rating of "3" transitioned to a risk rating
of "2" and $12.8 million of loans transitioned from a risk rating of "3" to a
risk rating of "4". The following table presents the principal balance and net
book value based on our internal risk ratings:
                                       27

--------------------------------------------------------------------------------

                                               March 31, 2022
 Risk Rating       Number of Loans      Unpaid Principal Balance       Net Carrying Value
      1                    -           $                       -      $                 -
      2                   56                         835,421,563              835,397,037
      3                   12                         212,290,430              212,325,478
      4                    3                          29,793,804               29,793,804
      5                    -                                   -                        -
                          71           $           1,077,505,797      $     1,077,516,319


Secured Loan Obligations


We may seek to enhance returns on our commercial mortgage loan investments
through securitizations, or CLOs, if available, as well as the utilization of
warehouse repurchase agreement financing. To the extent available, we intend to
securitize the senior portion of some of our loans, while retaining the
subordinate securities in our investment portfolio. The securitizations of this
senior portion will be accounted for as either a "sale" or as a "financing." If
they are accounted for as a sale, the loan will be removed from the balance
sheet and if they are accounted for as a financing the loans will be classified
as "commercial mortgage loans held-for-investment" in our consolidated balance
sheets, depending on the structure of the securitization. As of March 31, 2022,
the carrying amounts and outstanding principal balances of our collateralized
loan obligations were $827.4 million and $833.8 million, respectively. See Note
4 to our condensed consolidated financial statements included in this Quarterly
Report on Form 10-Q for additional terms and details of our CLOs.

FOAC and our residential mortgage business


In June 2013, we established FOAC as a Taxable REIT Subsidiary, or TRS, to
increase the range of our investments in mortgage-related assets. Until August
1, 2016, FOAC aggregated mortgage loans primarily for sale into securitization
transactions, with the expectation that we would purchase the subordinated
tranches issued by the related securitization trusts, and that these would
represent high quality credit investments for our portfolio. Residential
mortgage loans for which FOAC owns the MSRs continue to be directly serviced by
one or more licensed sub-servicers since FOAC does not directly service any
residential mortgage loans.
As noted earlier, we previously determined to cease the aggregation of prime
jumbo loans for the foreseeable future, and therefore no longer maintain
warehouse financing to acquire prime jumbo loans. We do not expect the previous
changes to our mortgage loan business strategy to impact the existing MSRs that
we own, or the securitizations we have sponsored to date.

Pursuant to a Master Agreement dated June 15, 2016, as amended on August 29,
2016, January 30, 2017 and June 27, 2018, among MAXEX, LLC ("MAXEX"), MAXEX
Clearing LLC, MAXEX's wholly-owned clearinghouse subsidiary and FOAC, FOAC
provided seller eligibility review services under which it reviewed, approved
and monitored sellers that sold loans via MAXEX Clearing LLC. To the extent that
a seller approved by FOAC failed to honor its obligations to repurchase a loan
based on an arbitration finding that it breached its representations and
warranties, FOAC was obligated to backstop the seller's repurchase obligation.
The term of such backstop guarantee was the earlier of the contractual maturity
of the underlying mortgage and its repayment in full. However, the incidence of
claims for breaches of representations and warranties over time is considered
unlikely to occur more than five years from the sale of a mortgage. FOAC's
obligations to provide such seller eligibility review and backstop guarantee
services terminated on November 28, 2018. Pursuant to an Assumption Agreement
dated December 31, 2018, among MAXEX Clearing LLC and FOAC, MAXEX Clearing LLC
assumed all of FOAC's obligations under its backstop guarantees and agreed to
indemnify and hold FOAC harmless against any losses, liabilities, costs,
expenses and obligations under the backstop guarantee. FOAC paid MAXEX Clearing
LLC, as the replacement backstop provider, a fee of $426,770 (the "Alternative
Backstop Fee"). MAXEX Clearing LLC represented to FOAC in the Assumption
Agreement that it (i) is rated at least "A" (or equivalent) by at least one
nationally recognized statistical rating agency or (ii) has (a) adjusted
tangible net worth of at least $20.0 million and (b) minimum available liquidity
equal to the greater of (x) $5.0 million and (y) 0.1% multiplied by the
scheduled unpaid principal balance of each outstanding loan covered by the
backstop guarantees. MAXEX's chief financial officer is required to certify
ongoing compliance by MAXEX Clearing LLC with the aforementioned criteria on a
quarterly basis and if MAXEX Clearing LLC fails to satisfy such criteria, MAXEX
Clearing LLC is required to deposit into an escrow account FOAC's benefit an
amount equal to the greater of (A) the unamortized Alternative Backstop Fee for
each outstanding loan covered by the backstop guarantee and (B) the product of
0.01% multiplied by the scheduled unpaid principal balance of each outstanding
loan covered by the backstop guarantees. See Note 10 to our condensed
consolidated financial statements included in this Quarterly Report on form 10-Q
for a further description of MAXEX.

Significant Accounting Policies and Estimates


Our consolidated financial statements are prepared in accordance with GAAP,
which requires the use of estimates and assumptions that involve the exercise of
judgment and use of assumptions as to future uncertainties. Accounting estimates
and assumptions discussed in this section are those that we consider to be the
most critical to understanding our financial statements because they involve
significant judgments and uncertainties that could affect our reported assets
and liabilities, as well as our reported revenues and expenses. All of these
estimates reflect our best judgments about current, and for some estimates,
future economic and market conditions and their effects based on information
available as of the date of the financial statements. If conditions change from
those expected, it is possible that the judgments and estimates described below
could change, which may result in a change in our interest income recognition,
allowance for loan losses, future impairment of our investments, and valuation
of our investment portfolio, among other effects. We believe that the following
accounting policies are among the most important to the portrayal of our
financial condition and results of operations and require the most difficult,
subjective or complex judgments.

Commercial mortgages held for investment


Quarterly, the Company assesses the risk factors of each loan classified as
held-for-investment and assigns a risk rating based on a variety of factors,
including, without limitation, debt-service coverage ratio ("DSCR"),
loan-to-value ratio ("LTV"), property type, geographic and local market
dynamics, physical condition, leasing and tenant profile, adherence to business
plan and exit plan, maturity default risk and project sponsorship. The Company's
loans are rated on a 5-point scale, from least risk to greatest risk,
respectively, which ratings are described as follows:
                                       28

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1.Very Low Risk: exceeds expectations and is outperforming underwriting or it is
very likely that the underlying loan can be refinanced easily in the period's
prevailing capital market conditions
2.Low Risk: meeting or exceeding underwritten expectations
3.Moderate Risk: consistent with underwritten expectations or the sponsor may be
in the early stages of executing the business plan and the loan structure
appropriately mitigates additional risks
4.High Risk: potential risk of default, a loss may occur in the event of default
5.Default Risk: imminent risk of default, a loss is likely in the event of
default

The Company evaluates each loan rated High Risk or above as to whether it is
impaired on a quarterly basis. Impairment occurs when the Company determines
that the facts and circumstances of the loan deem it probable that the Company
will not be able to collect all amounts due in accordance with the contractual
terms of the loan. If a loan is considered to be impaired, an allowance is
recorded to reduce the carrying value of the loan through a charge to the
provision for loan losses. Impairment of these loans, which are collateral
dependent, is measured by comparing the estimated fair value of the underlying
collateral, less costs to sell, to the book value of the respective loan. These
valuations require significant judgments, which include assumptions regarding
capitalization rates, leasing, creditworthiness of major tenants, occupancy
rates, availability of financing, exit plan, actions of other lenders, and other
factors deemed necessary by the Manager. Actual losses, if any, could ultimately
differ from estimated losses.

In addition, the Company evaluates the entire portfolio to determine whether the
portfolio has any impairment that requires a valuation allowance on the
remainder of the loan portfolio. As of March 31, 2022, the Company has not
recognized any impairments on its loans held-for-investment. We also assessed
the remainder of the portfolio, considering the absence of delinquencies and
current market conditions, and, have not recorded any allowance for loan losses.

Capital allocation

The following tables present our capital allocated by type of investment to
March 31, 2022 and December 31, 2021:


This information represents non-GAAP financial measures within the meaning of
Item 10(e) of Regulation S-K, as promulgated by the SEC. We believe that this
non-GAAP information enhances the ability of investors to better understand the
capital necessary to support each income-earning asset category, and thus our
ability to generate operating earnings. While we believe that the non-GAAP
information included in this report provides supplemental information to assist
investors in analyzing our portfolio, these measures are not in accordance with
GAAP, and they should not be considered a substitute for, or superior to, our
financial information calculated in accordance with GAAP.

                                                                                     March 31, 2022
                                                 Commercial Mortgage                            Unrestricted
                                                        Loans                  MSRs               Cash(1)                 Total(2)
Carrying Value                                   $  1,077,516,319          

$699,379 $45,846,521 $1,124,062,219
Secured Loan Obligations

                      (827,405,880)                 -                      -             (827,405,880)
Other(3)                                                1,997,600                  -             (4,132,529)              (2,134,929)
Restricted Cash                                         1,342,733                  -                      -                1,342,733
Capital Allocated                                $    253,450,772          $ 699,379          $  41,713,992          $   295,864,143
% Capital                                                    85.7  %             0.2  %                14.1  %                 100.0  %



                                                                              December 31, 2021
                                            Commercial Mortgage                            Unrestricted
                                                   Loans                  MSRs               Cash(1)                 Total(2)
Carrying Value                              $  1,001,825,294          $ 

551,997 $14,749,046 $1,017,126,337
Secured Loan Obligations

                 (826,782,543)                 -                      -             (826,782,543)
Other(3)                                          25,769,860                  -             (3,422,658)              22,347,202
Restricted Cash                                    3,530,006                  -                      -                3,530,006
Capital Allocated                           $    204,342,617          $ 551,997          $  11,326,388          $   216,221,002
% Capital                                               94.5  %             0.3  %                 5.2  %                 100.0  %



(1)Includes cash and cash equivalents.
(2)Includes the carrying value of our Secured Term Loan.
(3)Includes principal and interest receivable, investment related receivable,
prepaid and other assets, interest payable, dividend payable and accrued
expenses and other liabilities.

Operating results


As of March 31, 2022, we consolidated the assets and liabilities of one CRE CLO,
LFT CRE 2021-FL1, Ltd. Additionally, although the COVID-19 pandemic did not
significantly impact our operating results for the period ended March 31, 2022,
should the pandemic and resulting economic deterioration persist, we expect it
may affect our business, financial condition, results of operations and cash
flows going forward, including but not limited to, interest income, credit
losses and commercial mortgage loan reinvestment, in ways that may vary widely
depending on the duration and magnitude of the COVID-19 pandemic and ensuing
economic turmoil, as well as numerous factors, many of which are outside of our
control.

                                       29
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Further in May 2021, we issued 2,400,000 shares of 7.875% Series A Cumulative
Redeemable Preferred Stock resulting in net proceeds (after underwriting
discount and commission but before operating expenses) of $58.1 million. On
August 23, 2021, the Incremental Secured Term Loan of $7.5 million provided for
in the Third Amendment to the Credit and Guaranty Agreement was funded.
Additionally, in February 2022, we issued 27,277,269 shares of common stock
resulting in net proceeds of $81.1 million. We believe that Lument IM and its
affiliates continue to identify attractive CRE lending opportunities which we
expect will allow us to deploy our capital base into assets that are consistent
with our investment strategy. The deployment of these proceeds into our target
assets may take time and as such, may result in a temporary decline in net
interest income. Additionally, as a result of the Series A Preferred Stock and
common stock issuances, Stockholders Equity as calculated per our management
agreement will increase, resulting in increased management fees, changes to the
core earnings hurdle over which incentive fees are due and payable to our
Manager and increase to the reimbursable expense cap.

The table below presents our income statement information for the three months ended March 31, 2022 and March 31, 2021respectively:

                                                                             Three Months            Three Months
                                                                            Ended March 31,        Ended March 31,
                                                                                 2022                    2021
                                                                              (unaudited)            (unaudited)
Revenues:
Interest income:
Commercial mortgage loans held-for-investment                              $   10,009,064          $   7,470,117
Cash and cash equivalents                                                           4,855                  4,300
Interest expense:
Collateralized loan obligations                                                (4,004,238)            (2,185,242)
Secured Term Loan                                                                (922,643)              (771,865)
Net interest income                                                             5,087,038              4,517,310
Other income (loss):
Unrealized gain (loss) on mortgage servicing rights                               147,382                (20,455)
Servicing income, net                                                              67,181                124,156
Total other income (loss)                                                         214,563                103,701
Expenses:
Management and incentive fees                                                     924,617                720,999
General and administrative expenses                                               852,732                680,314
Operating expenses reimbursable to Manager                                        390,710                312,454
Other operating expenses                                                           76,190                 34,753
Compensation expense                                                               50,888                 49,135
Total expenses                                                                  2,295,137              1,797,655
Net income before provision for income taxes                                    3,006,464              2,823,356
Benefit from (provision for) income taxes                                         (51,665)               (14,713)
Net income                                                                      2,954,799              2,808,643
Dividends accrued to preferred stockholders                                    (1,184,958)                (3,708)
Net income attributable to common stockholders                             $    1,769,841          $   2,804,935
Earnings per share:
Net income attributable to common stockholders (basic and diluted)         $    1,769,841          $   2,804,935
Weighted average number of shares of common stock outstanding                  36,464,952             24,943,383
Basic and diluted income per share                                         $         0.05          $        0.11
Dividends declared per share of common stock                               $         0.06          $        0.09





Net Income Summary

For the three months ended March 31, 2022, our net income attributable to common
stockholders was $1,769,841, or $0.05 basic and diluted net income per average
share, compared with net income of $2,804,935, or $0.11 basic and diluted net
income per average share, for the three months ended March 31, 2021.  The
principal drivers of this net income decline were an increase in total expenses
from $1,797,655 for the three months ended March 31, 2021 to $2,295,137 for the
three months ended March 31, 2022 and an increase in accrued preferred dividends
of $3,708 for the three months ended March 31, 2021 to $1,184,958 for the three
months ended March 31, 2022, which more than offset an increase in net interest
income from $4,517,310 for the three months ended March 31, 2021 to $5,087,038
for the three months ended March 31, 2022 and an increase in total other income
from $103,701 for the three months ended March 31, 2021 to $214,563 for the
three months ended March 31, 2022.

Net interest income

                                       30

--------------------------------------------------------------------------------


For the three months ended March 31, 2022 and the three months ended March 31,
2021, our net interest income was $5,087,038 and $4,517,310, respectively. The
increase was primarily due to (i) a $469.8 million increase in weighted-average
principal of our loan portfolio; (ii) a 4bps increase in weighted-average
floating rate of our loan portfolio and (iii) a 3bps decrease in weighted
average spread for our CLO liabilities. This was offset by (i) a $388.1 million
increase in weighted-average principal balance of our CLO liabilities; (ii) a
decrease in exit/extension fees of $233 thousand for our loan portfolio; (iii) a
decrease of 124bps in weighted-average LIBOR/SOFR floors on our loan portfolio
for the three months ended March 31, 2021 compared to the corresponding period
in 2020; (iv) a 14bps decrease in weighted-average spread on the loan portfolio
for the three months ended March 31, 2022 compared to the corresponding period
in 2020, (v) a 6bps increase in weighted-average LIBOR for our CLO liabilities
and (vi) an increase of $205 thousand in amortized debt issuance costs.

Other income (losses)


For the three months ended March 31, 2022, our other income was $214,563. This
gain was driven by net servicing income of 67,181 and net unrealized gains on
mortgage servicing rights of $147,382 as a result of increased interest rates in
the period.

For the three months ended March 31, 2021, our other income was $103,701. This
gain was driven by net servicing income of $124,156, which more than offset the
impact of net unrealized losses on mortgage servicing rights of $20,455..

The period-over-period increase in other income is primarily due to the change in unrealized gain on mortgage servicing fees due to higher interest rates in the period which reduced the CPR of the management portfolio.

Expenses


For the three months ended March 31, 2022, we incurred management and incentive
fees of $924,617 representing amounts payable to our Manager under our
management agreement. We also incurred operating expenses of $1,370,520, of
which $390,710 was payable to our Manager and $979,810 was payable directly by
us.

For the three months ended March 31, 2021we incurred management fees of
$720,999 representing amounts payable to our manager under our management agreement. We also incurred operating expenses of $1,076,656 whose $312,454
was payable to our manager and $764,202 was payable directly by us.

The period-over-period increase in operating expenses primarily reflects an increase in management, accounting, administrative, audit and professional fees and expense reimbursement.


Impairment

We review each loan classified as held-for-investment for impairment on a
quarterly basis. For the three months ended March 31, 2022 and the three months
ended March 31, 2021, the Company has not recognized any impairments on its
loans held-for-investment and therefore has not recorded any allowance for loan
losses.

Income tax expense (benefit)


For the three months ended March 31, 2022, the Company recognized a provision
for income taxes of $51,665 and for the three months ended March 31, 2021, the
Company recognized a provision for income taxes in the amount of $14,713. The
period-over-period increase in tax expense primarily reflects the change in
gross deferred revenue at FOAC due to the change in unrealized gain on mortgage
servicing rights.

Cash and capital resources


Liquidity is a measurement of our ability to meet potential cash requirements,
including ongoing commitments to pay dividends, fund investments, comply with
margin requirements, if any, and repay borrowings and other general business
needs. Our primary sources of liquidity have been met with net proceeds of
common or preferred stock issuance, net proceeds from debt offerings and net
cash provided by operating activities. We have added to our liquidity position
in February 2022, by completing a transferable common stock rights offering
issuing and selling 27,277,269 shares of common stock for net proceeds of
approximately $81.1 million and in May 2021 by issuing 2,400,000 shares of
7.875% Series A Cumulative Redeemable Preferred Stock resulting in net proceeds
(after underwriting discount and commission but before operating expense) of
$58.1 million. We finance our commercial mortgage loans primarily with match
term collateralized loan obligations, which are not subject to margin calls or
additional collateralization requirements. On June 14, 2021, we closed LFT CRE
2021-FL1 issuing eight tranches of CLO notes totaling $903.8 million. Of the
total CLO notes issued $833.8 million were investment grade notes issued to
third-party investors and $70 million were below investment-grade notes retained
by us. On August 23, 2021 we drew an additional $7.5 million of our Secured Term
Loan pursuant to the Third Amendment. As of March 31, 2022, our balance sheet
included $47.8 million of a secured term loan and $833.8 million in
collateralized loan financing, gross of discounts and debt issuance costs. Our
secured term loan matures in January 2026 and our collateralized loan financing
is term-matched and matures in 2039 or later. However, to the extent that we
seek to invest in additional commercial mortgage loans, we will in part be
dependent on our ability to issue additional collateralized loan obligations to
secure alternative financing facilities or to raise additional common or
preferred equity.

If we were required to liquidate all or a portion of our portfolio quickly, we
may realize significantly less than the value at which we previously recorded
our assets, particularly in a financial market that has been significantly
disrupted and less liquid as a result of the ongoing COVID-19 pandemic. Assets
that are illiquid are more difficult to finance, and to the extent that we use
leverage to finance assets that become illiquid, we may lose that leverage or
have it reduced if such leverage is, at least in part, dependent on the market
value of our assets. Assets tend to become less liquid during times of financial
stress, which is often the time that liquidity is most needed. As a result, our
ability to sell assets or vary our portfolio in response to changes in economic
and other conditions may be limited by liquidity constraints, which could
adversely affect our results of operations and financial condition. We seek to
limit our exposure to illiquidity risk to the extent possible, by ensuring that
the collateralized loan obligations that we use to finance our commercial
mortgage loans are not subject to margin calls or other limitations that are
dependent on the market value of the related loan collateral.

                                       31

————————————————– ——————————



We intend to continue to maintain a level of liquidity in relation to our assets
that enables us to meet reasonably anticipated investment requirements and
unforeseen business needs but that also allows us to be substantially invested
in our target assets. We may misjudge the appropriate amount of our liquidity by
maintaining excessive liquidity, which would lower our investment returns, or by
maintaining insufficient liquidity, which would force us to liquidate assets
into unfavorable market conditions and harm our operating results. As of
March 31, 2022, we had unrestricted cash and cash equivalents of $45.8 million,
compared to $14.7 million as of December 31, 2021.

As of March 31, 2022, we had $47.8 million in outstanding principal under our
Senior Secured Term Loan, with a borrowing rate of 7.25%. As of March 31, 2022,
the ratio of our recourse debt to equity was 0.2:1.

As of March 31, 2022, we consolidated the assets and liabilities of LFT CRE
2021-FL1, Ltd. The assets of the trust are restricted and can only be used to
fulfill their respective obligations, and accordingly the obligations of the
trust, which we classify as collateralized loan obligations, do not have any
recourse to us as the consolidator of the trust. As of March 31, 2022, the
carrying value of these non-recourse liabilities aggregated to $827.4 million.
As of March 31, 2022, our total debt to equity ratio was 3.5:1 on a GAAP basis.

© Edgar Online, source Previews

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Life or Debt in Ukraine by Anna Gelpern, et al https://selagylaw.com/life-or-debt-in-ukraine-by-anna-gelpern-et-al/ Fri, 29 Apr 2022 08:10:00 +0000 https://selagylaw.com/life-or-debt-in-ukraine-by-anna-gelpern-et-al/ Given Ukraine’s current debt burden and foreseeable financing needs, its official creditors should take the initiative to defer repayments and lay the groundwork for a debt restructuring agreement. Staying in the good books of the financial markets is the last thing the Ukrainian government should have to think about right now. BERKELEY/WASHINGTON, DC – Public […]]]>

Given Ukraine’s current debt burden and foreseeable financing needs, its official creditors should take the initiative to defer repayments and lay the groundwork for a debt restructuring agreement. Staying in the good books of the financial markets is the last thing the Ukrainian government should have to think about right now.

BERKELEY/WASHINGTON, DC Public debt is rarely a matter of national survival, but it has become one for war-ravaged Ukraine. Two months into the heroic defense of the country against the Russian invasion, it is becoming increasingly clear that the war could continue for many months, if not years. Victory depends not only on Ukraine’s brave and highly motivated armed forces and citizens, but also on the country’s ability to muster the financial resources it needs to sustain an intense war effort indefinitely.

Even with arms donations and other aid from the West, the Ukrainian government needs huge sums of money to buy more weapons and equipment, recruit soldiers and auxiliary personnel and support the population. civil. Russia has destroyed much of Ukraine’s production capacity and infrastructure, leaving it with limited ability to generate revenue from royalties or taxes. Moreover, the Russian blockade of Ukrainian Black Sea ports is hampering exports and further amplifying the challenges facing the Ukrainian authorities.

Under these conditions, Ukrainian policy makers must establish clear priorities for the use of precious income and foreign exchange reserves. While the government can and should cut non-essential imports and postpone development projects, as it is doing, such measures will not free up enough resources to support a protracted all-out war effort. So, Ukraine’s remaining financing options are to borrow or print money.

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future group: Future Enterprises lenders to go to bankruptcy court for dues collection https://selagylaw.com/future-group-future-enterprises-lenders-to-go-to-bankruptcy-court-for-dues-collection/ Mon, 25 Apr 2022 15:33:00 +0000 https://selagylaw.com/future-group-future-enterprises-lenders-to-go-to-bankruptcy-court-for-dues-collection/ The lenders will soon begin insolvency proceedings against Future Enterprises, the hub company of Future Group, which manufactures, designs, buys and distributes fashion apparel for the group’s companies, two people with knowledge of the development said. The collapse of the Rs 24,712 crore deal with Reliance Industries and defaults on a series of payments to […]]]>
The lenders will soon begin insolvency proceedings against Future Enterprises, the hub company of Future Group, which manufactures, designs, buys and distributes fashion apparel for the group’s companies, two people with knowledge of the development said.

The collapse of the Rs 24,712 crore deal with Reliance Industries and defaults on a series of payments to lenders in the last week of March under the terms of the One-Time Restructuring (OTR) prompted the lenders to pursue insolvency proceedings, the people said.

The company has an outstanding debt of Rs 6,880 crore as of January 31, 2022. The Central Bank of India, the lead bank, will solicit technical and financial bids from resolution professionals for FEL next week.

FEL did not immediately respond to ET’s request for comment.

According to information from the exchange, FEL defaulted on payments of Rs 2,911.5 crore to lenders between March 23 and March 31.

ET reported today (April 25) that lenders will prefer a holistic approach since their businesses are interdependent. The outstanding loans of the 20 group companies involved in the Reliance deal (which was canceled last week) stood at Rs 28,921 crore as of January 31.

Bank of India has already filed for insolvency proceedings against Future Retail Ltd (FRL) in the National Company Law Court, Mumbai after it defaulted on OTR payment of Rs 3495 crore in the last week of January.

“Lenders will file for group insolvency after referring individual (defaulting) businesses to insolvency,” one lender said. “It reduces administrative work and attracts buyers,” he added.

NCLT approved group insolvency for Videocon Industries and sister companies Srei.

The lenders have selected Vijaykumar Iyer, backed by Deloitte India, as interim resolution professional for FRL.

Although NCLT must admit a business within 14 days of being referred under the Insolvency and Bankruptcy Code (IBC), the process generally takes at least three months.

Reliance and Future has officially canceled the Rs 24,713 crore deal announced in August 2020 after 69% of secured lenders voted against the plan while 86% of shareholders and 78% of unsecured creditors favored the scheme.

Secured lenders voted against the sale of assets to Reliance because they received no guarantee from Future Group that the buyer would support the proposed distribution plan. Future had offered to transfer around 45% of the proceeds – amounting to Rs 12,612 crore – to Reliance as it repays the remaining loans over seven years.

However, the recovery under the bankruptcy path could be even lower at less than 10% because the value of the assets is much lower than the debt of the future.

The turning point in the deal was the takeover of the 946 Future store lease by Reliance Industries in late February, the lender said above. Reliance claimed to have terminated the rental agreement after Future failed to pay the rents. A large network of stores across India was the main attraction for Amazon and Reliance to acquire Future.

A 20-month legal battle between Future Group and Amazon has delayed the sale of the assets of the Reliance Group companies. Amazon had challenged the asset sale, alleging that its agreement with Future Coupon in 2019 prohibited the sale of assets to Reliance entities.

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City bond ratings improve, saving taxpayers’ money https://selagylaw.com/city-bond-ratings-improve-saving-taxpayers-money/ Sat, 23 Apr 2022 18:10:45 +0000 https://selagylaw.com/city-bond-ratings-improve-saving-taxpayers-money/ Moody’s Investors Service has raised the City of Rio Rancho’s GOULT (General Obligation of Unlimited Tax Liability) rating from Aa2 to Aa3, translating into savings for taxpayers. Strong financial performance and improved financial policies earned the upgraded rating, according to a city press release. “Bond or credit ratings are a way to gauge an organization’s […]]]>

Moody’s Investors Service has raised the City of Rio Rancho’s GOULT (General Obligation of Unlimited Tax Liability) rating from Aa2 to Aa3, translating into savings for taxpayers.

Strong financial performance and improved financial policies earned the upgraded rating, according to a city press release.

“Bond or credit ratings are a way to gauge an organization’s financial well-being, and ratings can affect how the city borrows money,” the statement said. “Additionally, investors use bond ratings as a risk assessment tool to invest in and buy city bonds.”

This rating indicates that the city is a highly desirable and more financially sound investment for investors. The city can then get better terms for the bonds, saving money and having more funds available for services.

“During the pandemic, under the direction of city staff, I sponsored a resolution to increase our reserve levels to 25% and also advocated for voters to have the option of creating a permanent fund, which attracted strong community support,” the mayor said. Gregg Hull in the release. “Thanks to these fiscally responsible policies, we will now be able to invest more of our tax dollars in municipal services instead of paying banks interest on our debt.”

The reason noted for Moody’s upgraded rating stems from city policy increasing cash reserves from 15% to 25% during the pandemic due to the uncertain economic outlook, according to the city. Additionally, Moody’s noted that the city’s creation of a permanent fund, which was approved by voters in March, was another reason.

Other factors that led to the upgrade include Rio Rancho’s large, growing economy, which will benefit from Intel Corp’s major expansion, according to Moody’s. and a manageable debt burden supported by rapid principal amortization. Moody’s noted that pension liabilities are high, but should benefit from recent legislative reform by the Public Employees Retirement Association.

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Council Discusses Budget – Farmville https://selagylaw.com/council-discusses-budget-farmville/ Thu, 21 Apr 2022 23:02:39 +0000 https://selagylaw.com/council-discusses-budget-farmville/ Buckingham’s Supervisory Board met for its monthly meeting on Monday April 18 to discuss the budget. A public hearing was held for Buckingham County’s operating budget for the 2022-23 fiscal year. Karl Carter, County Administrator, made a presentation before the hearing to cover the main points of the budget. The budget is balanced, with no […]]]>

Buckingham’s Supervisory Board met for its monthly meeting on Monday April 18 to discuss the budget.

A public hearing was held for Buckingham County’s operating budget for the 2022-23 fiscal year.

Karl Carter, County Administrator, made a presentation before the hearing to cover the main points of the budget. The budget is balanced, with no tax increases, and is not dependent on receiving additional federal, state, or local revenue, such as COVID-19 funds.

The total budget is $67,394,892. It includes a 5% raise for all employees and the school is offering a similar pay increase for contract employees. The departmental health insurance rate will increase by 5.6% and the retirement rate will increase by 1.78%. The budget also includes funds for a full-time position to serve as the Registrar.

Expenditures for this budget include $34,090,641 for School Budget, $10,446,314 for Government Expenditures, $4,192,415 for Total Commitments, $3,976,179 for VPA and Service Act for Children (CSA) and $3,661,312 for debt service.

Taxpayers will only be responsible for $31,448,765 which will go to the local budget. The remaining $35,946,127 will come from state, federal, grants and other funding sources. Contributing to this fact is that the costs of emergency services, water and sewer are fully covered by other funds.

The fund balance policy requires that 10% be allocated to an unrestricted fund balance. Using all the budget except the reserves would leave $11,192,415 or 36% and also spending the reserves would leave $7 million or 22%.

Since the state has not yet finalized its budget, some numbers may change when these funds are decided.

“The biggest change in state revenue will be in our school system,” Carter said. “On the local government side, we used last year’s state numbers for most of this budget. This is prudent because we know that the Compensation Board should increase its funding at a minimum to cover the 5% wage increases.

The Compensation Board is a state commission that helps cover budgetary costs when providing services to citizens of Virginia.

Once the state passes its budget and the county can see what funds are coming in, if the amount exceeds $673,949, a public hearing will be held as it exceeds 1% of total current budget spending.

No one registered to speak at the public hearing. The Board of Directors will vote on the budget at the April 25 meeting.

Other business:

• The Supervisory Board presented a resolution in Memoriam for Pat Bowe to his family. Bowe served as the long-term chairman of the Buckingham County Planning Commission and Planning Commissioner from 2009 until his death in February 2022. He was introduced to his wife Virginia Bowe.

• Emmett Lifsey, Principal Architect, Architectural Partners made a presentation to discuss the courthouse project. Parts of the courthouse have excess moisture and areas of deterioration. All of these elements will be considered as part of the project to repair and renovate the old part of the courthouse.

• Kristen Choate, Director of Quality Control at Robinson, Farmer Cox Associates, presented a summary of the audit. Everything was said correctly and the county is in good shape.

• Nicci Edmondston, Zoning Administrator/Planner presented Case 22-SUP300 for Aaron Beiler’s application for a special use permit for a sawmill on approximately 121.63 acres, located at 257 Sprouse’s Lane, Dillwyn. A public hearing will take place at the May 9 meeting on this subject.

• Ryanne Holland, EMS Coordinator, provided an update on the emergency operations plan. The plan with modifications has been submitted for approval. It is more up-to-date and user-friendly when the plan needs to be used.

• Cody Davis, Director/Chief of EMS, requested to use training reserve funds for $3,800 for a fire and rescue training course.

• Council approved the use of the community center for a job fair and waived rental fees for social services as requested by Stephanie Coleman. The board also discussed options for organizations struggling to afford rental fees, including school-age groups that meet in schools.

• Supervisor and Vice President Joe Chambers moved to recognize the Buckingham County High School girls’ basketball team for district champions.

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NEXTPOINT FINANCIAL INC. PROVIDES A BI-WEEKLY UPDATE ON THE MANAGEMENT STOP OPERATIONS ORDER https://selagylaw.com/nextpoint-financial-inc-provides-a-bi-weekly-update-on-the-management-stop-operations-order/ Thu, 14 Apr 2022 20:00:00 +0000 https://selagylaw.com/nextpoint-financial-inc-provides-a-bi-weekly-update-on-the-management-stop-operations-order/ HURST, TX, April 14, 2022 /CNW/ – NextPoint Financial Inc. (TSX: NPF.U) (TSX: NPF.WT.U) (“Next point”) today announced an update on the status of the management cease trade order granted by the Ontario Securities Commission (the “CSO”), as the main regulator of NextPoint, the April 1, 2022 (the “MCTO”) under National Policy 12-203 – Management […]]]>

HURST, TX, April 14, 2022 /CNW/ – NextPoint Financial Inc. (TSX: NPF.U) (TSX: NPF.WT.U) (“Next point”) today announced an update on the status of the management cease trade order granted by the Ontario Securities Commission (the “CSO”), as the main regulator of NextPoint, the April 1, 2022 (the “MCTO”) under National Policy 12-203 – Management cease trade orders (“NP 12-203”). As announced on March 17, 2022 (the “Default Announcement”), NextPoint has applied to the OSC for OCTM in connection with the filing of its audited financial statements for the year ended December 31, 2021the related MD&A and CEO and CFO certificates and its annual information form for the year ended December 31, 2021 (these Deposits, collectively, the “Required documents”) after the deadline for filing the March 31, 2022. The management cease trade order prevents the officers named in the order from trading in NextPoint securities, but does not affect the ability of other shareholders, including the public, to trading in NextPoint securities.

NextPoint continues to work to complete the integration of the annual results of its recently acquired subsidiary, Community Tax LLC, into NextPoint’s financial statements in accordance with IFRS required to complete the required documents and currently expects to be able to file the required documents. . within 30 days of the original filing deadline.

NextPoint confirms that except as set forth herein since the date of the Notice of Default: (i) there have been no material changes to the information set forth in the Notice of Default which does not was not generally disclosed; (ii) there has been no failure by NextPoint to perform its stated intentions with respect to satisfying the provisions of the Alternative Disclosure Guidelines set forth in NP 12-203; (iii) there has been no other defect specified by NextPoint under NP 12-203; and (iv) there is no other material information concerning NextPoint’s business that has not been generally disclosed.

NextPoint confirms that it will continue to satisfy the provisions of the Alternative Disclosure Guidelines under NP 12-203 by issuing default status reports every two weeks in the form of press releases so long as it delays compliance with the above filing requirements.

About NextPoint Financial Inc.

NextPoint is an all-inclusive marketplace for financial services that empowers hard-working, underserved consumers and small businesses. NextPoint was formed by the July 2021 combination of Liberty Tax, a leading provider of tax preparation services, with LoanMe, an online lender and loan distributor, followed by the December 2021 acquisition of Community Tax, an effective advocate for resolving tax debt on behalf of clients.

SOURCE NextPoint Financial Inc.

For further information: Mike Piper, [email protected]757-493-8855

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TaxRise CEO: Tax resolution requests rise amid IRS upheaval https://selagylaw.com/taxrise-ceo-tax-resolution-requests-rise-amid-irs-upheaval/ Tue, 12 Apr 2022 17:58:00 +0000 https://selagylaw.com/taxrise-ceo-tax-resolution-requests-rise-amid-irs-upheaval/ 2022 got off to a rocky start when the Internal Revenue Service urged taxpayers to take extra care when filing their returns, adding that reporting accuracy is more important than ever. Earlier in the year, the IRS predicted that more than 160 million individual tax returns would be filed for the 2021 tax year, with […]]]>

2022 got off to a rocky start when the Internal Revenue Service urged taxpayers to take extra care when filing their returns, adding that reporting accuracy is more important than ever.

Earlier in the year, the IRS predicted that more than 160 million individual tax returns would be filed for the 2021 tax year, with the majority expected to be filed by the April 18 deadline. This urgency has arisen due to recent critical tax law changes that occurred in 2021, as well as financial challenges related to the COVID-19 pandemic.

IRS Commissioner Chuck Rettig said in the press release that IRS employees are “working hard to achieve a successful 2022 tax season” and are “facing tremendous challenges related to the pandemic. “.

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Essam Abdullah, CEO of Taxrise Inc., a Southern California-based tax resolution firm, said with the stress of tax rule changes, the higher risk of audits has prompted more Americans to seek help. professional.

“We have seen substantial growth in our business over the past few years, and the need for our services is starting to match that growth,” Abdullah said. “2021 has come with a lot of uncertainty for the average person, and with tax law changes and the pandemic being contemplated, I can see why more people are seeking professional help.”

According to TaxRise, the United States is approaching more than $280 billion in uncollected taxes.

As a result, the Internal Revenue Service (IRS) has had to increase its efforts to collect unpaid tax arrears from individuals and businesses that still have balances owing.

IRS Commissioner Rettig also said Americans can take important steps to avoid potential processing delays and get their tax refunds as soon as possible. He adds that avoiding paper tax returns and opting for electronic returns could help speed up the filing process.

National Taxpayers’ Advocate Erin M. Collins released her 2021 annual report to Congress, saying 2021 was “the toughest year taxpayers and tax practitioners have ever seen.”

According to the report, tens of millions of U.S. taxpayers experienced delays in processing their returns, and approximately 77% of individual taxpayers receiving refunds experienced processing delays that directly translated into delayed refunds.

“There is no way to water down the year 2021 in tax administration,” Collins wrote in the report. “The year 2021 has not been short of taxpayer issues.”

Now, in the middle of the 2022 tax season, the IRS has made it clear that this year will likely see many of the same issues.

That’s why TaxRise offers a host of services, including help with undeclared taxes, tax consultations, tax resolution, and tax arrears. According to testimony on TaxRise, a man named “Charles N.” went to a local CPA to file his annual taxes, only to be targeted for an IRS audit. Apparently, her CPA misfiled several items on her tax return, resulting in a large tax bill of $206,000.

With help from the experts at Taxrise, this bill was settled for a fraction of the cost, dropping from $206,000 to just $650.

“I feel incredibly blessed and humbled to have had this second chance,” Charles said in his testimony. “I’m grateful to be back in a position where I don’t fear bankruptcy or debt collectors and can instead focus on my job and my family.”

Abdullah said he and his team have prepared for this tax season and are determined to ensure their clients don’t face the same hardships many faced in 2021.

“We want to help ease the burden on taxpayers this year and help remove some of that uncertainty,” Abdullah said. “That’s ultimately what we aim to do.”

Updated

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What it was was pickleball https://selagylaw.com/what-it-was-was-pickleball/ Sun, 10 Apr 2022 14:42:00 +0000 https://selagylaw.com/what-it-was-was-pickleball/ People gathered on a court in Mount Airy’s Riverside Park appeared to be preparing to play tennis while enjoying a hot April day. They certainly looked the part, wearing shorts, t-shirts and sneakers with visors to shield their eyes from the midday sun as they tried to hit a familiar-looking yellow ball. Wait! They weren’t […]]]>

People gathered on a court in Mount Airy’s Riverside Park appeared to be preparing to play tennis while enjoying a hot April day.

They certainly looked the part, wearing shorts, t-shirts and sneakers with visors to shield their eyes from the midday sun as they tried to hit a familiar-looking yellow ball.

Wait! They weren’t tennis rackets out of their carrying cases at all, but something that looked more like oversized ping pong mallets.

And while the activity was similar to tennis – including volleying the ball back and forth over a net – it was not the game they were playing on the court.

What it was was pickleball.

Yes, pickleball, which made a casual observer even more confused because there was certainly no dill, sour or candy and no bread and butter pickles anywhere on the premises – not even a pickle.

Similar to Andy Griffith’s observations in his monologue, “What It Was, Was Football,” about a naive man who accidentally stumbles upon a gridiron where a match is taking place, the curious viewer at Riverside Park witnessed a growing phenomenon .

It’s all part of what Mount Airy parks and recreation manager Peter Raymer described as an “explosion of pickleball” locally during a recent presentation to city council, which he says is the sport at the fastest growing in America.

Pickleball combines elements of badminton, ping pong and tennis, depending on the presentation, in which two or four players use the solid paddles to hit a “pickleball” – much like a wiffle ball – onto the net.

A distinct difference between tennis and pickleball involves a bounded area existing in front of the net on both sides where players are not allowed to be during a match – so there is no load on the net to slam the ball into. middle of an opponent, as happens with tennis.

This non-stolen area is commonly referred to as the “kitchen”, but again, an area that unfortunately doesn’t contain pickles, not even the sliced ​​type for a burger.

Research revealed that the sport’s name, by the way, came from one of the men who created the game on the West Coast in 1965, whose family dog ​​was named Pickles.

Luckily at Riverside Park that day, the absence of tasty pickles also came with the absence of dogs present to trip players.

Major expansion

The city’s director of parks and recreation said pickleball has been embraced by the older population because it’s a low-impact activity and likely because of a compressed court that involves less movement than tennis or badminton.

According to Raymer, the big “dill” of pickleball (his words) is that it’s a simple game that’s easy to learn and promotes fun and social interaction while being a great form of exercise.

“And it’s an inexpensive sport that people can play,” Mayor Ron Niland said, not requiring expensive equipment.

Not only is pickleball enjoyed locally at Riverside Park, but three indoor courts with portable nets have been installed in the Reeves Community Center gymnasium to accommodate a growing legion of enthusiasts.

To better meet demand in the face of limited playing areas, the Mount Airy Board of Commissioners voted in March to initiate a pickleball expansion project at an estimated cost of $200,750.

This was done at the request of Commissioner Jon Cawley, an avid pickleball player, as are other city officials.

“It’s just something that has to happen,” Cawley said as he introduced a motion to approve the project. “I think it’s really important.”

The Director of Parks and Recreation called the development “huge for our community.”

Expansion plans include converting a basketball court adjacent to the existing pickleball space at Riverside Park into three additional courts for the new sport. The three already there were provided four years ago through a Disney Play Spaces grant at Mount Airy and are positioned near the basketball court in an area between a playground and a skate park.

Hoops fans need not worry about the transition, as a new basketball court/multipurpose court will be built in a field between a park picnic shelter and a convenience store at the corner of Riverside Drive and East Pine Street.

Planned expenditures include resurfacing, fencing and equipment such as nets and goals for the new basketball area.

Money from the city’s $3.2 million share of American Rescue Plan Act (ARPA) federal funding to help communities recover from COVID has been earmarked for the expansion.

However, Deputy City Manager Darren Lewis, a former director of recreation, hopes leftover funds from a state grant awarded as part of an upcoming nearby greenway extension can be used for the project. of pickleball.

Young people involved

While older people are said to be the biggest age group fascinated by pickleball, it’s increasingly being embraced by what Raymer described as a “youth invasion”.

That was evident at Riverside Park last week when Mount Airy’s Emily Bradley took to the courts.

“I just started playing,” the young mum-of-four said, adding that she got involved at the request of a family member.

Bradley, who played tennis in high school, said pickleball is easier than the traditional sport.

Her children also love to play pickleball, which makes for an enjoyable activity for the whole family.

“I didn’t realize it was such a big deal for older people, going out in the morning,” Bradley said of the participation of older people, some of whom are over 80.

The existing space is also heavily used later in the day, she said, arguing that an optimal time to play had to be chosen. “If we come after school, we have to wait for a court.”

Bradley and his playing partner that day, sister-in-law Sarah Bradley, are thrilled with Mount Airy officials’ decision to expand the pickleball facility.

“They need it,” Sarah said.

Tom Joyce can be reached at 336-415-4693 or on Twitter @Me_Reporter.

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