UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION
13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): September 1, 2009
Kohlberg
Capital Corporation
(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
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814-00735
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20-5951150
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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295
MADISON AVENUE
NEW
YORK, NY
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10017
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (212) 455-8300
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written communications pursuant to Rule
425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 8.01. Other Events.
On August
28, 2009, Kohlberg Capital Corporation (“KCAP”) and Kohlberg
Capital Funding LLC I, KCAP’s wholly-owned, special-purpose subsidiary (“KCAP Funding” and,
together with KCAP, “we” or the “Company”), filed a
complaint (the “Complaint”) in the
Supreme Court of the State of New York against BMO Capital Markets Corp. (the
“Agent”) and
the other lender parties (collectively, the “Defendants”) to the
Loan Funding and Servicing Agreement, dated as of February 14, 2007, as amended
(the “LFSA”),
by and among KCAP, KCAP Funding and the Defendants. As previously
reported, we have been in discussions with the Agent relating to the Agent’s
assertion that we are in breach of our obligations under the
LFSA. The Complaint reflects our belief that such assertion is
without merit and seeks to clarify our rights and obligation under the
LFSA.
In
particular, the Complaint alleges that the Defendants improperly failed to make
advances to KCAP Funding in violation of the terms of the LFSA; that the
Defendants’ termination of the revolving period was wrongful and improperly
triggered the amortization period and default interest rate under the LFSA; that
the Defendants’ failure to provide relevant documents and disclose information
to enable the Company to cure the alleged defaults constitutes material breaches
of their obligations under the LFSA; and that the Defendants’ actions amount to
a scheme to avoid their obligations owed to us under the LFSA (i.e., their
obligation to lend money on the terms specified in the LFSA) and an anticipatory
repudiation of such obligations, thus resulting in extensive and irreparable
harm to us and a suspension and/or discharge of our obligations under the
LFSA. Based on the foregoing, the Complaint requests the court to,
among other things:
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render
a declaration that the termination notices were unlawful and invalid and
that a termination date under the LFSA has not
occurred;
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order
specific performance of the Defendants’ obligations to make further
advances under the LFSA, to withdraw the termination notices and to
refrain from charging the default rate of
interest;
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award
us a judgment suspending and/or discharging our obligations under the LFSA
(as appropriate) as well as a judgment against the Defendants in an amount
to be determined at trial (but no less than $5,000,000);
and
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award
us the costs, disbursements and attorneys’ fees of the
action.
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While we
intend to vigorously litigate our claims set forth in the Complaint, neither the
outcome of this litigation nor the amount and range of potential damages
recoverable by us or our exposure associated with this litigation can be
determined at this time. Pursuant to the LFSA, we are obligated to
indemnify the Defendants and their respective affiliates, officers, directors,
employees and agents against all of their losses, expenses (including reasonable
attorneys’ fees) and non-monetary damages arising out of or as a result of the
LFSA, except to the extent resulting from their fraud, gross negligence or
willful misconduct.
Cautionary
Statement Regarding Forward-Looking Statements
This
Current Report on Form 8-K (this “Report”) contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The matters discussed in this Report that are
forward-looking statements are based on current management expectations that
involve substantial risks and uncertainties which could cause actual results to
differ materially from the results expressed in, or implied by, these
forward-looking statements. Forward-looking statements relate to future events
(including the outcome of the litigation described above) that may have an
impact on us or our business. We generally identify forward-looking statements
by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,”
“could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,”
“predict,” “potential” or “continue” or the negative of these terms or other
similar words. Important assumptions for the forwarding-looking statements
contained in this Report include our ability to meet the burden of proof
relating to the facts alleged in the Complaint and whether the Defendants’
actions constitute willful misconduct under the LFSA. In light of these and
other uncertainties, the inclusion of a forward-looking statement in this Report
should not be regarded as a representation by us that our plans or objectives
will be achieved. Further information about factors that could affect
our business and operations is included in our filings with the Securities and
Exchange Commission. We do not undertake to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required to be reported under the rules and
regulations of the Securities and Exchange Commission.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Kohlberg
Capital Corporation
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(Registrant)
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September 1, 2009
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/s/
MICHAEL I. WIRTH
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(Date)
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Michael
I. Wirth
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Chief
Financial Officer
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