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BFC Financial Corporation: BFC Financial Corporation Announces Adoption of Shareholder Rights Plan Designed to Preserve Tax Ben

^{Published on 2009-09-22 13:12:16 - Market Wire}
 

FORT LAUDERDALE, FL--(Marketwire - September 22, 2009) - BFC Financial Corporation (PINKSHEETS: [ BFCF ]) announced today that its board of directors has adopted a shareholder rights plan aimed at preserving its ability to utilize available net operating loss carry-forwards to offset future taxable income. The rights plan, which BFC previously disclosed that it intended to adopt, is substantially similar to the shareholder rights plans that Woodbridge Holdings Corporation had in place prior to becoming a wholly-owned subsidiary of BFC pursuant to their previously announced merger. Existing shareholders will not be required to divest any shares, and the rights plan will not have any impact on the Woodbridge merger or the related issuance of shares of BFC's Class A Common Stock.

Under the Internal Revenue Code and IRS rules, net operating losses can, subject to certain requirements and restrictions, be used to offset future taxable income and reduce federal income tax liability. However, if a company experiences an "ownership change" for tax purposes, then that company's ability to use net operating losses could be substantially limited. Generally, a company will experience an "ownership change" if, at any time, one or more shareholders owning 5.0% or more of the company's common stock have aggregate increases in their ownership of such stock of more than 50 percentage points over the prior three-year period. Accordingly, BFC adopted the rights plan, which provides a deterrent to shareholders from acquiring a 5.0% or greater ownership interest in BFC's common stock in the future, in an effort to preserve BFC's ability to utilize available net operating losses.

As part of the adoption of the rights plan, BFC's board of directors declared a dividend of one right for each share of BFC's Class A Common Stock and Class B Common Stock held of record as of the close of business on September 21, 2009. These rights are not exercisable and are not transferable apart from BFC's common stock until the earlier of (i) the tenth business day after such time as a person or group acquires beneficial ownership of 5.0% or more of BFC's common stock and (ii) the tenth business day after a person or group commences a tender or exchange offer, the consummation of which would result in that person or group beneficially owning 5.0% or more of BFC's common stock. As a result, subject to certain exceptions described below, the rights plan would in the future generally result in substantial dilution to any person or group that acquires beneficial ownership of 5.0% or more of the outstanding shares of BFC's common stock without the approval of BFC's board of directors.

Any person or group that owned 5.0% or more of BFC's outstanding common stock as of the close of business on September 21, 2009 will not trigger exercisability of the rights so long as it does not acquire any additional shares of BFC's common stock or fall under 5.0% ownership of BFC's common stock and then re-acquire 5.0% or more of BFC's common stock. Additionally, any person or group who BFC's board of directors determines inadvertently exceeded the 5.0% threshold can avoid the dilutive effect of the rights by promptly divesting shares of BFC's common stock so as to reduce its interest below the threshold level. The rights plan further provides that BFC's board of directors may, in its sole discretion, exempt any person or group from the provisions of the rights plan if the board determines that such person or group's ownership of BFC's common stock would not adversely effect the tax benefits intended to be preserved by the rights plan.

The rights plan was not adopted in response to any effort to acquire control of BFC. However, the rights plan may have an anti-takeover effect and will be an impediment to a proposed takeover which is not approved by BFC's board of directors.

The rights will expire on September 21, 2019, unless they are earlier redeemed or exchanged in accordance with the rights plan or the rights plan is earlier terminated by BFC's board of directors.

Additional information regarding the rights plan and the rights will be contained in a Current Report on Form 8-K and in a Registration Statement on Form 8-A that BFC will file with the Securities and Exchange Commission (the "SEC"). These filings will be available on the SEC's Internet web site at [ www.sec.gov ].

About BFC Financial Corporation:

BFC Financial Corporation's (PINKSHEETS: [ BFCF ]) current major holdings include its wholly-owned subsidiary, Woodbridge Holdings, LLC (formerly Woodbridge Holdings Corporation), and its subsidiaries, its controlling interest in BankAtlantic Bancorp, Inc. (NYSE: [ BBX ]) and its wholly-owned subsidiary, BankAtlantic, and a non-controlling interest in Benihana, Inc. (NASDAQ: [ BNHN ]). For further information, please visit our website at: [ www.BFCFinancial.com ].

Matters discussed in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on various assumptions and involve substantial risks and uncertainties, including, without limitation, the risk that the rights plan may not prevent BFC from experiencing an "ownership change" for tax purposes in the future and the risk that BFC may not be in a position to utilize available net operating losses in the future. BFC cautions that the foregoing risks and uncertainties are not exclusive and refers its shareholders to the other risks and uncertainties detailed in reports filed by BFC with the SEC.