UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 10, 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)
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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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 4.02.
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report
or Completed Interim Review.
(b) Kohlberg
Capital Corporation (the “Company”) previously disclosed in its Current Report
on Form 8-K/A dated November 9, 2009 and Form 12b-25 dated November 9, 2009 that
it was unable to timely file its Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2009 due to ongoing discussions with Deloitte &
Touche LLP (“Deloitte”), the Company's independent public accountants, of the
application of certain accounting standards relating to valuation determinations
under Statement of Financial Accounting Standards No. 157—Fair Value
Measurements (“SFAS 157”) included in its financial statements for the fiscal
year ended December 31, 2008 in the Company's Annual Report on Form 10-K for
such fiscal year and its financial statements for the interim quarterly periods
ended March 31, 2009 and June 30, 2009 in the Company’s Quarterly Reports on
Form 10−Q for those respective periods (collectively, the “Financial
Statements”). As previously disclosed, the discussions with Deloitte
commenced following an internal inspection process by Deloitte of its audit of
the Company's financial statements for the fiscal year ended December 31, 2008
as a result of which certain questions were raised by the Deloitte employees
conducting the internal inspection regarding Deloitte’s documentation of the
methodology and procedures used to prepare the valuations reflected in the
December 31, 2008 financial statements. As a result, certain
questions were then raised by Deloitte regarding the Company's methodology and
procedures for valuing its loan portfolio investments under SFAS
157. As also previously disclosed, Deloitte then requested
supplemental information from the Company beyond that which was previously
requested by Deloitte and provided by the Company for purposes of its prior
review of each of the Financial Statements and preparation of its opinion
covering the Financial Statements for the fiscal year ended December 31,
2008. The Company provided such additional information and has
engaged in an ongoing dialogue with Deloitte with respect to alternative
methodologies and procedures that would be acceptable to Deloitte in valuing the
Company's investments under SFAS 157.
The
Company continues to provide additional information to Deloitte as it is
requested by Deloitte and continues to review and discuss with Deloitte
valuation methodologies and procedures that would be appropriate to meet the
requirements of SFAS 157 and fairly reflect the value of the Company’s
investments as of December 31, 2008, March 31, 2009 and June 30,
2009. However, after a thorough review of, and ongoing dialogue with
Deloitte regarding, the valuation methodologies and procedures that the Company
currently believes would be acceptable to Deloitte, to date the Company has been
unable to conclude that such alternative methodologies and procedures meet the
requirements of SFAS 157 and fairly reflect the value of the Company’s
investments as of December 31, 2008, March 31, 2009 and June 30,
2009. Duff & Phelps, LLC, an independent valuation firm,
that had provided third party valuation consulting services to the Company’s
Board of Directors in connection with the Company's Financial Statements for the
fiscal year ended December 31, 2008 and for the quarterly period ended March 31,
2009, participated in certain of the discussions with Deloitte as part of the
ongoing dialogue referred to above and continued to express its view in such
discussions that, based upon the procedures performed by Duff & Phelps at
the time of its review of the Company’s valuation methodology and procedures in
connection with the preparation of such Financial Statements and its
understanding of the provisions of SFAS 157, the valuation methodology and
procedures used by the Company did not appear to be unreasonable.
Deloitte
issued an unqualified opinion on the Company’s December 31, 2008 financial
statements, which was included in the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission on March 16, 2009. The
Company is not aware of any allegation or belief by Deloitte that the
information provided by the Company to Deloitte at the time of the preparation
of the Financial Statements regarding the Company’s valuation methodology and
procedures was incomplete or inaccurate or omitted any information requested by
Deloitte at such time. On December 10, 2009, the Company and its
management were advised by Deloitte that (i) the audit report issued by
Deloitte accompanying the Company's financial statements for the fiscal
year ended December 31, 2008 in the Company's Annual Report on Form 10-K for
such fiscal year and (ii) Deloitte's completed interim reviews of the
Company's financial statements for the interim periods ended March 31, 2009 and
June 30, 2009 in the Company’s Quarterly Reports on Form 10−Q for those
respective periods should no longer be relied upon because Deloitte had changed
its position with respect to the appropriateness of the methodology and
procedures used by the Company under SFAS 157 to value the Company's investments
as of the end of each of those periods and, as a result, the Company has been
informed that Deloitte now believes, based upon such changed position and the
additional information provided to Deloitte by the Company following Deloitte’s
internal inspection process, that such Financial Statements contain material
misstatements with respect to the value of the Company’s investments included
therein. Accordingly, the Financial Statements should not be relied
upon until the foregoing matters are resolved.
The
Company’s management, the Company's Audit Committee and Deloitte have discussed
the matters disclosed in this filing.
(c) The
Company has provided Deloitte with a copy of this Current Report on Form 8−K and
has requested that Deloitte furnish a letter as promptly as possible addressed
to the Commission stating whether Deloitte agrees with the statements made by
the Company in response to this Item 4.02 and, if not, stating the respects in
which it does not agree.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On December
14, 2009, Katonah Debt Advisors, the Company's wholly-owned portfolio company,
agreed to amend the terms of the existing employment agreement with John M.
Stack. The amended and restated agreement is effective as
of December 15, 2009. Mr. Stack’s amended and restated agreement
with Katonah Debt Advisors to be employed as a managing director of Katonah Debt
Advisors and a vice president of the Company provides for an indefinite term
ending upon Mr. Stack’s resignation, death or removal with or without
cause. Under the amended and restated employment agreement, Mr.
Stack’s annual base salary is $225,000 and he is entitled to a target
annual performance-based bonus from Katonah Debt Advisors of
$175,000. As amended, the employment agreement provides that if Mr.
Stack’s employment is terminated by Katonah Debt Advisors without cause or as a
result of death or disability, he (or his designated beneficiary or estate) will
be entitled to receive (i) his base salary and contributions toward health
insurance premiums; provided, that Katonah Debt Advisors may elect to cease
continuation of base salary and contributions toward health insurance premiums
at any point six months (or one (1) year if Mr. Stack is terminated within 90
days of the completion of a change of control) after such termination; (ii) any
base salary earned but not paid through the date of termination; (iii) vacation
time accrued but not used to that date; and (iv) any bonus compensation to which
Mr. Stack is entitled in respect of the year of termination, prorated to the
date of termination, all on the condition that he sign a release of
claims. His employment agreement also contains non-competition
covenants and provisions governing termination, death and
disability.
Item
7.01 Regulation FD Disclosure.
On
December 15, 2009, the Company issued a press release announcing the declaration
of a dividend of $0.20 per share on shares of its common stock for the quarter
ended December 31, 2009. A copy of the press release is attached as
Exhibit 99.1 and incorporated by reference in this Item 7.01.
The
information in this Item 7.01 and Exhibit 99.1 attached hereto are being
furnished and shall not be deemed “filed” for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
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Exhibit
No.
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Document | |
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99.1
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Press
Release issued by Kohlberg Capital Corporation dated December 15,
2009
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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
(Registrant)
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December 15,
2009
(Date)
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/s/ Michael I.
Wirth
Michael
I. Wirth
Chief Financial
Officer
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Exhibit
Index to Current Report on Form 8-K
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Exhibit
No.
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Document | |
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99.1
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Press
Release issued by Kohlberg Capital Corporation dated December 15,
2009
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Exhibit
99.1
Kohlberg
Capital Corporation Declares 2009 Fourth Quarter Dividend of $0.20 per
Share
NEW YORK,
December 15, 2009 (PRIME NEWSWIRE) -- Kohlberg Capital Corporation (NASDAQ:
KCAP)
(“Kohlberg Capital”) today announced that its Board of Directors has declared a
cash dividend of $0.20 per share on shares of its common stock for the quarter
ended December 31, 2009. The dividend is payable on January 25, 2010
to shareholders of record as of December 28, 2009.
The cash
dividend is comprised of Kohlberg Capital’s estimate of net investment income
for the quarter ended December 31, 2009 as well as a portion of its estimated
undistributed taxable income for the year. Kohlberg Capital estimates that
approximately $0.05 to $0.07 per share of additional distributable taxable
income for 2009 will be distributed in 2010.
We have
adopted a dividend reinvestment plan ("DRIP") that provides for reinvestment of
our dividends on behalf of our stockholders, unless a stockholder elects to
receive cash. As a result, if we declare a cash dividend, our stockholders who
have not “opted out” of our dividend reinvestment plan will have their cash
dividends automatically reinvested in additional shares of our common stock,
rather than receiving the cash dividends. Please contact your broker
or other financial intermediary for more information regarding the
DRIP.
About
Kohlberg Capital Corporation (KCAP):
Kohlberg
Capital Corporation is a publicly traded, internally managed business
development company. Our middle market investment business
originates, structures, finances and manages a portfolio of term loans,
mezzanine investments and selected equity securities in middle market companies.
Our wholly-owned portfolio company, Katonah Debt Advisors, manages CLO Funds
that invest in broadly syndicated corporate term loans, high-yield bonds and
other credit instruments.
Kohlberg
Capital Corporation’s filings with the Securities and Exchange Commission,
earnings releases, press releases and other financial, operational and
governance information are available on Kohlberg Capital’s website at www.kohlbergcapital.com.
Contact:
Kohlberg
Capital Corporation
Denise
Rodriguez, Investor Relations
(212)
455-8300
info@kohlbergcapital.com