UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) May 23, 2011
The Hallwood Group Incorporated
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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| 1-8303
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51-0261339 |
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| (Commission File Number)
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(IRS Employer Identification No.) |
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| 3710 Rawlins, Suite 1500 |
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| Dallas, Texas
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75219 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
(214) 528-5588
(Registrant’s Telephone Number, Including Area Code)
(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 (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 7.01 |
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Regulation FD Disclosure. |
Brookwood Receives Loan Waiver
As previously disclosed in the Form 10-Q of The Hallwood Group Incorporated (the “Company”)
for the quarterly period ended March 31, 2011, due to a decline in military sales for the 2011
first quarter, the Company’s Brookwood subsidiary was unable to meet the financial covenant
contained in its Working Capital Revolving Credit Facility with KeyBanc that requires income before
taxes of at least $1 in each quarter. Brookwood’s loss before taxes for the 2011 first quarter was
$299,000. Accordingly, Brookwood requested a waiver from KeyBanc for the income covenant
for the period ended March 31, 2011.
Pursuant to a letter received by Brookwood from KeyBanc dated May 23, 2011, KeyBanc
acknowledged the non-compliance of the income covenant and indicated its agreement to waive the default
for the period ended March 31, 2011. KeyBanc further noted that the continuation of any advances by
KeyBanc under the Working Capital Revolving Credit Facility does not waive or impair any of
KeyBanc’s rights and remedies under the loan agreement, nor does it establish a course of conduct
on which Brookwood should or could rely.
Additionally, KeyBanc consented to the payment by Brookwood to the Company of a cash dividend
and tax sharing payment of $1,000,000 and $589,000, respectively. Such payments will be completed
by May 31, 2011.
The information under this item in this Current Report on 8-K is provided under Item 7.01 of
Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information
under this item in this Current Report on Form 8-K shall not be deemed to be incorporated by
reference into the filings of the registrant under the Securities Act of 1933 regardless of any
general incorporation language in such filings.