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OfficeMax SPE's securitization note accelerated; board suspends dividends to save $45 million
By Caroline Salls
Pittsburgh, Dec. 23 - OfficeMax Inc. bankruptcy remote entity OMX Timber Finance Investments II, LLC has received an acceleration notice in connection with a default stemming from OMX's failure to make an Oct. 29 payment on a securitization note guaranteed by Lehman Brothers Holdings, Inc., according to an 8-K filed Tuesday with the Securities and Exchange Commission.
As previously reported, OfficeMax's timber installment notes, received in connection with a 2004 timberland sale, were held by bankruptcy remote entities formed by the company.
An $817.5 million timber installment note guaranteed by Lehman was monetized through the issuance of securitization notes by OMX Timber Finance Investments II.
As a result of Lehman's bankruptcy filing, an event of default occurred under the Lehman-guaranteed installment note, and the Oct. 29 note payment was not made.
Also, OfficeMax's board of directors has suspended the payment of quarterly cash dividends on the company's common stock, effective immediately, because of the impact of continued weak economic conditions.
OfficeMax said the dividend suspension will result in a $45 million annual savings.
In addition, the company's board has approved an amendment to the OfficeMax incentive and performance plan that gives the board's executive compensation committee the discretion to establish annual incentive award performance periods that are shorter than a full fiscal year.
OfficeMax is an Itasca, Ill.-based provider of office supplies, technology products and solutions and furniture to businesses and consumers.
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