Sep. 22, 2009 (Marketwire) --
FORT LAUDERDALE, FL -- (Marketwire) -- 09/22/09 -- 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.
