InterGroup Faces Loan Termination Notice Leading to Uncertain Future

On January 3, 2025, The InterGroup Corporation (NASDAQ: INTG) received a Notice of Termination Event related to its subsidiary, Justice Operating Company, LLC. The Notice highlighted a significant financial default involving $97 million in loans issued to Justice by institutional lenders. This default was due to Justice’s failure to repay the debt by the Forbearance Expiration date of January 1, 2025, under the Forbearance Agreement dated April 29, 2024.

Consequently, the forbearance granted to Justice by the Lender has been terminated. This termination allows lenders to exercise various rights and remedies, including loan acceleration and foreclosure on collateral. Despite efforts to refinance the debt, challenges beyond the company’s control have hindered progress. Justice entered a financing agreement with a financial advisory services provider in May 2024 but has faced obstacles in refinancing the hotel debt.

In a bid to address the situation, Justice engaged Hart Advisors Group LLC in October 2024 to negotiate modifications for senior and mezzanine loans that mature on January 1, 2025. While Justice and its mezzanine lender, PCCP, proposed modification terms, there is uncertainty regarding the outcome of these negotiations. As of the filing date, the outstanding principal and accrued interest on senior and mezzanine loans amount to approximately $78,640,922 and $27,501,893, respectively.

This development leaves The InterGroup facing uncertainties regarding the lenders’ actions and the company’s financial obligations. While Justice seeks to refinance the loans or explore alternative solutions, the future remains unpredictable amid ongoing negotiations.

The company’s stock, listed on the NASDAQ CAPITAL MARKET under the ticker symbol INTG, may experience volatility and investor scrutiny in response to these financial challenges. Shareholders and stakeholders of The InterGroup will be closely monitoring developments as the company navigates through this turbulent period.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read The InterGroup’s 8K filing here.

The InterGroup Company Profile

The InterGroup Corporation, through its subsidiaries, operates a hotel under the Hilton San Francisco Financial District name located in San Francisco, California. The company operates through three segments: Hotel Operations, Real Estate Operations, and Investment Transactions. Its hotel consists of guest rooms and luxury suites, a restaurant, a lounge, a private dining room, meeting room space, a gym, a grand ballroom, 5-level underground parking garage, a pedestrian bridge, and a Chinese culture center.