Company: INTG
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006758
Chunk: 76

Company: INTERGROUP CORP
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 76
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 InterGroup agreed to become an additional guarantor under the limited guaranty and an additional indemnitor under the environmental
indemnity for Justice Investors limited partnership’s $97,000,000 mortgage loan and the $20,000,000 mezzanine loan. Pursuant to
the agreement, InterGroup is required to maintain certain net worth and liquidity. As of December 31, 2023, InterGroup is in compliance
with both requirements. Operating has not been meeting certain of its loan covenants such as the Debt Service Coverage Ratio (“DSCR”)
which would trigger the creation of a lockbox by the Lender for all cash collected by the Hotel. However, such lockbox has been created
and utilized from the loan inception and will be in place up to loan maturity regardless of the DSCR.

In
order to refinance the Hotel’s aforementioned debt, in May 2024, the Company entered into a financing procurement agreement with
a global provider of financial advisory services to real estate owners. The Company will endeavor to refinance the aforementioned loans
prior to their new maturity.

Four
of the Portsmouth directors serve as directors of InterGroup. The Company’s Chief Operating Officer was elected President of Portsmouth
in May 2021. The Company’s director and Chairman of the Audit Committee, William J. Nance.

As
Chairman of the Executive Strategic Real Estate and Securities Investment Committee, the Company’s President and Chief Executive
Officer (CEO), John V. Winfield, directs the investment activity of the Company in public and private markets pursuant to authority granted
by the Board of Directors. Mr. Winfield also serves as Chief Executive Officer and Chairman of the Board of Portsmouth and directs the
investment activity of Portsmouth. Effective June 2016, Mr. Winfield became the Managing Director of Justice and served in that position
until the dissolution of Justice in December 2021. Depending on certain market conditions and various risk factors, the Chief Executive
Officer and Portsmouth may, at times, invest in the same companies in which the Company invests. Such investments align the interests
of the Company with the interests of related parties because it places the personal resources of the Chief Executive Officer and the
resources of Portsmouth, at risk in substantially the same manner as the Company in connection with investment decisions made on behalf
of the Company.

    -19-

NOTE
12 – ACCOUNTS PAYABLE AND OTHER LIABILITIES

The
following summarizes the balances of accounts payable and other liabilities as