Company: RILYN
Filing Date: 2025-01-14
Form Type: 10-Q
Source: 0001628280-25-001398
Chunk: 180

Company: B. Riley Financial, Inc.
Filing Date: 2025-01-14
Form: 10-Q
Item: Part I, Item 2
Chunk 180
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 $(187.8) million and $52.5 million, respectively. During the three and six months ended June 30, 2024, we recorded $(151.1) million and $(168.4) million of fair value adjustments to the loan receivable from Vintage Capital Management, LLC ("VCM"). The fair value adjustments are related primarily to the decline in the equity fair value of Freedom VCM Holdings, LLC which, along with certain guarantees, is the primary collateral for this loan. The decline in equity fair value of Freedom VCM Holdings, LLC is primarily due to increases in net debt as well as declines in Freedom VCM Holdings, LLC’s investment in Conn’s, Inc. common stock, and a decrease in the operational performance of Freedom VCM Holdings, LLC’s various business units. Subsequent to June 30, 2024, the collateral value for the VCM loan receivable was impacted due to the filing of Freedom VCM’s voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024. The fair value of the underlying collateral for this loan subsequently decreased to a fair value of approximately $2.2 million at September 30, 2024. The $45.5 million of loans receivable from Core Scientific, Inc. (“Core Scientific”) at December 31, 2023 included a loan in the amount of $42.1 million that was settled in full upon Core Scientific’s exit from Chapter 11 bankruptcy in January 2024. The Company received common shares of Core Scientific in accordance with the bankruptcy emergence plan which became publicly traded. The Company received Core Scientific common stock with a fair value of $50.4 million for settlement of the $42.1 million loan receivable. The fair value of the Core Scientific common stock received was measured using an amount that approximated the share price of Core at emergence from bankruptcy as set forth in Core’s bankruptcy emergence plan and a gain in the amount of $9.1 million was recognized.

During the three and six months ended June 30, 2024, we recorded $(12.0) million and $(13.7) million of fair value adjustments to the loan receivable for Freedom VCM Receivables, Inc.. The fair value adjustments are related to higher projected charge offs of receivables on the consumer receivable portfolio that are currently serviced by Conn's, Inc. which is expected to be impacted by Conn’s voluntary petition filing on July 23, 2024 for