Company: INTG
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006758
Chunk: 56

Company: INTERGROUP CORP
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 56
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 one year after the issuance of these financial
statements.

As
disclosed in Note 9 – Related Party and Other Financing Transactions, Portsmouth has a senior mortgage loan and a mezzanine loan
totaling $100,289,000, which matured on January 1, 2024. On January 3, 2024, Portsmouth received a Notice of Default from the senior
loan special servicer, LNR Partners, LLC, and on January 14, 2024, a Notice of Default from the mezzanine lender, CRED Reit Holdco LLC,
regarding the matured loans. These notices grant the lenders various rights and remedies, including but not limited to acceleration of
the debt and foreclosure on collateral.

To
address the maturity issue, on April 29, 2024, Portsmouth entered into forbearance agreements with both its senior and mezzanine lenders,
extending the maturity date to January 1, 2025, while actively pursuing long-term refinancing solutions. However, on January 3, 2025,
Portsmouth received a Notice of Termination from the senior loan special servicer, citing a termination event due to Portsmouth’s
failure to fully repay the debt by the forbearance expiration date. As a result, the forbearance agreement was terminated, allowing the
lender to immediately exercise all rights and remedies, including acceleration of the loan and foreclosure on the collateral. Similarly,
on January 14, 2025, the mezzanine lender issued a Notice of Default, stating that the forbearance had expired and that it, too, was
entitled to exercise all available legal and contractual remedies.

Despite
these challenges, Portsmouth and the Company (the “Companies) have made significant progress toward refinancing its existing debt.
On January 21, 2025, the Companies executed a non-binding term sheet with Prime Finance to refinance the senior mortgage loan and received
and accepted new terms from its current mezzanine lender, CRED Reit Holdco LLC. The Companies are in advanced discussions with both lenders
and believe that, based on the progress of negotiations, refinancing will be successfully completed by March 2025. While no absolute
assurance can be provided, the Companies remain highly focused on finalizing the transaction. Additionally, it is in discussions with
its existing lenders regarding a potential extension of the current debt terms, should more time be required.

Throughout
the term of the debt, Portsmouth has consistently made all