Vendor Letter
Dear Valued Crescent Resources Vendor or Supplier,
I want to speak to you directly about some important news we announced today. We are taking a major step forward in securing a stronger financial foundation for Crescent Resources and for all of our stakeholders.
As part of our ongoing strategy to reduce the company's debt level and improve our capital structure, Crescent Resources, LLC and certain of our subsidiaries have filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court in the Western District of Texas, Austin Division.
It is critical that you understand that the filing and restructuring should have minimal impact on the company's continuing operations, which will remain "business as usual" throughout the process.
Importantly, we have been in active discussions with our lenders and other stakeholders on a restructuring plan that will allow us to bring our capital structure in line with the current economic environment and enable the company to emerge from bankruptcy quickly. Those discussions are continuing, and we are pleased with the ongoing support of our lenders. We believe this process will provide significantly improved resources and financial flexibility going forward.
In addition, we have secured $110 million in new financing to fund our ongoing business activities through this process. This additional funding will support our continued operations and allow us to maintain the high level of service and amenities at our properties that our residents and customers have come to expect.
During the Chapter 11 period, you will be paid in the ordinary course of business for materials, equipment and services you provide beginning today. Existing purchase orders will remain in effect. The law grants priority administrative expense status to all purchases made from this point forward.
Many of our vendors have been long-time supporters of Crescent Resources; this support does not go unrecognized. Your continuing support and cooperation will be major contributors to our success during this period and beyond. It is in our mutual best interests for Crescent to continue operating at optimum levels. We intend to continue providing the level of service and amenities our customers have come to expect. To do so, however, we ask that you continue to provide the level of service you always have.
Despite the unprecedented challenges facing the real estate industry, Crescent's underlying business model is solid with many very attractive assets. We have a highly experienced team with strong relationships and industry-leading partners. I know that during this restructuring process and beyond, our focus will remain dedicated to doing what we do best - to create, manage and sell first-class developments, communities and real estate.
Be assured we will continue to do all we can to keep you fully informed of developments relating to our restructuring process. Please feel free to call your Crescent representative or the claims agent hotline at 1-800-934-0657 if you have questions. You can also obtain copies of certain Court documents and other updates by going to www.crescent-resourcesinfo.com.
We look forward to continuing our relationship and partnership with you.
Sincerely,
Kevin H. Lambert
Chief Financial Officer