UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act
Date of Report (Date of earliest event reported): January 7, 2008
AMERICAN REALTY INVESTORS, INC.
(Exact Name of Registrant as Specified in its Charter)
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| Nevada
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001-15663
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75-2847135 |
| (State or other
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(Commission
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(I.R.S. Employer |
| jurisdiction of incorporation)
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File No.)
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Identification No.) |
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| 1800 Valley View Lane, Suite 300 |
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| Dallas, Texas
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75234 |
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(Zip Code) |
Registrant’s telephone number, including area code 469-522-4200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the Registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c)) |
Section 8 — Other Events
Item 8.01. Other Events
On October 19, 2007, the Registrant and Basic Capital Management, Inc. (“BCM”) participated in
mediation proceedings which resulted in a Stipulation of Settlement with The Fansler Foundation
(“Fansler”) in the action styled The Fansler Foundation v. American Realty Investors, Inc. and
Basic Capital Management, Inc., pending in the United States District Court, Eastern District of
California. Such Stipulation of Settlement (which was subject to the preparation of formal
documentation) provided that the parties would cooperate fully to obtain an order for dismissal of
the case provided that the parties will cooperate to ensure Plaintiff may have such stipulation
filed in an appropriate court. Under the terms of the Stipulation of Settlement, at the time of
execution of a formal agreement covering same (which occurred January 7, 2008), the Plaintiff shall
surrender or assign at the defendants option, 1,600,000 shares of Series A Cumulative Convertible
Preferred Stock (the “Series A Stock”) originally issued by the Registrant to the Plaintiff in
exchange for payment to Plaintiff of $26,000,000 payable $4.5 million no later than 30 days after
execution of the formal settlement agreement (February 6, 2008), $4 million payable no later than
120 calendar days after execution of the formal settlement agreement (April 4, 2008) with a balance
of $17,500,000 payable in ten quarterly payments of $1,750,000 each beginning June 1, 2008 with
interest at 8% simple interest per annum with a proviso that if the full outstanding balance is
paid in full on or before September 1, 2008, all interest is waived. If interest is ultimately to
be paid on such amount, such interest is payable with the final quarterly payment. Both the
Registrant and BCM are to execute a stipulation for entry of judgment which may only be filed in
the case upon default after a 20 day grace period after which the Plaintiff is to give notice of
default to the defendants which will then have 5 business days to cure any such default. The
Stipulation of Settlement is now embodied in a final Settlement Agreement and Mutual Release which
was finally executed on January 7, 2008 by the last party; it brought an end to litigation existing
between the parties since February 2004. The Settlement Agreement has no effect upon any other
holder of Series A Stock issued by the Registrant.