In the next step in the deconstruction of its publicly held status, the trading of common stock of Dublin, Ohio-based Dominion Homes will be suspended at the opening of business on March 31.
On March 20, the company received a "determination letter" from the NASDAQ Stock Market regarding a violation of compliance. Specifically, the company's stock, as of Dec. 17, had not maintained a minimum market value of publicly held shares of $5 million over the previous 30 consecutive trading days as required for continued inclusion. It was given until March 17 to regain compliance but failed to do so.
Though Dominion has a right to request a hearing before a NASDAQ Listing Qualification Panel, the company stated in a release that it does not plan to pursue an appeal from de-listing.
In January, Dominion confirmed that it had entered into a buyout and merger agreement where it will be acquired by a group of companies affiliated with Angelo Gordon & Co. L.P., Silver Point Capital L.P., and the company's largest shareholder, BRC Properties Inc. The Borror family, which founded Dominion, owns approximately 46% of Dominion's shares through BRC.
The company, which is active in Columbus, Ohio, and two Kentucky markets, has been struggling since 2005. Not only had Dominion gone long on owned land in its primary Columbus market during a run-up in 2003 and 2004, but it was facing a public relations crisis related to unethical sales and mortgage loan practices, documented violations, and unusually high foreclosure rates as well.
By early 2006, the Borror family had brought in a turnaround team of president and COO Jeffrey Croft, a former Pulte regional executive, and William Cornely as CFO. But improved results never materialized, and as the broader market began to turn, the pressures associated with a tenuous debt load became even more intense. The company posted net losses during each quarter in 2006, and by November of that year, hedge funds Field Point and Silver Oak Capital had purchased 73% of the company's bank debt.
Net losses continued during each quarter in 2007, and by year's end, Dominion's board relieved Croft of his duties and reallocated Cornely form his CFO position to become COO.
Under the terms of the current merger agreement, Dominion shareholders (other than the buyout group) will receive $0.65 in cash for each common share. On Friday, March 21, trading closed at $0.55. The transaction is expected to close in the first half of 2008, and it is subject to receipt of shareholder approval and satisfaction of customary closing conditions. Upon completion of the merger, Dominion will no longer be a publicly traded company.