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    Mark Joachim Comments on Planned Darden Restaurants REIT Spinoff

    August 20, 2015

    Bankruptcy & Financial Restructuring partner Mark Joachim spoke with the Deal Reporter after Darden Restaurants announced it intended to move forward with a REIT spinoff, despite resistance from some of the company's major bondholders.

    The article reported that while, "A court may be skeptical of Darden's claim that the planned spinoff does not require bondholder consent, the Orlando, Florida-based restaurant chain owner should still be able to obtain its aims through a settlement or a refinancing." Darden Restaurants announced plans in late June for a REIT spinoff and additional sale leasebacks.

    Mr. Joachim told the publication that the best way to guarantee the success of the spinoff would be to simply refinance the $450 million in long dated bonds and that doing so would probably require accepting a higher interest rate and possibly paying a call premium. He also noted that by divesting its real estate and taking on new lease payments, Darden is leaving bondholders with a claim on a smaller company with potentially volatile cash flows.