kl05086.htm
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 OF 1934
Date of
Report (Date of earliest event reported): May 28, 2008
FRANKLIN
CREDIT MANAGEMENT CORPORATION
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-17771
|
75-2243266
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
101
Hudson Street
Jersey
City, New Jersey
(Address
of Principal Executive Offices)
|
|
07302
(Zip
Code)
|
Registrant’s
telephone number, including area code: (201) 604-4402
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 (see General
Instruction A.2. below):
£ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
£
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01. Entry into a Material
Definitive Agreement.
On May 28, 2008, Franklin Credit
Management Corporation (“Franklin Credit”), entered into an agreement (the
“Bosco Servicing Agreement”) with Bosco Credit LLC (“Bosco”) and an agreement
with Bosco, a subsidiary of Bosco, and an administrator for Bosco’s lenders
(the “TriParty Agreement”), to service approximately $245 million of residential
home equity line of credit mortgage loans for Bosco (such agreements together,
the “Loan Servicing Agreements”).
Bosco is owned and controlled by Thomas
J. Axon, Franklin Credit’s chairman. The loans subject to the Loan
Servicing Agreements were acquired by Bosco on May 28, 2008.
Pursuant to the Loan Servicing
Agreements, Franklin Credit will service the mortgage loans, subject to
customary terms, conditions and servicing practices for its
industry. In consideration of its services, Franklin Credit will
receive fees based on the unpaid principal balance of the loans
subject to servicing, the collections of principal, and the collections on
principal of seriously delinquent mortgages, as well as various ancillary fees
and reimbursement of certain expenses. In addition, Franklin Credit
could receive a percentage of collections after Bosco’s indebtedness to its
lenders has been repaid in full, Thomas J. Axon has been repaid in full his
equity investment in Bosco, and Bosco's lenders and Bosco’s equity holders
have received a specified rate of return on their debt and equity
investments.
Funds collected in respect of the loans
subject to the Loan Servicing Agreements will be deposited directly into Bosco’s
lockbox account with the administrative agent for its lenders.
Under the TriParty Agreement, Franklin
Credit’s engagement to service the mortgage loans could terminate upon
occurrence of an event of default under the terms of Bosco’s indebtedness, in
addition to upon a default under the Bosco Servicing Agreement, in each case
upon transitioning of the servicing to a different servicer.
On June
3, 2008, Franklin Credit issued a press release announcing its entry into these
agreements. A copy of the press release is attached hereto as Exhibit
99.1 and is incorporated in this Item 1.01 by reference.
Item
9.01. Financial Statements
and Exhibits.
(d) Exhibits
|
Exhibit
No.
|
Description
|
| |
|
|
99.1
|
Press
Release, dated June 3, 2008, entitled “Franklin Credit Announces Servicing
Agreement.”
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
FRANKLIN CREDIT
MANAGEMENT CORPORATION
By: /s/ Paul
D.
Colasono
Name: Paul D.
Colasono
Title: Chief
Financial Officer and
Executive Vice President
Date: June
3, 2008