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) April 16, 2007
Regency Affiliates, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-7949 72-0888772
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
610 N.E. Jensen Beach, Florida 34957
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (772) 334-8181
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(Former name or former address, if changed since last report.)
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:
|_| 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 240.13a-4(c))
ITEM 8.01. OTHER EVENTS.
On January 20, 2004, a lawsuit was filed by two dissident Company shareholders,
Edward E. Gatz and Donald D. Graham, in the New Castle County Court of Chancery,
Delaware (the "Court"), captioned Gatz, et al. v. Ponsoldt, Sr., et al., naming
as defendants certain current and former directors of the Company, Royalty
Holdings, LLC, the Company's majority shareholder, and certain of its
affiliates, Statesman Group, Inc., a former shareholder of the Company, and,
nominally, the Company (the "Delaware Action"). The complaint alleged various
breaches of fiduciary duties by the former directors and Statesman, and that
Royalty and its affiliates knowingly participated in certain of the alleged
breaches. Between November 2004 and May 2006, the Court dismissed the all of the
claims alleged in the complaint determining that the claims were derivative in
nature and could therefore not be maintained by the plaintiffs. Plaintiffs
appealed the Courts decision in December 2006. In its April 16, 2007 decision,
citing an intervening legal development in the area of direct and derivative
claims arising while the appeal was pending, the Supreme Court of the State of
Delaware reversed the Court's decision and remanded the case to the Court for
further proceedings.
The defendants in the Delaware Action, other than Statesman, are entitled to be
indemnified by the Company for damages, if any, and expenses, including legal
fees, they may incur as a result of the lawsuit, subject to certain
circumstances under which such indemnification is not available. In addition,
the Company's insurance carrier contends that none of the claims contained in
the Delaware Action are covered by insurance on the basis of the "insured vs.
insured" exclusion since one of the plaintiffs, Donald D. Graham, was previously
a director of the Company.
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.
REGENCY AFFILIATES, INC.
By: /s/ Laurence S. Levy
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Name: Laurence S. Levy
Title: President
Date: April 30, 2007