UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 20, 2019

AMBASE CORPORATION
(Exact name of registrant as specified in its charter)


Delaware
1-07265
95-2962743
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification Number)


ONE SOUTH OCEAN BOULEVARD, SUITE 301
BOCA RATON, FLORIDA 33432
 (Address of principal executive offices, including zip code)


(201) 265-0169
(Registrant's telephone number, including area code)

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)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).    Emerging growth company ___
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ___





Item 1.01 Entry into a Material Definitive Agreement

In September 2017, the Company entered into a Litigation Funding Agreement (the “LFA”) with Mr. Richard A. Bianco, the Company’s Chief Executive Officer, (“Mr. R. A. Bianco”). Pursuant to the LFA, Mr. R. A. Bianco agreed to provide litigation funding to the Company, up to an aggregate amount of seven million dollars ($7,000,000) (the “Litigation Fund Amount”) to satisfy actual documented litigation costs and expenses of the Company, including attorneys’ fees, expert witness fees, consulting fees and disbursements in connection with the Company’s legal proceedings (the “111 West 57 th Litigation”) related to the Company’s equity investment in the real property located at 105 through 111 West 57th Street in New York, New York (the “111 West 57th Property”).

After receiving substantial AMT tax credit carryforward refunds in March 2019, in light of the Company’s improved liquidity, in April 2019 the Company’s Board of Directors (the “Board”) authorized the establishment of a Special Committee of the Board (the “Special Committee”) to evaluate and negotiate possible changes to the LFA. The Special Committee was comprised exclusively of the independent directors on the Board.

On May 20, 2019, after receiving approval from the Special Committee, the Company and Mr. R. A. Bianco entered into an amendment to the LFA (the “Amendment”) which provides for the following: (i) the repayment of $3,672,000 in funds previously provided to the Company by Mr. R. A. Bianco pursuant to the LFA (the “Advanced Amount”), (ii) the release of Mr. R. A. Bianco from all further funding obligations under the LFA, and (iii) a modification of the relative distribution between Mr. R. A. Bianco and the Company of any Litigation Proceeds received by the Company from the 111 West 57 th Litigation, as described below.

The Amendment provides that, in the event that the Company receives any Litigation Proceeds from the 111 West 57 th Litigation, such Litigation Proceeds shall be distributed as follows:

(i)
first, 100% to the Company in an amount equal to the lesser of (a) the amount of actual litigation expenses incurred by the Company with respect to the Company’s 111 West 57 th Litigation (including the Advanced Amount to the extent repaid by the Company); or (b) $7,500,000; and
 
(ii)
thereafter, any additional amounts shall be distributed (a) 75% to the Company and (b) 25% to the Mr. R. A. Bianco.

A copy of the Amendment is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

With respect to the 111 West 57th Litigation, the Company is continuing to pursue various legal courses of action, and is considering other possible economic strategies, including the possible sale of the Company’s interest in and/or rights with respect to the 111 West 57th Property. Additionally, the Company is continuing to pursue other options to realize the Company’s investment value and/or protect its legal rights, however, the Company can give no assurances regarding the outcome of these matters.

Item 9.01 Financial Statements and Exhibits
(d) Exhibits.

Exhibit No.
 
10.1
Amendment, dated May 20, 2019, to the September 2017 Litigation Funding Agreement between Mr. Richard A. Bianco and the Company.

SIGNATURES

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.

 
AMBASE CORPORATION
   
 
By /s/ John Ferrara  
 
John Ferrara
 
Vice President and Chief Financial Officer and Controller
 
AmBase Corporation
 
Date:  May 21, 2019

AmBase Corporation
12 Lincoln Blvd.
Emerson NJ, 07630

May 20, 2019

Mr. Richard A. Bianco
350 South Ocean Boulevard, Apt. 9A
Boca Raton, FL 33432

Re:
Amendment to the Litigation Funding Agreement dated as of September 26, 2017 (the “LFA”) between AmBase Corporation, a Delaware corporation (the “Company”) and Richard A. Bianco (“Bianco”)

Dear Mr. Bianco:

This letter agreement (the “ Amendment ”) is an amendment to the LFA by and between the Company, and you, Bianco (and together with any entity that is currently in existence or is formed by Bianco hereafter that is either wholly-owned by, or controlled directly or indirectly by, Bianco, the “ Funder ”).  Capitalized terms not defined herein shall have the meaning ascribed to them in the LFA.

The Company is currently party as plaintiff to several lawsuits relating to its equity interest in the 111 West 57th Street Property (collectively, the “ Litigations ”).

On September 26, 2017, the Company entered into the LFA with Bianco, the Company’s Chief Executive Officer, pursuant to which Bianco agreed to provide up to an aggregate amount of Seven Million Dollars ($7,000,000) (the “ Litigation Fund Amount ”) to satisfy actual documented litigation costs and expenses of the Company, including attorneys’ fees, expert witness fees, consulting fees and disbursements incurred by the Company in connection with the Litigations.

As of the date hereof, the Funder has contributed to the Company Three Million Six Hundred Seventy Two Thousand One Hundred Forty Six Dollars and Ninety Four Cents ($3,672,146.94) (the “ Advanced Amount ”) of the Litigation Fund Amount.

In March 2019, the Company received a federal tax refund of approximately Ten Million Seven Hundred Thousand Dollars ($10,700,000) (the “ Refund ”), anticipates receiving further tax refunds in subsequent years and thus no longer requires future funding by the Funder in connection with the Litigations.

On April 9, 2019, at a Special Meeting of the Board of Directors of the Company (the “ Board ”), the Board authorized the establishment of a Special Committee to evaluate possible changes to the LFA in light of the Company’s significantly improved liquidity and cash on hand as a consequence of the Refund and anticipated future refunds. The Special Committee was authorized to conduct negotiations with Mr. Bianco on an amendment of the LFA if it deemed it appropriate and in the best interests of the Company and its stockholders to do so.  The Special Committee retained and consulted with outside independent financial and legal advisors and then engaged in discussions and negotiations with Bianco.

Based on those negotiations, the Company and Bianco desire to amend the LFA to (i) provide for the repayment of funds previously provided to the Company by the Funder pursuant to the LFA, (ii) release the Funder from all further funding obligations pursuant to the LFA, and (iii) amend the relative distribution of Litigation Proceeds between Bianco and the Company pursuant to the LFA.  This Amendment shall memorialize the mutual agreement of the Funder and the Company with respect to the foregoing amendments to the LFA.

The parties hereto agree to amend the LFA, and the LFA is hereby amended, as follows:

1.   The Company hereby agrees that it will repay the full Advanced Amount to the Funder within three business days of the execution of this Amendment.

2.   The Company acknowledges and agrees that the Funder shall have and has no further funding obligations in connection with the Litigations.

3.   In the event that the Company receives any Litigation Proceeds after the date of this Amendment, such Litigation Proceeds shall be distributed in the following priority:


a)
first, 100% to the Company in an amount equal to the lesser of (i) the amount of actual litigation expenses incurred by the Company with respect the Litigations (including the Advanced Amount to the extent repaid by the Company); or (ii) Seven Million Five Hundred Thousand Dollars ($7,500,000); and


b)
thereafter, (i) 75% to the Company and (ii) 25% to the Funder.

4.   This Amendment constitutes the entire agreement between the parties with respect to the amendment of the LFA and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.


[Remainder of page left intentionally blank; signature page follows]









This Amendment shall not be modified, amended or supplemented except by a written agreement signed by the parties hereto. This Amendment may be executed in any number of counterparts (and by facsimile), each of which will be deemed an original, but all of which together will constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by facsimile, electronic portable document format (PDF) file or other means of electronic transmission will be as effective as delivery of a manually executed counterpart to this Amendment.
Please confirm your agreement to the foregoing by signing a copy of this Amendment where indicated below and returning it to the undersigned.


 
Sincerely,
 
AMBASE CORPORATION ,
a Delaware corporation
 
 
By: /s/ John Ferrara
John Ferrara
Vice President and Chief Financial Officer   and Controller
 
   


Acknowledged and Agreed:
 
 
/s/ Richard A. Bianco
Richard A. Bianco