Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges

v3.20.2
Restructuring Charges
 6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
Restructuring Charges Restructuring Charges
On April 13, 2020, the Company announced that it had elected to not renew the Management Agreement with PRCM Advisers on the basis of unfair compensation payable to the manager pursuant to Section 13(a)(ii) of the Management Agreement. As a result, the Company had expected the Management Agreement to terminate on September 19, 2020, at which time the Company would have been required to pay a termination fee calculated pursuant to the terms of the Management Agreement (originally estimated to be $144 million, and subsequently calculated to be $139.8 million based on actual results as of June 30, 2020). See further discussion of the termination fee calculation in Note 16 - Commitments and Contingencies. In connection with the non-renewal of the Management Agreement, the Company incurred the following costs, included within restructuring charges on the Company’s condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2020:
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2020 2020
Accrued restructuring costs at beginning of period
 $ 719    $ —   
Costs incurred and charged to expense
 145,069    145,788   
Costs paid
 (3,471)   (3,471)  
Non-cash adjustments
 —    —   
Accrued restructuring costs at end of period
 $ 142,317    $ 142,317   

The contract termination costs shown above include the accrued termination fee as well as other estimated costs incurred for legal and advisory services provided to facilitate the termination of the Management Agreement. Accrued restructuring costs are included in other liabilities on the Company’s condensed consolidated balance sheet as of June 30, 2020.
Subsequent to quarter end, on July 15, 2020, the Company provided PRCM Advisers with a notice of termination of the Management Agreement for “cause” on the basis of certain material breaches of the Management Agreement by PRCM Advisers, its agents and/or its assignees that are incapable of being cured within the time period set forth therein and certain events of gross negligence on the part of PRCM Advisers in the performance of its duties under the Management Agreement. The notice of termination specifies that the Management Agreement will terminate on August 14, 2020. No termination fee will be payable to PRCM Advisers in connection with the termination pursuant to Section 15(a) of the Management Agreement.