Attached files
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| 8-K/A - Portman Ridge Finance Corp | v169934_8ka.htm |
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EXHIBIT
99.2
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Deloitte.
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Deloitte
&Touche LLP
Two World
Financial Center
New York, NY 10281-1414 USA
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Tel: +1 (212)
436-2000
Fax: +1
(212) 436-5000
www.deloitte.com
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December
23, 2009
United
States Securities and Exchange Commission
100 F
Street, N.E.
Washington,
D.C. 20549-7561
Dear
Sirs/Madams:
We have
read Item 4.02(b) of Form 8-K of Kohlberg Capital Corporation (the “Company”)
dated December 15, 2009 (the “December 15, 2009 Form 8-K”) and have the
following comments:
Except as
discussed in the following sentences we agree with the statements made in the
first paragraph. In the first paragraph, the Company asserts that
certain information was “previously disclosed” in the Company's Current Report
on Form 8-K/A dated November 9, 2009 (the “November 9, 2009 8-K/A”) and Form
12b-25 dated November 9, 2009 (the “Form 12b-25”); we note that the information
in the December 15, 2009 Form 8-K differs in some respects from the information
disclosed in the November 9, 2009 8-K/A and the Form 12b-25. We refer
to the November 9, 2009 8-K/A and Form 12b-25 for their
contents. Accordingly, we disagree with the Company's statement that
such information was previously disclosed. In addition with respect
to the fifth sentence of the first paragraph, we disagree with the Company's
statement that it “provided such additional information and has engaged in an
ongoing dialogue with Deloitte” for the reasons stated in our response to the
first sentence of the second paragraph set forth below. For purposes
of clarity, we also note that the Company is responsible for the preparation of
financial statements that present the Company's financial position, operations,
changes in net assets and cash flows in accordance with U.S. Generally Accepted
Accounting Principles, including FASB Statement of Financial Accounting
Standards No. 157 — Fair Value
Measurements (“SFAS 157”), and that such financial statements should not
be prepared solely on the basis of what “would be acceptable to
Deloitte.”
We
disagree with the statement made in the first sentence of the second
paragraph. Management essentially ceased providing substantive
information to Deloitte on December 14, 2009. Significant unanswered questions
and unfulfilled information requests remain outstanding.
We have
no basis to agree or disagree with the statement made in the second sentence of
the second paragraph. We note that the Company provided Deloitte with
(1) a revised valuation of the Company's loan portfolio investments as of
December 31, 2008 and (2) a preliminary draft Form 10-Q which includes
restatement disclosure. The revised valuation reflects a material
reduction in the fair value of the Company's loan portfolio investments as of
December 31, 2008 from the value included in the Company's financial statements
for the fiscal year ended December 31, 2008 in the Company's Annual Report on
Form 10-K for such fiscal year. For purposes of clarification, we
note that we were informed on December 15, 2009 that certain Board members had
not seen the details of the revised valuation results.
Member
of
Deloitte
Touche Tohmatsu
EXHIBIT
99.2
We agree
with the statement made in the third sentence of the second paragraph, insofar
as it does reflect statements made by Duff & Phelps, LLC (“Duff &
Phelps”) in discussions with Deloitte; however, we have no basis on which to
agree or disagree with the characterization of Duff & Phelps as being
“independent” of the Company. Further, we previously informed the
Company that we did not agree with the view of Duff & Phelps.
We agree
with the statement made in the first sentence of the third
paragraph.
We
disagree with the statement made in the second sentence of the third
paragraph. As Deloitte advised the Company on December 10, 2009, in
Deloitte's current view, the Company's financial statements for the fiscal year
ended December 31, 2008 and the Company's financial statements for the interim
periods ended March 31, 2009 and June 30, 2009 contain material misstatements
based on information recently provided by the Company concerning its valuation
methodologies and procedures under SFAS 157. Accordingly, Deloitte
now believes the information supporting the fair values reflected in the
Company's previously issued 2008 and interim 2009 financial statements was and
continues to be incomplete and inaccurate.
We agree
with the statements made in the third and fourth sentences of the third
paragraph and in the single sentence of the fourth paragraph.
Very
truly yours,
/s/
Deloitte & Touche LLP
cc: Michael
Wirth, Chief Financial Officer
Albert Pastino, Chairman of the Audit
Committee of the Board of Directors