Editor’s Note: After reading the tone of this press release, it comes to my attention that this bankruptcy might of been part of the plan so they could reorganize the debt and later down the line become profitable because the debt was at a much more manageable level. It would be hard to believe with the U.S. residential home market deteriorating that they could of not seen the commercial real estate market following suit. It will be very interesting to see how this plays out down the road.
Reuters, New York - Capmark Financial Group Inc., the commercial real estate company created through a 2006 leveraged buyout of certain GMAC assets, is preparing to file for bankruptcy possibly by the end of next week, according to a source with direct knowledge of the situation.
The company, which owns a bank that will continue to operate while it is in court, is in negotiations with lenders, bondholders and the Federal Deposit Insurance Company that will result in a filing by the end of October at the latest, the source said.
They are working on details of a debt-for-equity swap that will take place to bring the company back out of bankruptcy, he said. It is not certain how long the court process could take.
Capmark was not immediately available for comment.
Last month, Capmark said it may file for Chapter 11 bankruptcy protection after soured loans left it with a $1.62 billion second-quarter loss. It said stockholders had negative equity of $1.14 billion as of June 30.
Capmark, which has been in debt restructuring talks for many months, is being pushed to bankruptcy court by a deterioration in the commercial real estate market and its outlook over the last three months, the source said.
You must log in to post a comment.