Commercial Real Estate Lender Capmark Seeks Chapter 11
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Capmark Financial Group announced today that Capmark and certain of its subsidiaries have filed for Chapter 11 bankruptcy. The privately owned company plans to use the filing to restructure to reduce corporate debt and increase profits for its stakeholders.
Capmark has been one of the leaders in lending to developers and investors of office towers, strip malls, hotels and other commercial properties.
The company intends to do business as usual as it navigates this path. Capmark expects not impact to its existing lending commitments and deposits or its ability to conduct trust services, while continuing to serve its customers.
"We view this reorganization process as an unfortunate but necessary response to recent unprecedented conditions in financial and commercial real estate markets, which presented a significant challenge for Capmark and similarly situated finance companies. By constraining the availability of capital, these difficult market conditions had a negative effect on all our core businesses,” Jay Levine, President and CEO of Capmark, said.
Capmark listed its assets of $20.1 billion and liabilities of $21 billion as of June 30, 2009 in its bankruptcy filings. The agent for much of Capmark's secured debt is held by Citigroup Inc (NYSE: C).
According to a Wall Street Journal report, Capmark has originated more than $10 billion in commercial-real-estate loans, in a struggling commercial-property market. The drops in the real-estate market lead to a $1.6 billion second-quarter loss.
“Over the past months, Capmark has engaged in extensive and constructive negotiations with our primary creditor constituencies to reach agreement on a plan of restructuring. We expect to complete this effort over the coming months,” Mohsin Meghji, chief restructuring officer of Capmark, said.
Capmark has been one of the leaders in lending to developers and investors of office towers, strip malls, hotels and other commercial properties.
The company intends to do business as usual as it navigates this path. Capmark expects not impact to its existing lending commitments and deposits or its ability to conduct trust services, while continuing to serve its customers.
"We view this reorganization process as an unfortunate but necessary response to recent unprecedented conditions in financial and commercial real estate markets, which presented a significant challenge for Capmark and similarly situated finance companies. By constraining the availability of capital, these difficult market conditions had a negative effect on all our core businesses,” Jay Levine, President and CEO of Capmark, said.
Capmark listed its assets of $20.1 billion and liabilities of $21 billion as of June 30, 2009 in its bankruptcy filings. The agent for much of Capmark's secured debt is held by Citigroup Inc (NYSE: C).
According to a Wall Street Journal report, Capmark has originated more than $10 billion in commercial-real-estate loans, in a struggling commercial-property market. The drops in the real-estate market lead to a $1.6 billion second-quarter loss.
“Over the past months, Capmark has engaged in extensive and constructive negotiations with our primary creditor constituencies to reach agreement on a plan of restructuring. We expect to complete this effort over the coming months,” Mohsin Meghji, chief restructuring officer of Capmark, said.
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