Transaction Overview
Our client filed Chapter 11 Bankruptcy and incurred over $1,000,000 of legal and bankruptcy fees. His entire portfolio of properties had existing debt and his equity in those assets exceeded his debts. His request to allow the debts to be restructured was refused by the courts. GSP secured a quick-close real estate based bridge loan for one year fixed at 7.9% on an interest only basis. The non-recourse loan carried a two-point lender origination fee. All other terms (size and LTV) are confidential.
Challenge: The Sponsor filed for personal bankruptcy and had a court appointed Bankruptcy Trustee who was ordered the liquidation of assets unless the Sponsor could quickly restructure and cover fees. A sizable return of equity to a credit impaired Sponsor in order to meet all financial obligations and exit bankruptcy.
Solution: GSP reviewed the Borrowers’ schedule of real estate and identified a Westwood Apartment Building that was undervalued on his balance sheet. By focusing on the “value per pound”, GSP secured a non-recourse, quick close non-institutional loan that allowed the Sponsor to pay off his existing debt and cover all bankruptcy attorney and bankruptcy trustee fees. With the bankruptcy proceedings se- aside, GSP will be secure a long-term institutional capital provider for this well positioned asset.
