With projects in three states all underwater and with the added complexity of seven lenders, how does a developer avoid Chapter 11 reorganization?

HMS proposed a collateral pool repayment plan with a release of the developer’s personal guarantees which would enable the lenders to recover a larger portion of their $60 million loans. The disposition of the developer’s real estate projects would maximize the recovery to the bank compared to a foreclosure or Chapter 11 or 7 bankruptcies.

HMS obtained approval for the collateral pool repayment plan and discounted loan payoffs with a release of the personal guarantees from the lenders. The lenders (Bank of the West, Bank of America and others) were able to maximize the recovery of the non-performing loans and our client was able to avoid insolvency.

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