A large, successful California-based contractor expands into development just as the real estate market contracts. How does the contractor contain the fallout from its ill-timed venture?

The HMS team conducted a financial analysis of all the borrowing entities to show U.S. Bank and Bank of Cascades that discounted loan payoffs would enable them to recoup more of their $10 million in loans than foreclosure and litigation against the guarantors. HMS also overcame internal resistance from one of the unsuccessful projects’ guarantors.

Numbers don’t lie: The lenders agreed to the discounted payoff and a release of all personal guarantees. Although they didn’t recover 100 cents on the dollar, they fared better than they would have with costly, protracted legal proceedings. Meanwhile, our client was able to keep its stroke of bad luck from significantly affecting its core business of contracting.
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