The Distressed Debt Alert

Hines, CalPERS Sell Office Park at Bargain Price, CoStar Reports

National Office Partners, a joint venture of Hines and the California Public Employees Retirement System, sold the Station Square office Park in Silver Spring, Md., for $74.7 million, which was substantially less than the $129.8 million price that it purchased the property for in 2005, the commercial real estate web site CoStar.com reported.

Source: News Story

Colony Capital Acquisitions paid $90.5 million to the Federal Deposit Insurance Corp. for a 40% interest in a limited liability company created to hold distressed commercial real estate loans.

The portfolio includes 1,200 loans that the FDIC acquired out of 22 failed bank receiverships. The loans, which were 70% delinquent, had an unpaid principal balance of $1.02 billion.

Source: Press Release

AeroThrust Corp., a Miami-based jet engine maintenance company, filed for Chapter 11 bankruptcy and will seek a buyer, the South Florida Business Journal reported.

Source: News Story

Sunstone Hotel Investors will hand over the keys to 11 hotels to its lender Massachusetts Mutual Life Insurance Co. after stopping payments on a $246 million mortgage, the Wall Street Journal reported.

Source: News Story

Haights Cross Communications, a White Plains, N.Y.-based educational and library publisher, filed for a prepackaged Chapter 11 bankruptcy after receiving approval from its lenders and noteholders.

Source: Press Release

Classic Sleep Products, a Jessup, Md.-based mattress company, filed for Chapter 11 bankruptcy and plans to sell its assets to a new company, Classic Brands, which will receive $10 million in debtor-in-possession financing from JMX Capital Partners and CIT Financial, the Baltimore Business Journal reported.

Source: News Story

The prevalence of prearranged bankruptcies, which allow companies to exit Chapter 11 after just a few months, tripled in 2009 among publicly traded companies compared to a year before, the Wall Street Journal reported.

Source: News Story

Macklowe Properties, led by developer Harry Macklowe, and private equity firm CIM Group signed a deal to pay off creditors to regain control of the former site of the Drake Hotel in New York City, the Wall Street Journal reported.

Macklowe and CIM Group will pay creditors from 90 cents on the dollar to as little as zero, depending on the seniority of their holdings.

Source: News Story

Blackstone Group may try to control the restructuring of hotel owner Highland Hospitality after buying about $320 million worth of the most senior portion of Highland's mezzanine debt from Wachovia Corp., the Wall Street Journal reported.

Source: News Story

The TCW Group, plagued by departures of its lead investment manager and several other employees, withdrew from the U.S. Treasury's Legacy Securities Public-Private Investment Program.

Source: Press Release

Winthrop Realty Trust purchased $15.6 million worth of junior participations or B-pieces in three first mortgages and a mezzanine loan secured by distressed properties including Class A office buildings in New York City and the Los Angeles area, a retail condominium building in New York City and the Beverly Hills Hilton Hotel.

Source: Press Release

Grubb & Ellis Co.'s 2010 Real Estate Forecast says that commercial real estate fundamentals will decline more slowly this year than in 2009, bottoming out near the end of the year and beginning a slow recovery in 2011.

Source: Press Release

The owners of four luxury ski and golf resorts filed a $24 billion class-action lawsuit against Credit Suisse Group, accusing the bank of "predatory" lending that loaded the resort properties with debt that Credit Suisse could foreclose on them, the Wall Street Journal reported.

Source: News Story

Brown's Chicken & Pasta, a Chicago-area chicken restaurant chain with 36 outlets, filed for Chapter 11 bankruptcy, the Chicago Tribune reported.

Source: News Story

Blue Heron Paper Co., an Oregon City, Ore.-based producer of newsprint and specialty paper products, filed for Chapter 11 bankruptcy, the Portland Business Journal reported.

Source: News Story