The Distressed Debt Alert

Wells Fargo, LNR to Unload $2B of CRE Loans, Bloomberg Says

Wells Fargo & Co. and LNR Property Corp. plan to sell a total of $2 billion worth of distressed commercial real estate loans and assets, Bloomberg reported.

Wells Fargo wants to sell up to $1 billion of office and hotel loans and assets, while commercial mortgage-backed security special servicer LNR looks to sell $1 billion of defaulted loans.

Source: News Story

Copper King Mining Corp., which operates a $60 million copper mill near Milford, Utah, filed for Chapter 11 bankruptcy, the Salt Lake Tribune reported.

Source: News Story

Barcalounger Corp., which began making reclining chairs 70 years ago, filed for Chapter 11 bankruptcy and has agreed to sell all of its assets, Reuters reported.

HPC3 Furniture Holdings, an affiliate of Hancock Park Associates, has agreed to bid $1.5 million for the company's assets as the stalking horse bidder.

Source: News Story

Alvarez & Marsal expanded its turnaround management and business advisory presence in Eastern Europe as it opened an office in Warsaw, Poland, which will be led by new managing director Thomas Kolaja.

Kolaja was the founder of Warsaw-based Kolaja & Partners, an interim management and restructuring firm serving Central and Eastern Europe. He has 20 years of experience working with private equity firms, banks and multi-national companies on restructuring and business strategy, Alvarez said.

Source: Press Release

Out of nearly 100 non-financial companies that defaulted on debts through distressed exchanges in 2009, many are at risk of another default, Moody's Investors Service said in a report.

About 75% of companies rated by Moody's that defaulted through distressed exchanges in 2009 are currently rated Caa1 or lower by the credit rating agency. About 30% are rated Caa2 or lower, which indicates a high risk of default in the near to medium term, according to Moody's.

Source: Press Release

U.S. commercial real estate prices fell by 50 basis points in March, which was the second straight month of decline after a slight rebound earlier in the year, Moody's Investors Service said.

Prices are down 24.9% from a year ago, down 40.5% from two years ago and are now 42.1% below the peak values they reached in October 2007, according to Moody's/REAL Commercial Property Price Indices.

Prices had been hovering in a range of 40% to 44% below peak values for the past eight months. Prices are now 2.9% above their recession low of October 2009.

Moody's indices that track different commercial property types showed a price increase of 3.3% for apartments and an increase of 80 basis points for industrial properties in the first quarter. Office property prices declined by 3.2%, and retail property prices fell by 4.7% in the first quarter.

Source: Press Release

An affiliate of Aurora Capital Group said it agreed to purchase Parking Company America Airports out of bankruptcy.

Aurora Resurgence, a Los Angeles-based private equity fund that invests in debt and equity securities of middle market companies, won bankruptcy court approval to purchase PCAA's assets.

PCAA, based in Philadelphia, operates 27 parking lot facilities with 30,000 parking spaces near domestic airports.

Source: Press Release

Construction equipment rental company Neff Rental Inc. filed a prearranged Chapter 11 bankruptcy to eliminate more than $400 million in debt.

Wayzata Investment Partners and Apollo Capital Management, which hold more than 67% of the aggregate principal amount of Neff's first lien term loans, agreed to the reorganization plan and will exchange their first lien term loans for equity in the company, Neff said in a statement. Wayzata and Apollo also agreed to recapitalize Neff with up to $119 million in new equity.

The Miami.-based company said it received full commitments from its existing revolving lenders to provide $175 million in debtor-in-possession and exit financing.

Neff said its management and employees will continue to operate the business through the restructuring. The DIP financing will provide ample liquidity to fund daily operations without interruption, including payments to venders and meeting all customer and employee obligations, the company said.

Source: Press Release

Harbour Litigation Funding, a litigation funding company based in London, said it closed its new £60 million ($88 million) Harbour Litigation Investment Fund that will finance corporate law suits prompted by the credit crunch, the Financial Times reported.

The fund will invest primarily in U.K.-based commercial legal actions, including arbitrations.

Source: News Story