The Distressed Debt Alert

CIT Group Secures $800M in Facility Commitments to Support Lending

CIT Group, a major provider of financing to middle market companies, said it closed two new finance facility commitments for its trade finance and U.K. vendor finance businesses totaling $800 million.

Citibank and Deutsche Bank were the lenders for the facility commitments.

In addition to securing the finance facilities, CIT Group sold $500 million in corporate finance assets, which were principally cash flow loans.

The lender also prepaid $1.25 billion in first lien debt on a pro rata basis across outstanding tranches. The firm has now repaid nearly half of its first lien debt and has about $4 billion in outstanding first lien debt.

Source: Press Release

Funds managed by Fortress Investment Group agreed to acquire CW Financial Services from majority shareholder Otera US Holding Inc.

CW Financial Services, which is branded as CWCapital, provides servicing, special servicing, investment management, advisory and origination services for commercial and multifamily real estate debt.

Transaction terms were not disclosed.

Fortress said it expects the deal to be completed sometime in the third quarter.

CWCapital holds an investment management, servicing, and special servicing portfolio of $183 billion in loans and securities.

Source: Press Release

Seattle attorney Marc L. Barreca was appointed to serve as a judge for the U.S. Bankruptcy Court for the Western District of Washington.

Barreca will be sworn into office July 12, replacing Judge Thomas Glover, who will retire July 10.

Barreca is currently a partner in the K&L Gates law firm's Seattle office.

Source: Press Release

Turnaround management firm Alvarez & Marsal said it expanded its business practice in Europe to include real estate advisory services.

The firm said it expanded its real estate services to Europe because of the high amount of real estate debt in the region coming due over the next few years.

Alvarez hired Scott Morey, a former chief operating officer and chief financial officer of a West African developer, as managing director and head of the firm's European real estate services. Prior to his stint with the West African developer, Morey held positions as senior vice president at Equity Office Properties and as a partner at Ernst & Young Kenneth Leventhal.

Source: Press Release

Crystal Financial, a commercial finance company for middle market businesses, named Andrew Hettinger as managing director of originations in its Atlanta office.

Hettinger was a managing director responsible for originating and managing new debt investments at Cerberus Capital Management prior to joining Crystal.

He previously held positions as director at Houlihan, Lokey, Howard & Zukin and senior vice president at Deutsche Bank, where he originated and structured senior and mezzanine loans to private equity groups and middle market companies.

Source: Press Release

Gloucester Engineering Co., a provider of equipment for the plastics extrusion and converting industry, said it filed to convert its involuntary Chapter 7 bankruptcy to a Chapter 11.

Three of the Gloucester, Mass.-based company's unsecured creditors, Plastifar, Ranor Inc. and Hub Technologies, filed for an involuntary Chapter 7 in March claiming nonpayment of over $478,000 of unsecured trade debt, according to court filings.

Ranor holds about $235,000 in debt, Plastifar holds $203,000, and Hub is owed $40,000.

Plastifar and Hub filed a petition in April to withdraw the involuntary Chapter 7 filing after negotiating with Gloucester Engineering and determining that they would probably not receive any payment in liquidation as secured creditors hold over $13 million in debt. The court denied their petition to withdraw on June 3.

Gloucester Engineering filed to convert to Chapter 11 last week and said that an affiliate of Blue Wolf Capital Fund II agreed to provide it with $6 million in debtor-in-possession financing to fund Gloucester Engineering's operations while it restructures.

Source: Press Release

Private equity firm Marathon Asset Management said it completed two transactions involving distressed commercial real estate as it purchased a defaulted note on a residential condominium rental project and provided a $24 million mortgage for a hotel whose owner had less than 30 days to finalize a discounted refinancing of his property.

Marathon purchased the defaulted note, which was secured by a St. Petersburg, Fla., condo project, from a commercial bank and plans to either negotiate a settlement with the borrower or assume control of the project, the firm said in a statement.

It also funded a mortgage to refinance a 386-room, 13-story hotel in New York for a borrower who had less than a month to obtain funds to take advantage of a discounted loan payoff from a third-party lender.

Source: Press Release