Capmark Financial Group has said that Capmark and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the US bankruptcy code in the US Bankruptcy Court for the District of Delaware. Capmark’s subsidiaries filing for Chapter 11 protection include Capmark Finance, Capmark Capital, Capmark Equity Investments, Mortgage Investments, Net Lease Acquisition, SJM Cap, Capmark Affordable Equity Holdings, Capmark REO Holding, Summit Crest Ventures, Capmark Affordable Equity and 33 other low income housing tax credit entities.
Jay Levine, president and chief executive officer of Capmark, said: “We view this reorganization process as an unfortunate but necessary response to recent unprecedented conditions in financial and commercial real estate markets, which presented a significant challenge for Capmark and similarly situated finance companies. By constraining the availability of capital, these difficult market conditions had a negative effect on all our core businesses.”
Mohsin Meghji, chief restructuring officer of Capmark, said: “The Chapter 11 process will give Capmark the opportunity to restructure our balance sheet while continuing to focus on maximizing value for our principal stakeholders. Over the past months, Capmark has engaged in extensive and constructive negotiations with our primary creditor constituencies to reach agreement on a plan of restructuring. We expect to complete this effort over the coming months.”
Capmark intends to use the reorganization process to implement a restructuring that reduces its corporate debt and maximizes value for its stakeholders. Capmark’s businesses are continuing to operate in the ordinary course. However, Capmark Bank, which recently received $600m of new equity from Capmark, is not part of the filing. The Chapter 11 proceedings are not expected to have an impact on Capmark Bank, its existing lending commitments and deposits or its ability to conduct trust services.
The subsidiaries that have not filed for Chapter 11 at this time include Capmark Investments, Capmark’s registered investment advisor, Capmark Securities, its registered broker dealer and its Asian, Indian and European subsidiaries.
