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10. 148 Room Hotel

SITUATION:

The Ltd. owned and operated a five story, 148-room hotel. The Note originated in January 1998 with a principal amount of $5,580,652. Hotel visitors began declining in late 2007, and with the economy worsening, the Ltd. Found itself unable to cover debt service. A foreclosure proceeding was initiated and the Mitigation Team was brought on to negotiate a solution with less than a month before the hearing on Lender's Motion for Summary Judgment. In foreclosure, the Noteholder was seeking an unpaid balance of $6,597,313.64 and was pursuing personal guarantees.

WHAT WAS DONE:

The Mitigation Team attended a mediation one week prior to the hearing on Lender's Motion for Summary Judgment on behalf of the Property Owner. The team was able to successfully negotiate a discounted purchase of the note for $4,500,000. The team's aggressive negotiations resulted in an agreement which successfully waived defeasance and arrearages, in addition to waiving the any personal liability alleged against guarantor. Most importantly, the discounted purchase and payoff ended the litigation which was nearing a close and facilitated a sale of the loan to the Borrower.