Local creditors line up in Capmark filing

Twenty-four creditors of a national commercial real estate lender that recently filed bankruptcy are in Richmond.

It’s not clear yet whether payments to those companies will be delayed or reduced, which can happen in a Chapter 11 bankruptcy case.

This week, Capmark Financial Group filed for Chapter 11 bankruptcy protection.
The company is a leading lender to developers of office towers, strip malls, hotels and multi-family properties.

The lender listed assets of $20.1 billion and liabilities of $21 billion as of June 30 in the filing. Last month the Pennsylvania-based company posted a quarterly loss of $1.6 billion amid rising defaults on commercial mortgages.

The lender has a local office at 707 E. Main Street.

“Our Richmond office is continuing to operate business as usual,” said John Reed, the head of the local office, in an email.

In an official statement, the company said it had about $500 million in liquid capital available to continue doing business and pay employees while it reorganizes its debt.

“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,” said Capmark president and CEO Jay Levine, in a statement.

Reed, of the Richmond office, was unable to comment further on the company’s standing. According to a number of area brokers, Capmark does not have a lot of exposure in the Richmond market, and the local office primarily originates loans that are then sold to HUD or Freddie Mac.

In the bankruptcy filing, at least 24 of the thousands of creditors had Richmond addresses. They include real estate services companies as well as city and state government. The amount owed to local creditors was not available at press time, and calls to several of the companies listed were not returned.

Many of the real estate firms were used by Capmark to evaluate the merit of loans before transferring them to over to Freddie or HUD. Ultimately the cost of the real estate services are borne by the borrower, but they are included in the bankruptcy because Capmark is on the hook until the loans close, according to a local lender with a competing firm who asked not to be named.

Wink Ewing, a senior associate at CB Richard Ellis, said the local Capmark office has some of the best mortgage brokers in the area.

“They are some of the best when it comes to multi-family and HUD,” said Ewing.

Below are the local creditors listed in the Chapter 11 claim, which was filed in U.S. District Court in Delaware:

Bradstreet Peasley PLC
City of Richmond Division of Assessments
City of Richmond Department of Community Development
Commercial Capital Access One
Commonwealth Architects
Vandeventer Black LLP
Dominion Due Diligence Group
Dominion Resources
Dynex Capital
Foundry Park I LLC
Genworth Financial Loan Servicing
GFCM LLC
Goodman and Co.
Gray Brook Mill 3503 LLC
Grubb & Ellis | Harrison & Bates
Hunton Williams LLP
LandAmerica Valuation Corp.
MGMiller Valuations Inc.
Resource Mortgage Capital
Richmond Times-Dispatch
Troutman Sanders
Virginia Department of Taxation
Virginia Housing Development Authority
White Oaks Development LLC

More reading:
For more information on the Capmark reorganization, read “Capmark Financial Group files for bankruptcy protection amid mounting loan losses” via the Chicago Tribune.

Al Harris covers commercial real estate for BizSense. Please send news tips to Al@richmondbizsense.com.