Capmark Files for Bankruptcy

Posted by Ray on October 25, 2009 under Main | Be the First to Comment

Capmark filed for bankruptcy tonight, which was not surprising, but it this will create a stir in the markets on Monday. It marks me happy that I am short as hell, but I am sure this is spun as some sort of green shoot, on CNBC at least.

Capmark, created out of the commercial real estate arm of GMAC, was negotiating with its creditors, Citi and JP Morgan, but apparently, that did not go as planned. The move also wipes out private equity stakes from KKR, Goldman Sachs Capital Partners and Five Mile Capital which bought Capmark for $1.5B in cash and $7B in debt. KKR already wrote down their investment in this company.

According to the bankruptcy filing, the group owned 75.4 percent of the company while GMAC, or the General Motors Acceptance Corp, owned 21.3 percent. Employees and directors owned most of the remaining stock. Equity investors are typically wiped out in bankruptcy.

Capmark listed $20.1 billion in assets and $21 billion in liabilities as of June 30, 2009 in the bankruptcy filing, which was made in U.S. Bankruptcy Court in Wilmington, Delaware.

Pretty interesting for a Sunday night and I guess this confirms the rumors about the commercial real estate business being just fine…