Tanglewood – $18 Million
Background: The investment unit originated an $18 million senior loan secured by a mortgage on 500 acres of entitled commercial land partially developed with a strip mall anchored by a Super Walmart located in Elizabeth City, NC and by a personal guaranty from the developer. This investment was funded in conjunction with D.E. Shaw, para pursue on a 90/10 split with Fund I. The investment unit originated an $7 million senior loan secured by a mortgage on 220 acres of entitled commercial land located across from the above referenced property and secured further by a senior mortgage on the sponsors personal residence, as well as a senior mortgage on two water front lots and a personal guaranty from the developer and his wife. This investment was funded as a clubbed transaction in conjunction with a MI entertainment & beer distribution group and further with a MI wine distributor.
Problem: A maturity default occurred.
Strategy: The investment unit presented several creative forbearance proposals to the borrower that would have extended the loan’s maturity. When those negotiations stalled, the investment unit began to enforce its rights and remedies under the mortgage and the personal guaranty pursuant to an aggressive legal strategy, creating significant pressure on the borrower.
Result: The loan was repaid in full, including default interest and penalties resulting a 33% ROI on the initial loan and a 31% ROI on the second loan.