Head up your Arsenal, or Glass Half Full, makes no difference if you are bankrupt.
Its a perfect storm for a property developer
- Cashflow has dried up, who is buying?
- Extremely difficult to refinance, mezzanine has dried up and the 1st tier lenders are risk averse
- Negative equity, asset value has decreased and may be below the level of borrowings and outstanding interest.
Knit one Pearl one...
(typing while JD was posting)
The receivership of these 2 companies isn't particularly worrying for me at least, they are just basic property owning vehicles, we know his "empire" is basically done for the exact reasons Dino10 outline and this type of thing is going to be increasingly common. It's the cross guarantees that worry me, if you can just sell down the non-performing assets and the banks take a hit then that's fine but if lenders can come after him personally, or against his main holding companies for shortfalls on his loans then again that is a problem.
It also raises the question as to whether any of his lending is secured against the club or the shares in the club.
james dean2011-05-26 22:27:25