Capmark Financial Group Files Chapter 11

Commercial lender Capmark Financial Group Inc. has announced that the company and certain subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

Capmark intends to use the reorganization process to implement a restructuring that reduces its corporate debt and maximizes value for its stakeholders. Capmark's businesses are continuing to operate in the ordinary course.

Capmark Bank, which recently received $600 million of new equity from Capmark, is not part of the filing. The Chapter 11 proceedings are not expected to have an impact on Capmark Bank, its existing lending commitments and deposits, or its ability to conduct trust services, the organization says.

As of Oct. 23, Capmark and its filing subsidiaries had in excess of $500 million of cash and cash equivalents (excluding cash held by Capmark Bank) available to fund its operations. Capmark believes it has sufficient current liquidity to continue to satisfy customary obligations associated with ongoing operations of its business, including payment of employee salaries and benefits in the ordinary course, payment of post-petition obligations, servicing advances and funding of loans.

"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," says Jay Levine, president and CEO of Capmark. "By constraining the availability of capital, these difficult market conditions had a negative effect on all our core businesses."

The Capmark subsidiaries filing for Chapter 11 protection include Capmark Finance Inc., Capmark Capital Inc., Capmark Equity Investments Inc., Mortgage Investments LLC, Net Lease Acquisition LLC, SJM Cap LLC, Capmark Affordable Equity Holdings Inc., Capmark REO Holding LLC, Summit Crest Ventures LLC, Capmark Affordable Equity Inc. and 33 other Low Income Housing Tax Credit entities.

In addition to Capmark Bank, the following subsidiaries have not filed for Chapter 11 at this time: Capmark Investments LP, Capmark's registered investment advisor; Capmark Securities Inc., its registered broker dealer and its Asian, Indian and European subsidiaries.

SOURCE: Capmark Financial Group Inc.


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