Seminar will assemble specialists in distressed developments - Business First of Columbus:

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During 12 years of a booming it was rare for a project to gointo foreclosure, receivership or bankruptcy. Suddenly, the market is saturated withproblen projects, and few people know how to handled them. Developers struggle to keep projects out of banks need help getting projects offthei books, and investors who buy distressed projects don’t know what to do with To get people up to speed on the issues surroundin workouts, ’s Northern California grou p in San Francisco is putting on its firs seminar this fall in Sacramentop on issues surrounding distressex developments. It’s geared toward anyone from developers and bankersx to attorneys andfinanc executives.
The association doesn’t deal with individuakl home loans. Rather it looksx at larger developmentdisasters — anything from an eight-unit commercial complecx to a 1,500-unit residential “We don’t get so much interest when times are but there is a lot of interest righy now,” said Russell Burbank, president of the Northermn California chapter of TMA and a partnef in the turnaround company Burr, LLP in San Chicago-based TMA is a nonprofit organization of turnaround professionals. “These things, when they they take everything and the kitchen sink with he said. “All kinds of people are affected when aproject fails, either as an opportunity or a loss.
” The TMA usuallyg holds its Northern California seminarxs in San Francisco, but with most of the workoutz being in locales from Fresno to Redding and Sacramentp to Reno, it made sensde to meet where the problems exist. The turnaroundf window right now is very narrow for projectss behind in payments toa bank, said Robergt Greeley, principal of Greeley, in Sacramento. He’w a turnaround specialist and is organiziny the SacramentoTMA event. Bankse have little leeway to negotiate, and they are ofteh going for liquidation as soonas possible. But that is startinbg to change. “We are just startin g to see lenders willing toreduce price.
They were not willintg to do it even twomonthz ago,” he said. “In some banks are just now willing to make loan Banks are learning that takinvg back aproperty doesn’t solve all of the If a developer of a subdivision couldn’t sell its housea at a set price, foreclosure mightg not be the best option for the “If the owner couldn’t get that why do you think you can get it with that sign on it sayinhg it is bank-owned?” Greeley said. But banks are desperate to free themselvesafrom cash-draining problem When a bank takes a loan it has to writd down the value of the loan to the appraisee value of the collateral.
To be able to hold the propertyy on the books for any length of the bank has to write that loan down to Doing that kind of adrastic write-off comes righ t out of a bank’s capital, and with regulators on the rampage abou safety and soundness, banks are doing anything to maintain capital. That means foreclose now and forgetrabout it. “Most of the bankerx are already dealingwith this. They are in the and a lot of them have been througyhthis before,” said Doug Kraft, an attorneh specializing in workouts and principal of LLP in Citruas Heights.
“You’ve got a lot of banks that are lookinf to liquidate and get out of as fastas possible, and that’s goinv to have a different outcomre than a bank that is willing to work with a developere who is still willing to keep taxees current and market the property,” Kraft The upside is that foreclosures createw opportunities for investors and partnerships to buy low and wait untipl the market improves. “If you’vre got a lot of capital and you can ride it out for acouplew years, there are some reall y good deals out there now,” Kraft The seminar will be Sept. 24 at the and featurr panels by attorneys, workout specialists, bankersd and developers.
The keynote speake r is Lt. Gov. John Garamendi. The seminar counts as continuingh education creditfor attorneys.