Shores of Panama finally auctioned off
An court order on March 6, 2009 confirmed the sale of the Shores of Panama condo development to the holder of the secured loan, Silverton Bank (successor to Vision Bank). Silverton Bank held a claim of around $73 million.
Apparently, even though the auction was carried out “pursuant to the Procedures Order” and marketed by NorthMarq Realty, there were no qualified bidders other than Silverton Bank. As such, Silverton won the auction by submitting a bid of $68.7 million (lower than the $80 million minimum bid discussed in earlier bankruptcy proceedings). No cash exchanged hands as the purchase price was paid with a credit bid (i.e., an offset of the secured claim held by Silverton).
Our fellow analysts at The Downturn Analyst have written a Restructuring Strategies Report to capture a blow-by-blow account of bankruptcy proceedings culminating in this sale - learning material for young restructuring professionals coping with the wave of home builders’ bankruptcies.
[...] Panama is now auctioned off… Actually, a recent court order in March has confirmed that the bankrupt Shores of Panama condo development is now auctioned off to Silverton [...]
The remaining 370 units(averaging 1189 sq ft each) at Shores were auctioned off, and Silverton purchased the property, free and clear of all liens, for less that $160 per sq foot.
It was a very sad day for many of us. Personally, I argued in court that the units were worth $200 per sq foot, and that they should be auctioned on an individual basis so that the unsecured creditors could recover $20 million of their money, $252,930 dollars of which is mine! The court sided with Silvetons attorney’s and confirmed the sale.
Since the sale, Silverton has immediately put the units on the market for $225 per foot, and has many sales pending at that price. Now, they get to keep all the profit, instead of it going to the creditors that it belongs to.
Most recently, the OCC and FDIC are watching Silverton very close though.
Jenn