Dow Jones Newswires Features Highly Successful Debt Restructuring Case by Commercial Debt Management Firm Covendium

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The work of Covendium, the leading commercial debt management specialist, was highlighted in a recent Dow Jones Newswires feature. The article told the story of Covendium’s successful renegotiation of millions in liabilities on behalf of a client caught up in the housing market collapse.

I want to do what’s right for the client, but I also want to do what’s right for the bank.

Covendium, the nation’s largest debtor-side commercial debt restructuring and advisory firm, was recently featured in an article on Dow Jones Newswires, “Adviser Reweaves a Tangled Web of Debt.” In the piece, Covendium CEO Gregg Grauer recounts how the debt management firm was able to help a client rightsize his business, which included extensive property holdings that lost most of their value in the 2008 credit crisis.

The client’s obligations included 58 properties, and the loss of value that accompanied the housing market collapse had left him behind payment by $20 million; his $500,000 in monthly payments barely covered the interest amount, let alone the remaining $96 million principal balance. Because the business included family holdings, he had decided that bankruptcy was too disruptive an option.

“This was a legacy business that had gone through the family,” Grauer told the reporter. “A large part of his extended family’s net worth was tied up in these projects.”

Covendium set out to help the client get a handle on his total debt load and renegotiate his debt service payments to a manageable amount, so he would avoid bankruptcy. The debt restructuring specialist gave the clients’ creditors an appraisal of his complete financial circumstances, and laid out the likely recoup amount if the banks initiated foreclosure.

The article highlights one of the successful renegotiations by Covendium on behalf of the client: an unfinished condominium development that had been purchased at $3.6 million, but was now worth barely over $1 million. After several meetings with the board of the bank that held the debt, a settlement was reached: the client agreed to invest another $400,000 to finish the condominiums, then maintain and sell them off. The bank agreed to wipe clean the remaining $2.6 million in unpaid principal.

The settlement worked for both the client and the bank: he was able to eliminate an unsustainable debt load, and the bank was able to avoid having to take control of an overvalued, unsellable property.

Through tough and honest negotiations with the clients’ creditors, Covendium was able to turn around his fortunes. By the end of their negotiations, Covendium had taken the client from the red to the black without a single property foreclosure.

“I want to do what’s right for the client, but I also want to do what’s right for the bank,” Grauer stated in the article. “It might sound paradoxical, but you also have to meet the bank’s needs because otherwise you won’t get a deal.”

For more information about the Dow Jones Newswires article, or any of Covendium’s products or services, call them at (407) 284-4000, or view them on the web at http://www.covendium.com.

About Covendium
Covendium specializes in comprehensive commercial debt resolution, restructuring and business consulting for clients whose financial model has been compromised by the economic downturn and the bank liquidity crisis.

For some clients, all they need is an experienced negotiator to provide their lender with the reality of the financial situation and the tool-set to restructure their obligations. For other clients, Covendium provides business consulting and access to non-bank funding sources.

Their team of professional advisors has successfully restructured billions in transactions, with dozens of banking institutions (including major national, regional and community banks) and over 30 separate non-bank financial counterparties.

Bad things happen to good people. Covendium is a premier national debt resolution firm that helps their clients with everything from commercial foreclosure to debt management to commercial debt restructuring to private debt placement.

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Gregg Grauer
Covendium
(407) 284-4370
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