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Loan to "Gentlemen's" Magazine Publisher

Thursday, October 19, 2017
Borrower   Publisher of several magazines, including a well-known men's magazine and several connected with the motor trade.
Loan   A three-year loan of $14.5 million. Interest was at 15% for the first year and 24% thereafter.
Collateral   First liens on two prime undeveloped sites in Atlantic City, NJ. One is an 87,000 sq. ft. parcel on the Boardwalk opposite the Central Pier which was recently appraised at $13 million. The other is a 175,000 sq. ft. parcel two blocks from the Boardwalk and close to the Convention Center which was appraised for $21 million. In addition we had a second lien on the proprietor's New York residence and his country estate in the Hudson Valley.
Guarantors   The loan was personally guaranteed by the proprietor of the borrower, and several corporate subsidiaries.
Purpose   The loan enabled the borrower to pay off loans which had become due. The borrower obtained some time to permit its Atlantic City property for casino gaming.
Exit strategy   The borrower planned to permit the Atlantic City property for casino development and to pay us off out of the proceeds of construction finance.
Outcome   The borrower went into default after ten months. After some negotiation the loan was re-structured. The re-structured loan also went into default. Long and difficult negotiations followed. The New Jersey properties were sold, but realixed much less that their appraised values. We foreclosed on the New York residence, and on re-sale (to the borrower, who got more finance) we recovered principal and most of our interest. We foreclosed on the country estate on the Hudson, out of which we have recovered the balance of what we were owed.




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