Development Dilemma

Lewiston, ME

THE PROBLEM:

An ongoing residential development project was in danger of stalling due to the unexpected passing of a development company’s leader, posed the threat of escalating carrying costs. Lenders, creditors, and borrowers devised a prepackaged Chapter 11 bankruptcy plan to facilitate the expedited sale of valuable assets, ensure completion of homes already under construction, and implement a comprehensive global asset restructuring. As part of this effort, Tranzon was engaged to market three residential subdivisions in various stages of completion.

THE STRATEGY:

Due diligence was key to this project. The Tranzon team first needed to perform extensive analysis of permits, approvals, and construction specifics. During this process, it was uncovered that approvals for a particular subdivision were at risk of expiration without extension eligibility. Our team worked collaboratively with borrowers and creditors' counsel to persuade the town to review and reinstate the permits so the properties could remain a marketable development.

THE RESULTS:

Efforts to review the necessary approvals were successful, and the town reinstated the project’s permits for an additional 12 months. The marketing campaign for the sale of the subdivisions resulted in 61 inquiries and 8 competing bidders. The final bid of $1.575 million surpassed the bank's reserve, repaying creditors and alleviating their ongoing carrying costs.