Thursday, June 4, 2009

Extended Stay defaults... Biggest Loser - Taxpayer

WSJ reports

U.S. taxpayers also have had an interest in the talks because another lender in the buyout was Bear Stearns Cos., whose stake was taken over by the Federal Reserve after Bear collapsed in March 2008. BlackRock Inc. has been representing the Fed in the restructuring talks, according to people with knowledge of the negotiations.


Most of the holders of junior mezzanine debt bought at a discount, some around 60 cents on the dollar, but others as low as 10-15 cents, say debt holders. Both the senior and mezzanine loans mature June 12, with extension options.

can't pay their phone bills...
... May after Extended Stay failed to pay a $3.5 million late phone bill, according to the people familiar with the matter.


The suit, filed in New York state court, alleges the banks colluded with the borrower and "hatched a Machiavellian scheme to wipe out " the investors who bought the junior slices of the $3.3 billion in mezzanine debt. Lightstone isn't named as a defendant in the suit. Mr. Lichtenstein declined to comment.

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