Wednesday, June 24, 2009


CMBS: Behind a Bankruptcy Brouhaha

Extended Stay Hits Snags as Creditors Cry Foul; Lichtenstein as 'Bad Boy'?

David Lichtenstein is facing challenges to the plan that took his Extended Stay Hotels chain into bankruptcy protection. At stake for the real-estate investor: Whether the filing could trigger $100 million of personal liability that he has tried to avoid.

The controversy over the bankruptcy filing and Mr. Lichtenstein's potential liability has thrown the commercial-property world into an uproar, because the filing also is laying bare many of the technical features of commercial mortgage-backed securities, or CMBS, that have never before been tested on a large scale. As the Extended Stay case is showing, the protections for investors may be less solid than expected, according to CMBS lawyers and bankers...

WSJ: CMBS: Behind a Bankruptcy Brouhaha

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