Sonny Astani talks to the Los Angeles Times about his decision to put Concerto in Chapter 11, telling Roger Vincent that Corus has liens on those 77 units that just sold at an auction last month, and with the Corus loans being sold, units won't be able to close escrow. With the FDIC apparently not willing to turn over ownership over the loan, Astani is hoping a judge will step in. Via the paper: "Astani hopes his Chapter 11 bankruptcy will force quick action from a local federal judge. "This will also allow us to close the 77 units, pay our contractors and complete the construction of the tower, amenities, and the retail space," Astani said." But it also simply allows him to stay in the game, and Astani appears in a large piece on the forthcoming Corus sale in today's Wall Street Journal, and indirectly gives some more insight into what he's thinking with the Concerto 11 filing. The story also has to make you wonder what's going to happen to the Koreatown Solair project, which was also funded by Corus (but unlike Concerto, has finished construction). After the jump, an excerpt (and you can bet that Astani is one of those unnamed sources aka "people familiar with the process.")
Via the WSJ:
"The winning bidder for Corus's loans is likely to try to foreclose on properties that are in default or cut deals with their developers. One potential strategy for squeezing profits from the loans is to buy them at 40 cents on the dollar, and then try to sell them back to developers for 80 cents on the dollar. Some Corus borrowers have approached the FDIC for a chance to bid on their loans, according to people familiar with the process. The agency rebuffed those efforts, saying it is willing to sell only the whole portfolio.
That stance has sparked criticism by some borrowers who are worried the winning bidder could be a competing developer seeking to take over their projects. The winning bidder "may play hardball and put us in default," said Sonny Astani, who has a $190 million loan with Corus for a high-rise condominium development called Concerto in Los Angeles."
Meanwhile, the Wall Street Journal references the forthcoming Corus asset sale, stating that 10 investors are expected to submit bids in an auction for the $5 billion portfolio, called the "largest bulk sale of commercial-property assets since the financial crisis erupted."