The Wall Street Journal reported in its article "Farkas Scoops Up Centerline Holding" that Andrew Farkas's Island Capital Group ("Farkas") has purchased Centerline Holding Co. ("Centerline"). Farkas recapitalized the company with $100 million in new equity while also assuming $180 million in debt; preventing Centerline from falling into bankruptcy. Centerline is one of the largest commercial-mortgage servicing specialists.
Farkas purchased the Centerline unit which specializes in restructuring poorly performing mortgages that were previously packaged into bonds. This particular unit is a designated special servicer for about $110 billion of loans that were bundled into commercial-mortgage backed securities or CMBS. A special servicer decides whether to modify loan terms or foreclose on property once a loan goes into default.
Farkas's recapitalization of Centerline eliminated $1.6 billion of debt and split the company into two pieces. Farkas controls the servicing and debt-fund-management businesses, while the other piece remains a publicly traded entity that handles agency lending and affordable housing businesses.
Matthew L. Holden is a New York real estate attorney representing clients throughout New York and New Jersey. Founded by Matthew L. Holden, The Law Offices of Matthew L. Holden, LLC is located in Hackensack, New Jersey.
