– December 21, 2010 –
The Cogsville Group Participates as an Equity Partner
The Federal Deposit Insurance Corporation (FDIC) has closed on a sale of a 40 percent equity interest in a newly-formed limited liability company (LLC) created to hold assets with an unpaid principal balance of approximately $204 million from twelve failed bank receiverships. The winning bidder of the FDIC Multibank CRE Venture Loan and REO Structured Transaction 2010-2, Northern Pool is ColFin Milestone North Funding, LLC, Los Angeles (Colony) with a purchase price of approximately 27.00 percent of the unpaid principal balance. The Cogsville Group, LLC, New York, N.Y., (Cogsville) is minority-owned and partnered with Colony to establish the overall winning bidding structure for this transaction.
As an equity participant, the FDIC will retain a 60 percent equity interest in the LLC and share in the returns on the assets. The FDIC offered 1:1 leverage financing to the LLC, which will issue to the FDIC Purchase Money Notes in the original principal amount of approximately $28.5 million. The sale was conducted on a competitive basis with the FDIC receiving bids for either a 40 percent ownership interest or a 20 percent ownership interest in the LLC.
The FDIC as receiver for the failed banks will convey to the LLC a portfolio of approximately 557 distressed commercial real estate loans, of which more than 50 percent are non-performing. Collectively, the loans have an unpaid principal balance of approximately $204 million. Eighty-two percent of the collateral in the portfolio is located in Michigan. As the LLC’s manager, Colony will manage, service, and ultimately dispose of the LLC’s assets.
The bid received from Colony has been determined to be the offer that resulted in the greatest net return to the participating receiverships. All of the loans were from banks that failed during the past 20 months.