How to win at losing.."Bankrupt luxury community sold to same developer"

[dixiegrrrrl]

By PAUL FOY
AP Business Writer

SALT LAKE CITY — In a highly unusual bankruptcy outcome, the developer of a luxury golf community near Park City bought it back for pennies on the dollar Friday because the leading creditor was unable to scrap together a bid and nobody else was interested.

Promontory, valued at $560 million before the recession took hold a year ago, was sold for just $30 million to a developer who walked away from $350 million in loans packaged by Credit Suisse and sold to hedge funds and other investors.

A Credit Suisse spokesman didn't dispute the loss but wouldn't comment. Dallas-based Highland Capital Management, a hedge fund that owns about 40 percent of the loans, didn't return calls from The Associated Press.

Francis Najafi (Na-JAF-ee), chief executive of Phoenix-based Pivotal Group, emerged triumphantly from a courtroom Friday as the same owner of Promontory, where more than 350 multimillion-dollar homes have already been built. Members pay hefty fees for golf and other amenities, including opulent lodges and a warehouse-sized horse stable. Najafi kept operations going during a yearlong bankruptcy.
****************************************************************************************************
This is a story dated April 17, from The Palm Beach Post
http://www.palmbeachpost.com/localnews/content/shared-gen/ap/Finance_General/Promontory_Club.html?cxntlid=inform_artr

[phantom power]

1. I guess that's one way to refinance.

[newscott]

2. This used to be common practice in MA

There was a guy on Cape Cod who would bankrupt his business and buy his property back at pennies on the dollar and then sell it for a profit. I'm pretty sure they put a stop to it. You can now no longer attend and bid at your own bankruptcy auction in MA.