Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and other creditors of Gramercy Capital (NYSE:GKK) have asked Houlihan Lokey to advise them on the strategic options available in a proposed restructuring of approximately $800 million in debt.
Citigroup and Goldman Sachs Group hold a portion of the mortgage and mezzanine loans of Gramercy Capital, along with other creditors.
Some of the possibilities for Gramercy are to sale off some of its assets, a pre-packaged bankrupcy or refinancing their debt, according to people close to the matter.
Goldman Sachs and Citicorp are sure to work with Gramercy because a lot of the business of the company is mingled with theirs, giving them incentive to make it work. Some thing that may favor a pre-packaged bankruptcy over other options.
Normally how a mezzanine loan works is the lender has the rights to convert their interest in the company from debt to equity if the loan isn’t paid back fully and on time.
If the advice and decision is to go with a pre-packaged bankruptcy, that means major stakeholders in a company can negotiate terms for themselves before the Chapter 11 is filed.
Houlihan Lokey has a strong history of helping major companies navigate through the bankruptcy process.
