Amboy Bank Says Everyone Remain Calm
I would find another bank to leave my money with. It sounds like Amboy Bank's officers are not too bright. "Amboy National Bank, beset by nearly $108 million in potentially bad loans this year from two major real estate borrowers, has a message for its customers:
Everything will be all right.
Amboy officers said last week that their bank — listed as one of the most profitable in the country — will be able to cover any losses on loans made to embattled real estate mogul Solomon Dwek and Kara Homes, a major developer that has filed for bankruptcy.
Old Bridge-based Amboy, which has nine branches in Monmouth County, said it could maintain its fiscal strength by using reserves set aside for bad loans, profits from the privately held bank and, if necessary, the bank's own cash and other holdings."
Full article...
posted by Little_Silvered at 4:07 PM
6 Comments:
I am looking to buy a house within the next few months. I've been receiving emails from RealtyTrac with "bank owned properties". It also has foreclosures and resale properties.
Does anyone know if this is a good way to find a home? There is a fee to sign up to get the complete information on the listings.
This seems like the only way I may be able to afford a home in the town where my children go to school.
Thank you. JT
The following article provides an update for those interested in the Kara Homes fiasco.
http://www.app.com/apps/pbcs.dll/article?AID=/20061030/NEWS/61030020/1001/ENT
Kara gets OK to sell nine homes, but financing falls through
Posted by the Asbury Park Press on 10/30/06
BY DAVID P. WILLIS AND MICHAEL L. DIAMOND
TRENTON — A bankruptcy court judge today gave permission to Kara Homes to move forward with the sale and closing of nine homes.
Kara had hoped to get permission to restart construction of up to 300 homes, but a lawyer for the troubled home builder said the short-term financing to get the company started again had fallen through.
East Brunswick-based Kara, one of the largest home builders in central New Jersey, filed for protection from creditors under Chapter 11 of the bankruptcy law Oct. 5. It owes creditors -- including banks, suppliers and employees -- hundreds of millions of dollars. Customers who have contracts for uncompleted homes are also listed as creditors.
In an earlier court filing, Kara said it had lined up $5 million in financing to start
rebuilding and to start meeting its payroll for about 70 employees still working for the company. Kara said it also wanted to reimburse customers who had canceled their new home contracts before the builder filed for Chapter 11.
At a bankruptcy hearing today, Kara's lawyer, David L. Bruck, said negotiations with Medical Capital Group, the entity that was to supply the financing, had fallen through on Friday.
However, Bruck said negotiations are continuing, and Kara officials are hopeful that a new deal would be in place this week.
U.S. Bankruptcy Court Judge Michael B. Kaplan gave Kara permission to move forward with the sale and closing of nine homes that are completed.
"I am concerned with nine families looking to close and who have probably sold homes and are on the hook,'' Kaplan said.
A lawyer for the committee of unsecured creditors said he supported the sale of the homes.
"I hope this becomes the platform -- reduce real estate and homes to cash -- and we can debate who gets it later,'' said lawyer Michael D. Sirota of Hackensack..
More than two dozen lawyers representing banks, subcontractors and insurance companies, packed Kaplan's court room for the hearing. Among the other topics they discussed was the appointment of a chief reconstruction officer who would run the daily operations of the company.
For more coverage of Kara Homes, read the Asbury Park Press Tuesday.
As I'll discuss, the salient points of this article are contained at the end (I've quoted it below). What you are seeing is a common sense approach by the attorney for the unsecured creditors committee. He is smart enough to know that if unsecured creditors are to get anything, time is an adverse factor and you need to sell, sell, and sell before secured creditor claims exceed the value of the collateral (something they likely do with regard to many of the estate assets). Always smart to fight over money than depreciating assets (and with the real estate bubble, KARA's real property holdings clearly fit within the definition of "depreciating").
The idea of a CRO (chief reconstruction officer) is one that I expect Zudi to oppose. As to whether or not he is successful is largely dependent upon whether the "white knight" lender rides off into the sunset. My guess is financing is a dead issue because there were simply no unencumbered assets with which to secure repayment of the new loan. Obviously, given the condition of this debtor with no real assets other than some sort of an ownership interest in affiliates, it certainly wouldn't make sense in the exercise of prudent lending practices to base repayment chances simply on a loan's status as a chapter 11 administrative claim. Clearly once the case is converted, well Chapter 7 administrative claims and secured claims are going to likely gobble up all the assets. Remember all those lenders have promissory notes that contain attorney fee provisions and you can be sure the costs associated with those "more than two dozen lawyers" are going to have to be figured into any sort of solution.
I'm guessing we are only a couple weeks away from a complete meltdown, with construction lenders, mechanics lien claimants, and others piling on with motions for relief from the automatic stay so they can complete their foreclosures. Interesting times, that's for certain.
Take care,
SCProfessor
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A lawyer for the committee of unsecured creditors said he supported the sale of the homes.
"I hope this becomes the platform -- reduce real estate and homes to cash -- and we can debate who gets it later,'' said lawyer Michael D. Sirota of Hackensack..
More than two dozen lawyers representing banks, subcontractors and insurance companies, packed Kaplan's court room for the hearing. Among the other topics they discussed was the appointment of a chief reconstruction officer who would run the daily operations of the company.
Rumor has it that Z-Man refuses to willingly accept any solution that does not include him & his chosen people on top. He will not concede defeat quietly. His actions of late have been described as the actions of a desperate and panicked man. Is he, as his attorney suggested, eager and willing to do absolutely anything to restore his good name at any cost? Or does he have a lot of "loose ends" that need to be tied off before control is wrested from his hands? Knowing how he operates, it's probably both and a whole lot more.
Once you declare Chapter 11, courts are effectively in charge. Doesn't matter what Z thinks or says.
If he doesn't like it, he shouldn't have blown up.
Mr. Rant
I think zudi's "loose ends" are more accurately defined as "hiding assets", "shredding documents" and "covering his ass"
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