DOW JONES NEWSWIRES
Capmark Financial Group Inc. entered an agreement that would
allow it to unload its North American servicing and
mortgage-banking operations to a new company owned by Berkshire
Hathaway Inc. (BRKA, BRKB) and Leucadia National Corp. (LUK) for up
to $490 million.
The financial services provider came under pressure from banks
in March when it missed a bridge-loan payment, triggering payments
on default-swaps contracts. Earlier Wednesday, the embattled
company reported a $1.61 billion quarterly loss as losses on loans,
investments and real estate continued to pile up. Capmark is
working to restructure its debt and looking at options for all of
its businesses.
Capmark paid $40 million for the put option, which would call
for the buyers to pay $375 million in cash at the closing if the
sale occurs outside of bankruptcy proceedings. Under the pact, the
price would also include a $40 million holdback retained by the
buyers to cover indemnity claims and a $75 million note that is
subject to adjustments in losses in Capmark's Fannie Mae (FNM)
portfolio.
If the sale happens within bankruptcy proceeds, the price will
comprise $415 million in cash and the $75 million note, subject to
court authorization.
-By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com
