Prudential Americana Almost Out of Chapter 11

Prudential Americana Group, one of the largest residential real estate firms in Las Vegas, was in Chapter 11 bankruptcy since November 2007. It now has plans to emerge from bankruptcy in July 2008. However, there will be few haircuts and changes.

Mark Stark, the CEO and sole owner, will maintain control but will have to write off a $1.6 million loan that he made to the company. He will also have to provide a $500,000 equity infusion into the business.

Peninsula Capital Partners, a Detroit investment firm, will have to take quite a hit. It was owed $14.5 million and it will receive just $800,000.

Prudential Real Estate Affiliates, the franchisor and a subsidiary of the Prudent Insurance, will inject another $7.1 million in loans and new equity to give it a 40 percent stake in Prudential Americana. Its ownership will shrink over time to 10 percent as the loans are paid down.

Zions First National Bank will continue to be paid on the first mortgage it holds.
At the time of bankruptcy filing the amount was $4.9 million.

The one issue that stalled the June 30th bankruptcy hearing was how much to pay the $70,000 owed to outside brokers and agents who referred transactions to Prudential Americana. Prudential wants to pay the commissions in full and the U.S. Bankruptcy Judge Bruce Markell believes that brokers and agents will have to take a haircut also.

At this point, the agents and brokers would just like to see something.

John Laub is the President of the CEO-CFO Group.

1. "Prudential Americana Set to Try to Emerge from Bankruptcy. Hearing to Deal with Payments to Outside Brokers." Tim O'Reiley. Las Vegas Business Press. July 7, 2008.

1. "Real Estate Company Files for Bankruptcy. Prudential Americana Group's Move Will Not Affect Listings, Owner Says." John Edwards. Las Vegas Review Journal. November 28, 2007.