What strategy should the head of commercial real estate and chief credit officer of a bank employ when confronted with the default of a large construction loan?
What strategy should the head of commercial real estate and chief credit officer of a bank employ when confronted with the default of a large construction loan?
Patricia Goldstein, head of commercial real estate and chief credit officer of Emigrant Bank, has been asked to review the status of the bank's share of a $115.2 million construction facility which has recently gone into default. This case presents students with background information on this loan— including the capital stack, commitments and outstandings, the transaction summary/term sheet, and the operating financials of the company holding the loan—and asks them to consider what strategy would best help Goldstein to meet her objectives for the loan.