Chapter 7 for Anthracite Capital, Another Casualty of Real Estate Market
Anthracite Capital is latest victim of the still-struggling real estate market. After posting what Forbes called “a mammoth fourth-quarter loss,” the commercial real estate giant decided this week to file Chapter 7 bankruptcy.
In its Chapter 7 filing the company revealed they have almost $1 billion in debt. Gobest.com reports that the company’s cash reserves went from $9.7 billion at the start of 2009 to less than $300 million by September.
Earlier this month Anthracite, which takes its name from a type of coal, default on almost $80 million in senior notes and was delisted by the New York Stock Exchange.
Forbes said the company, which specializes in commercial real estate junk bonds and loans, has struggled to obtain the outside financing it needs since the subprime mortgage crisis froze much of the outside funding. Also, as the commercial market dried up and prices and demand dropped, there was significantly less interest in the securities offered by Anthracite, reported Forbes.
The drop in demand has been sharp, as the company lost hundreds of billions of dollars in 2008 and again in 2009.
The Chapter 7 bankruptcy filing is another blow, according to experts, for BlackRock, a high-profile global financial firm and the parent company of Anthracite.