First Magnus $5.25 million construction loan sale approved

By Caroline Salls

Pittsburgh, Jan. 14 - First Magnus Financial Corp. obtained court approval to sell some of its construction loans to Hughes Development for $5.25 million, according to a Friday filing with the U.S. Bankruptcy Court for the District of Arizona.

As previously reported, Summit Investment Group, LLC was the stalking horse bidder with a $4.6 million bid.

Under the stalking horse agreement, First Magnus agreed to pay $200,000 of Summit's sale-related expenses if it was not the high bidder and to pay a 3% broker's commission to broker Bourn Partners, LLC if the purchase price was more than $4.85 million.

However, the court denied approval of both the expense reimbursement and broker's commission.

First Magnus, a Tucson, Ariz., mortgage loan originator, filed for bankruptcy on Aug. 21. Its Chapter 11 case number is 07-10578.

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