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RAIT Financial Trust files bankruptcy, gets $174.4 million lead bid
By Caroline Salls
Pittsburgh, Sept. 3 – RAIT Financial Trust filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the District of Delaware.
According to a company news release, RAIT entered into an equity and asset purchase agreement to sell substantially all of its assets to an entity owned by funds managed by affiliates of Fortress Investment Group LLC through a court-supervised sale process.
Under the agreement, the Fortress entity provided a binding bid of $174.4 million and will assume specified liabilities. The bid is subject to higher or better offers in the bidding process.
RAIT said it would seek court approval to continue operations in the ordinary course of business during the sale process.
According to court documents, RAIT has $100 million to $500 million in both assets and debt.
The company’s largest unsecured creditors are Wells Fargo Bank, NA of Wilmington, Del., with a $66.53 million claim related to the company’s 7 1/8% senior unsecured notes, a $56.87 million claim related to its 7 5/8% senior unsecured notes and a claim in an unknown amount related to its junior subordinated notes, and The Bank of New York Mellon of Pittsburgh, with a $25.2 million junior subordinated note guaranty claim.
Drinker Biddle & Reath LLP and Ledgewood, PC are acting as legal counsel, M-III Partners, LP is acting as financial adviser, and UBS Securities, LLC is acting as investment banker to RAIT and its affiliates in connection with the proposed sale and the bankruptcy proceedings.
The real estate investment trust is based in Philadelphia. The Chapter 11 case number is 19-11915.
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