How does Pathfinder determine its offer price?
Our offer price is based on a number of factors, including the face value of the loans, the financial condition of USACM, the financial condition of Gramercy Court, Ltd., the borrower, our estimate of the term of the bankruptcy, our estimate of the costs of additional construction required to complete the property, the risks associated with a potential “cram down” of the principal balance of the loan through the borrower’s Chapter 11 reorganization, and the potential liabilities associated with the borrower’s claim that it was damaged as a result of USACM’s failure to fully fund the loan. We have also considered the potential claims of other creditors in the bankruptcy – including mechanic’s liens filed by the general contractor and its sub-contractors and the City of Houston for unpaid property taxes and other fees – and our anticipated return requirements. Furthermore, we have considered other risks associated with the transaction, including the expenditure of significant legal costs
