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IStar may seek bankruptcy protection

September 22, 2010 03:45PM

Paramount Bay

As commercial real estate lender iStar Financial tries to restructure some of its $8.6 billion in debt, it may seek bankruptcy protection, after creditors blocked it from amending loans, company insiders told Bloomberg News. The company expects to meet with creditors next month to discuss a potential “pre-packaged bankruptcy,” which could occur sometime next year. New York-based iStar recently saw its shares plunge more than 25 percent, losing more than 90 percent of their value since 2007. The company, led by CEO Jay Sugarman, hired Lazard, and Kirkland & Ellis to advise them on the debt restructuring. IStar made loans on properties including the nearly complete Paramount Bay condominium on N. Bayshore Drive in Miami. Aside from bankruptcy, iStar is considering a proposal to extend maturities on its debt as well as a potential exchange offer, sources said. [Bloomberg via Crain’s]