S’pore govt offers to buy Paulson resorts

February 15, 2011
Singapore Democrats

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David McLaughlin
Bloomberg

Government of Singapore Investment Corp., a sovereign-wealth fund, offered to buy a group of bankrupt resorts owned by hedge fund Paulson & Co. and other investors.

The fund has offered $1.5 billion for the five resorts, one of its lawyers, Michael Sage, said in an interview after unveiling the offer at a bankruptcy court hearing today in New York.

The resorts, including the Grand Wailea Resort Hotel & Spa in Maui, Hawaii, and the Doral Golf Resort & Spa in Miami, filed for bankruptcy Feb. 1 after Paulson and other investors took ownership of them through a foreclosure, according to a court filing.

Edward Sassower, a lawyer for the resorts, declined to comment after the hearing about the offer from the Singapore fund. The fund, a creditor in the bankruptcy case that owns junior debt, manages Singapore’s foreign reserves.

A person familiar with the business said Paulson believes the assets are worth more than Singapore’s offer. Paulson has also received other expressions of interest in the properties, including offers, said the person, who didn’t want to be identified because the deliberations are private.

The Singapore fund and Paulson have each offered bankruptcy loans for the company, which will seek approval for the financing by the end of the month, the person said.

Cash collateral

At today’s court hearing, U.S. Bankruptcy Judge Sean Lane approved an order allowing the properties to use the cash collateral of lenders until Feb. 28. Without access to the cash, the resorts won’t be able to operate and the “entire restructuring may be jeopardized,” lawyers said in court papers.

Sassower told Lane that negotiations continue with lenders for a “comprehensive” cash collateral agreement.

“The parties have made a lot of progress but still need more time,” Sassower said.

The case is In re. MSR Resort Golf Course LLC, 11-10372, U.S. Bankruptcy Court, Southern District of New York Manhattan).

http://www.bloomberg.com/news/2011-02-14/singapore-offers-to-acquire-five-bankrupt-paulson-resorts-for-1-5-billion.html