The financial partner in The Market Common project in Myrtle Beach has defaulted on its loan agreements with a national bank and might consider filing for bankruptcy protection, according to a notice issued Tuesday.Thus begins an article on the Market Common fiasco--which you can read in full at Myrtle Beach Online. The trouble, however, doesn't stop there.
Leucadia National Corp., a financing partner with developer McCaffery Interests Inc., is contesting the defaults but said it is "exploring all options and remedies available to it including, but not limited to, a bankruptcy filing."
...[M]ore than one-third of The Market Common's tenants have asked the project's developers to lower their monthly rent payments, according to Tuesday's notice.The stakes are actually pretty big on this one--i.e., foreclosure on the property by the bank is a possibility, however slim:
Jewelry store Carlyle & Co. plans to close in August and at least two other stores - Victoria's Secret and Bath and Body Works - have said they may close.
The financial default involves $7.6 million worth of payments Leucadia owes as part of an interest rate swap agreement tied to a construction loan.As the primary construction loan to Leucadia is scheduled to mature on October 10th, there's an end date to this financial posturing by both sides. But the problems at The Market Common seem likely to continue for a good while after.
Failure to pay that amount triggers another default on the primary $92.7 million construction loan and would let JP Morgan Chase foreclose on the property.
Leucadia, in the notice, said it has not paid the $7.6 million "and has no intention of paying such amount to Chase."
In addition to a possible bankruptcy filing, Leucadia said it is trying to negotiate new loan terms with the bank.