Lender for major downtown Phoenix projects files for bankruptcy

[Source: Andrew Johnson, Arizona Republic, June 23, 2008]Mortgages Ltd. filed for Chapter 11 bankruptcy Monday night, under pressure from a borrower that earlier had filed a petition seeking to liquidate the lender’s assets.  John Clemency, an attorney for Mortgages Ltd., said that the move seeking a reorganization of its debts could help bring stability to the embattled company, which has an estimated $925 million in loans outstanding and has faced questions since the June 2 death of its chairman and CEO, Scott M. Coles.

Mortgages Ltd. also is lining up outside financing from real-estate lender Southwest Value Partners to continue at least servicing existing borrowers, Clemency said.  The move by the Phoenix-based commercial real-estate lender comes three days after Scottsdale-based developer Grace Communities, one of its borrowers, filed a petition to force Mortgages Ltd. into Chapter 7 bankruptcy.  [Note: To read the full article, click here.]

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