The Grubb & Ellis Company, one of the nation’s largest commercial real estate services firms, has filed for bankruptcy protection as part of a deal to sell the majority of its assets to commercial real estate services company Newmark Knight Frank’s parent company, who happens to be their rival. Grubb & Ellis has experienced operating losses for the past several years, and they have been negatively affected by the real estate downturn. As part of Grubb & Ellis’ Chapter 11 bankruptcy process, the proposed sale to BGC Partners Inc. will require approval by the bankruptcy court.
“We are pleased to have found such a strong partner who can provide our company with financial stability and deeply enhanced opportunities.” Thomas D’Arcy, Grubb & Ellis’ president and chief executive.
The company listed more than 5,000 creditors, $150 million in assets and $167 million in their bankruptcy documents. Chief Financial Officer at Grubb & Ellis Michael Rispoli, outlined the circumstances that led the company to file for bankruptcy protection. The meltdown of the financial markets in 2008, and the slow recovery of the real estate market and its 2007 merger with NNN Realty Advisors Inc., were listed as the main reasons that the company was struggling financially.
“The combined effect of these adverse economic conditions and liabilities and losses associated with disposed businesses severely strained Grubb & Ellis’ liquidity and hampered its ability to continue as a going concern,” Rispoli said.
The company is asking the bankruptcy court to approve an expedited hearing, and sale process. BGC, has agreed to provide up to $4.8 million in financing to keep Grubb & Ellis operating while they go through the bankruptcy process.
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