Bank of America and American Asset Corp. have settled their dispute over 10 loans, ending the litigation between the bank and various borrowers; AAC controls and manages those properties.
As a result, B of A will issue new, five-year nonrecourse single asset loans for the 10 properties.
The dispute started in 2008 involving $130 million in short-term construction loans and their maturity. Those loans will be restructured into the new loans.
Since the 10 properties were placed in bankruptcy, the agreement needed approval by the U.S. bankruptcy court. With that approval, AAC ended the bankruptcy proceedings and litigation against B of A.
AAC said the loans have been performing. “The consensual extension settlement with the bank at par proves the values of the underlying assets,” said Count Arco, CEO of AAC.