Struggling Developer Turns Tables On Uncooperative Lenders; Uses "Asset Assignment" To Force Mortgage Holders To Negotiating Table

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• Unable to get bankers to renegotiate nearly $22 million in debt, Southwest Florida home builder Lee Wetherington has filed a legal action akin to a bankruptcy proceeding. Wetherington said that the filing, known as an "assignment for the benefit of creditors," affects only the development side of his business, and that he is using it as tactic to bring bankers to the negotiating table.(1)

• "This forces them to come back and look at the properties and also gives us more time to negotiate better terms," Wetherington said.

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• "When banks are taking a position to force your hand, you have to take a stand and make them negotiate," Wetherington said. "It's crazy, but the only way to get them to talk is to stop making interest payments and to file an assignment for the benefit of creditors."

For more, see Loan renewals pose threat; one builder acts to force negotiation.

(1) Reportedly, Wetherington's bankers want him to fork over millions of dollars in return for renewing loans on land that has lost value in the real estate meltdown.