Case Study: Property Management Firm Audit
3 Garden-style apartment complexes totaling 500+ units, Southern United States
Laurence Weizel was brought in by Canadian owners to assess the viability of the portfolio. The original deal was quite complex, and only a few of the owners actually understood how it worked. The Canadian owners were concerned that they were receiving very little information as to how the properties were performing and had no input as to how the properties were being run. The properties were heavily financed and onerous interest payments on the bonds were coming due. A lucrative management contract for the properties was in place that was virtually impossible for the owners to terminate.
- A Canadian real estate agent was engaged to inspect the properties.
- That inspection uncovered numerous unusual activities.
- Mr. Weizel helped to convince the Canadian owners that it would be very difficult and very costly to terminate the management contract and that it would be better to divest themselves of these properties.
- Although we had no operational control of the properties, we were able to lead all aspects of the sales process.
- We sent representation to New York, along with legal counsel, to meet with the representatives of the Bondholders to try to extract concessions from them.
- Finally, Laurence Weizel went to the United States to personally oversee the consummation of the sale.
- $2,000,000 in interest arrears concessions were obtained from the Bondholders.
- All three properties sold to a single purchaser for more than $51,000 per suite.
- After a three and a half year struggle, we were able to repatriated the net proceeds, along with the books and records, to Canada.