Capmark Bankruptcy Oct. 26 (Formerly known as GMAC)

Here is another bankruptcy in the commercial real estate sector, as the commercial real estate market collapses.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3Z4h4E8kNp8#

Capmark, with assets of $21 billion, used to be known as GMAC. (Companies love to change their names when the old name becomes tarnished. That way they get to get a brand new image without having to change their old business habits.)

According to the Bloomberg article above. . .

Capmark Financial Group Inc., the lender owned by companies including Goldman Sachs Group Inc. and KKR & Co., filed for bankruptcy protection after posting a second-quarter loss of about $1.6 billion.

Goldman Sachs is taking a hit on this bankruptcy.

Capmark and its units owe $7.1 billion to the 30 largest creditors without collateral backing their claims, according to court documents.

The three biggest are Citibank NA, as administrative agent under the $5.5 billion credit agreement, with a claim of $4.6 billion; Deutsche Bank Trust Co. Americas, as trustee for the 5.875 percent senior notes and the floating senior notes due 2010, with claims of $1.2 billion and $637.5 million, respectively; and Wilmington Trust FSB, as successor trustee for the 6.3 percent senior notes due 2017, with a claim of $500 million, according to court papers.

Citibank is taking a hit on this bankruptcy, because they are a major creditor that won't get paid back on its loan of $4.6 billion.

Andrea Raphael, a spokeswoman for Goldman Sachs, declined to comment on the status of her firm’s investment in Capmark.

KKR already wrote off its loans back in March, the article says, when they recognized that their loan was already worthless. That tells me that KKR already knew Capmark was going bankrupt last March. It often takes many months for official bankruptcy filings to take place. They call it a "train wreck in slow motion."

Losses from commercial real-estate lending pose the biggest threat to U.S. banks as the loans deteriorate, leaders of Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and Office of Thrift Supervision told the Senate Banking Committee earlier this month.

Many economists wrote a year ago or more that the next collapse would be in commercial real estate. It looks like this is finally starting to hit the surface.