New York Post - Nov 15, 2008
By KAJA WHITEHOUSE
Leon Black's buyout firm Apollo Management can't seem to get a break.
Yesterday, Black's string of misses got longer when it emerged that another of Black's investments is struggling to pay its debt.
Realogy, which owns real estate companies Century 21 and Coldwell Banker, and which reported $209 million of losses in the last three quarters, is at risk of violating the terms of its bank loans, according to regulatory filings.
The Parsippany, NJ, real-estate broker is hoping to exchange about $1.1 billion of bonds at a discount for some new debt in hopes of reducing its debt by almost $600 million, thus staving off default.
It was the latest in a series of blows that private-equity mogul Black has sustained over the past few months as he watches his investments either crumble or collapse.
First, retailer Linens 'n Things went bankrupt. Then Hexion, one of his companies, got stuck in a legal battle after trying to walk away from a souring buyout deal involving a rival firm.
The string of troubles marks a dramatic turn for the buyout mogul, who started off as an investment banker for Drexel Burnham Lambert in the 1980s and who made his name and fortune buying beaten-down companies and reviving them. Black started Apollo, which manages about $16 billion, in 1990.
When Linens 'n Things filed for bankruptcy in May, it was the largest bankruptcy in the struggling retail sector at the time.
Black had only just acquired the retailer two years before in what he viewed as a turnaround project. But things only worsened as consumer spending slowed.
Also tarnishing Black's once golden reputation has been the legal snafu surrounding Hexion - an Apollo-owned chemicals company based in Ohio.
A year after striking a deal to buy Huntsman, Apollo asked the Delaware Court of Chancery to kill the transaction, worried that the combined company would be insolvent.
There was also fear that the financing banks might back away from providing $15.35 billion to complete the deal.
The courts have refused to let Apollo walk away from the deal.
Investors also have raised questions about Apollo's Harrah's Entertainment investment following a $1.3 billion writedown, and Claire's Stores, which was hit by debt downgrades over the summer amid weak earnings.
COMMENT:
The Greenwich Coldwell Banker Office Sure Looks Foolish And Unethical Going To The Greenwich Post And Demanding Chris Fountains Head.
HERE IS THE LATEST FROM FOR WHAT IT"S WORTH:
This house sold for $3.075 million in April 2004, renovated in 2005 and came back on the market today for $2.850. That’s a pretty good buy on a very nice, ...
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