EAST BRUNSWICK, NJ-Bankrupt homebuilder Kara Homes has gotten $2.7 million in loans from Credit Suisse to complete construction of two of its residential projects. The two projects had been held up by the locally based Kara's bankruptcy proceedings--the company went Chapter 11 in October, listing liabilities of $227 million and assets of $350 million, and subsequently laid off most of its staff.
Bankruptcy Court Judge Michael Kaplan this week approved the funding, which amounts to two separate loans. For one, Credit Suisse Loan Funding LLC is providing $2.1 million, carrying an interest rate of about 13%, which will be used to complete construction of Kara's Buckley Estates project in Marlboro. Credit Suisse had earlier purchased $4 million in debt on the project from Yardville National Bank.
The second loan, totaling $600,000 at a 13% interest rate, will be used to finish the Water's Edge project in Little Egg Harbor. Credit Suisse had originally provided $1.4 million in funding for Water's Edge.
Since filing for Chapter 11 protection in October, Kara has sold several developments, and has halted construction on several others pending additional financing. The company recently filed a reorganization plan with the court, with a decision on that plan pending.
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