Friday, November 07, 2008

Chapter 11
I heard that DBSI and many of its entities are going to file for Chapter 11 bankruptcy. This, I guess, is an attempt to break its obligations under all its master leases. This is the obvious step and therefore, I do not find it much of a shock. Without looking at any DBSI property, I am guessing that problems arose long before the current credit crisis, although the credit crisis will be blamed.


Anonymous said...

It is unfortunate that the credit crisis will be the cop out for the majority of these RE sponsors who bought stupid deals, and loaded them with fees. They were doomed from the beginning, however are now being "bailed out" as they can blame problem properties on this mess. The real tragedy is that they will develop a believable story around it, and there's a good chance additional investors will be duped at a later date. Hopefully advisors and B/D's will have learned (unfortunately the hard way) by then.

Rational Realist said...

I agree. Investors, advisors and b/ds will be duped again. The products that are easiest to sell are the ones that should not be bought. I just got an email from Morningstar that had a quote from Warren Buffet that sums it up: "Be greedy when others are fearful, and fearful when others are greedy."