Crown Delaware Holding Company

Transaction Overview
Transaction type: Private placement
Total Transaction Size: $119.5 Million

Transaction Background
CBA was retained by Frank J. Pasquerilla to re-engineer the assets and liabilities of his private real estate company, Crown Delaware Holding Company (Crown). Crown's assets included 22 hotels located in six states operating under five franchises, a hotel operating and management company, a retail shopping center, several parcels of development land and 11,000,000 shares of restricted Crown American Realty Trust common stock (NYSE-listed REIT, ticker symbol: CWN). Crown's liabilities included 50 first, second and third fixed and floating rate mortgages with various maturities held by numerous commercial banks, life insurance companies and investment banks.

Transaction Summary
CBA separated the $119.5 million restructuring into three loans. The first loan totaled $75 million and consisted of 22 cross collateralized and cross defaulted first mortgages secured by the 21 hotels and one retail property. The second loan was a $15 million mezzanine loan secured by the equity in the 21 hotels and one retail property. The final part of the restructuring was a $29.5 million credit facility secured by 8.5 million shares of the restricted Crown American Realty Trust common stock. CBA funded each of these loans, totaling $119.5 million, and the mezzanine loan and secured credit facility were subsequently sold in a private transaction. This re-engineering provided a long term solution to Crown's capital needs and allowed them to focus on growing their business.