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Adding Value by Establishing a Zero Valuation

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Situation
Financial institution engaged Affinity to determine fairness of settlement offer from a non-recourse borrower of a poorly performing southeastern daily fee golf course.

Key Initiatives

  • Affinity visited property, interviewed borrower and visited market competitors.
  • Affinity learned property flooded frequently, was on the decaying part of town and was soon to suffer additional population losses from a military base realignment.
  • Interview with borrower yielded intrinsic reasons for unnecessary settlement offer, which erased concerns about hidden value.
  • Affinity delivered financial models and summary indicating that the property had no value and no likely alternative use.
Results
Lender accepted settlement offer of several hundred thousand dollars and avoided foreclosure that would have likely been fruitless. Course closed shortly thereafter and remains dormant.



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