Alan Levan is un-distressed
A year after selling BankAtlantic, Fort Lauderdale's Alan Levan has assembled a basket of ‘toxic' assets that he sees as anything but toxic.
For Levan, whose firm put out a news release heralding the outcome, the settlement represented validation on multiple fronts — not the least of which is his belief that, absent the heavy hand of banking regulators, patient lenders can recover on loans classified as non-performing.
"We never could have done that in a banking environment," Levan says of pursuing the payment, which cost him at least $800,000 in legal fees. "We looked under every rock. We sued 15 companies. We went international. (Regulators) don't like when you spend a lot of money on legal fees. They don't like when you spend a lot of money on collections. In a banking environment, they just want the stuff off your books."
Catalfumo didn't respond to interview requests. His attorney, Bradley Shraiberg, of Shraiberg, Ferrara & Landau in Boca Raton, says that in a non-banking environment, borrowers also have rights, including filing for Chapter 11 protection to level the playing field. He says Catalfumo was pleased to be able to pay his creditors.
Meanwhile, Levan says he's "very happy" with BBX's remaining portfolio, which he got at values written down by "hundreds of millions" of dollars by BankAtlantic. He says he has a "magnificent retail site" in Orlando, for example, and a Miami-Dade parcel near I-75 suitable for 800 houses and 200 to 300 apartments. BBX plans to renegotiate the terms of a few loans, while foreclosing on most and developing the properties itself. He's already taken over a business that way — RoboVault, a high-end, robotic self-storage vault in Fort Lauderdale that BankAtlantic loaned money to and that BBX took in bankruptcy court and now operates as a long-term holding.
Other properties will be sold when the market is ripe rather than when regulators say. "In a non-banking environment, you can work the real estate to its highest and best value," he says.
As for the $356 million in non-performing loans it shares with BB&T, Levan says, "We don't think any of it was toxic." Many of the loans were current in payments but were considered distressed because the value of the collateral real estate had fallen below the loan amount.
On those loans, BB&T will get the first 95% of any money realized up to $285 million. Levan's company gets the other 5%, plus all the gain after BB&T is paid off.
As of the end of the second quarter, Levan's company had paid BB&T $130 million of the $285 million owed, a pace that eclipses, after about a year, its benchmark in the BB&T agreement for three years.
"We are so far ahead of the benchmarks. Everyone was referring to these assets as being toxic, as the assets not being worth anything," Levan says. "We knew, based on our real estate experience, we had a gold mine."
Going forward, Levan is likely to find tightening yields in the loan-acquisition market ["Late Innings"]. BBX lost $2.85 million in the second quarter. Its stock, which bottomed at $1.50 in the last two years, reached above $13 per share in August.
Levan, who was paid $5.6 million in salary, bonus and stock in 2012 by BBX, plans in the fourth quarter to have the company absorbed into BFC Financial, Levan's other publicly traded company, which he controls with longtime business associate Abdo. BFC already owns a majority of Boca Raton-based timeshare company Bluegreen; BBX acquired the rest in April so the deal will put Bluegreen, operator of 61 timeshare resorts with 200,000 timeshare owners, under one roof.
The last 15 months also have seen Levan and Abdo bring about the sale, after plenty of contention with other parties, of Doral-based Japanese steak house chain Benihana to private equity firm Angelo, Gordon. BFC gained $9.3 million on its Benihana shares.
Levan gives a mixed answer to whether he misses retail banking. Bankers, he says, help people buy homes, get ahead and grow businesses.
But, he adds, "It's kind of like asking somebody how the marriage is going and they say, 'I've been happily married for 20 years. Unfortunately, I've been married for 25 years.' "