Breevast is seeking a court injunction to prevent US hedge fund Davidson Kempner from auctioning off the Amsterdam-based property company’s Dutch assets which are tied up in a CMBS structure.
The Mesdag Delta CMBS loan was acquired by New York-based investment firm Davidson Kempner Capital Management in February this year. The underlying 55 real estate assets are reportedly valued at some €560 mln.
Neither Breevast nor Davidson Kempner have stated a monetary value for portfolio, though Breevast said the combined assets are worth more than the CMBS loan.
Court action
In a statement issued on Wednesday, Breevast said that the loan is linked to the so-called Mesdag Delta portfolio and was acquired ‘very recently (namely 2 February 2018) by Davidson Kempner'.
The Dutch company said that the real estate portfolio is owned by ‘various group companies of Breevast' and the financing is a non-recourse loan ‘for which Breevast is not the guarantor’.
In the statement, the company claimed that David Kempner had announced on buying the loan that it would auction the properties. Breevast continued: ‘The real estate portfolio has an excess value compared to the loan. Breevast opposes the intention of Davidson Kempner to appropriate the surplus value. Breevast opposes the (manner of) execution.’
Breevast filed summary proceedings with a court on 27 March and it is expected the judge will deliver a ruling on 10 April. The auction is scheduled for 15 May.
Portfolio
The portfolio is to be sold by BOG Auctions in three lots. Bidders can also make an offer for the entire portfolio. BOG Auctions, based in the Dutch city of Amersfoort, specialises in organising online and offline auctions of real estate on behalf of banks, mortgage holders, notaries and other groups.
Breevast ran into difficulty in recent years because of loan defaults caused by a sharp drop in the value of the underlying assets. The company denied Dutch media reports last year that it was on the verge of a sale. However, in February, Breevast confirmed that the Mesdag Delta CMBS loan had been taken over by Davidson Kempner.
The 55 assets for sale cover nearly 460,000 m2 of total space and consist of 18 office buildings, 16 industrial properties, nine shopping centres, six high street stores, a hotel, two residential properties and a plot of land. The NH Hotel in Utrecht (pictured) is among several assets set to be auctioned off online.
Owner arrested
Breevast hit the headlines last year after its owner Frank Zweegers was arrested in Italy on allegations of fraud.
He was released without charge after being investigated for allegedly bribing a former Belgian police chief in 2013 to lobby for the national police headquarters to move to another building in Brussels, owned at the time by Breevast. The police section of that building, the RAC complex, has since been sold to Hannover Leasing and China’s Gingko Tree.
Dutch and Belgian media reports alleged Zweegers paid police chief Glenn Audenaert tens of thousands of euros in bribes at the time.
Zweegers is said to be one of the richest people in the Netherlands with an estimated fortune of €245 mln, according to local business magazine Quote.
At the time of his brief arrest, Breevast was reportedly in talks to sell the Finance Tower in Brussels, which forms part of the RAC complex, to Derek Quinlan for €1.3 bn. The Dutch company acquired the 31-storey, 200,000 m2 building in 2001 for €310 mln and subsequently spent €300 mln on its renovation.
