What happened was Morgan Stanley bought CNL Hotels in 2007 for about $6.7 billion. The deal included several luxury resorts in Maui, La Quinta, California, and Phoenix.
In other words, Morgan Stanley bought luxury hotels at the peak of the crisis in some of the places hit hardest by the real estate bust.
Morgan Stanley had to refinance the debt they owed on the property, which benefits the lenders, ie John Paulson.
Here are the details, from Bloomberg:
The lenders are [Paulson and] Winthrop Realty Trust, Capital Trust Inc. and Morgan Stanley’s special property group, according to the people. The restructuring, completed Jan. 6, gave the group control of eight luxury resorts, one of the people said. Morgan Stanley’s real estate funds have the right to participate in future capital raising.
So average Americans aren’t the only ones seeing their properties seized by lenders.
Business Insider Emails & Alerts
Site highlights each day to your inbox.