Credit Evaluation School Instructor eBook - Oct 2023

Internal Use Only

Never Blue Casino, Inc. – Loss Person: Casino (never mind that it’s a 200M casino). Owned and operated by Teague Baxter. Parents are NOT cosigners or guarantors of debt, but banker tries to make the case that the parents would back their son and payoff debt if necessary. Purpose: Takeout construction loan on casino, 200M. Projections did not show adequate cash flow to service debt. Payment: Requires monthly payments of 2,643. 10 year amortization, 3 year note, 10%. Protection: First REM on the commercial building and lot. Performance: Casino burned down and arson eventually determined to be the cause. Teague was arrested and admitted setting fire to cover up financial problems. Banker is talking to parents about paying off loan, but as can be expected, they are not willing to pay. Loan is on nonaccrual, but is 209 days past due. Although the lot would have some value, the cleanup costs would offset the lot value.