Credit Evaluation School Instructor eBook - Oct 2023

People:

Babe Ruth Development Co. Land development company

Purpose: Payment:

Purchase and resell land for investment purposes

Note is due at maturity from the sale of the commercial land Currently, 65 days past due

Protection:

Bank funded 100% purchase price one year ago at $1,000M Current balance: $1,000M City Council to vote on whether land is to be annexed into city limits in 6 months If council approves annexation AV: $2,500M If city council denies annexation AV: $500M Awaiting decision from city council Borrower intends to sell the commercial land immediately after council’s decision Borrower has no other means to repay debt except from sale of the land

Problem:

Prospects: