[Alpha Biz= Paul Lee] Daol Asset Management announced on Sunday that it has reached an agreement in the forced condemnation case regarding the Washington DC Union Station lease rights, where it will receive a total of $505 million (approximately 7.3 trillion KRW) from Amtrak, the U.S. railroad company.
In 2018, Daol, in partnership with U.S. management firm Lexmark, invested in a subordinated loan bond worth $100 million secured by the Union Station lease rights.
However, due to the suspension of station operations caused by the COVID-19 pandemic, the loan bond defaulted. In 2021, Wells Fargo, the senior secured creditor, executed its collateral rights, putting Daol at risk of a total loss. In January 2022, Daol made an additional investment of $330 million to purchase the senior loan bond and secured ownership through the exercise of the collateral rights in March.
In March of the same year, Amtrak, the tenant of the station, began a legal dispute by claiming its right to condemnation. While Amtrak initially proposed a $250 million deposit to acquire the asset at a lower price, Daol fought back with five lawsuits. In the end, Amtrak agreed to settle at more than double the deposit price to avoid prolonged litigation. As a result, Daol not only recouped its investment principal ($430 million) but also secured additional profits ($75 million).
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
