iStar Financial with $8.6 billion in Debt Considers Bankrupty

As I recall earlier this year, I aroused the outrage of one reader when I mentioned the low market cap and considerable debt of Asbury Partners' successor iStar Financial, lauded by the city government last November for having deeper pockets and promising to be yet another savior for the City.
What does iStar's market cap matter? or words to that effect were fired off at yours truly.
According to Bloomberg News, iStar, now holding the former Asbury Partners' redevelopment zone properties it valued at $70 Mn as well as debt obigations to the City of Asbury Park, is considering bankruptcy alternatives in its efforts to restructure $8.6 billion in debt. Its stock has lost 25% of value on this news, says Bloomberg, who adds that the company's stock has lost 90% of its value since 2007.
Bloomberg writers note that some of the funds holding iStar debt have turned down its requests for what is known in the industry as 'A&Es' or 'Amend & Extend Agreements', or, cynically, 'Amend & Pretend Agreements'.  (See my story "Breathing Room on the Refinancing Cliff" on http://www.iimagazine.com/ )

From the start we didn't like the fact that despite the horrible economy, iStar saw it necessary to seize the properties in what looked like a desperate or furtive move -- over the Thanksgiving holiday. We also didn't like the lack of any public personna on the part of iStar. Where were they? Where was the human behind the curtain? These weren't the questions of an economist, just practical reactions. Why was a marketing man from Roseland, NJ, with no real estate chops to speak of, speaking to the press for the Daddy Warbucks of Real Estate, iStar Financial?
If their intentions were so honorable why didn't someone from iStar's company address the residents at a public forum, like a council meeting? So it seemed to me that taken into account with the company's other poor performance data and an earnings conference call I monitored during which no mainstream business media were invited to participate -- no tough questions thank you --  that this company couldn't carry Asbury Partners' debt a minute longer. And so I worried about the property tax payments it would now owe and the debt obligations it would inherit as well, since Asbury Partners enjoyed the credit of the City for large expenditures like improvements to the sewer plant, it was obligated to fund. The lawyers for the City and Asbury Partners, represented for the most part by Newark's former Deputy Mayor Alfred Faiella, had arranged for the City to obtain the monies by taking out goverment bond obligations, like we take out mortgages, on which Asbury Partners had to make the payments. Since last year, those payments have fallen on iStar.
At this point, I would hope that the City will smell the blood in the water and make iStar an offer it can't refuse. Seize the day Mayor, take back some of these prime oceanfront properties for nonperformance and/or present and future debt service, and rent them out or sell them to a hotel chain or maritime entertainment and education purveyor -- not a middle man -- and reduce our debt or at least set aside the monies for our debt payments. We might as well face it. There's no one coming to save this City. We are -- and have always been -- on our own.