How do you eat an elephant? “One bite at a time,” jokes Jerry Foster of Resolute Commercial Services. But, for Foster, the elephant was $75 million of debt and a borrower in default after attempting to purchase the Minnesota Vikings. Ultimately he succeeded, in part; but the other dozens of businesses he owned went into default. “He’s goes from $80 million to basically nothing,” Foster said.
Foster said his company gets appointed as receivers after owners make a bad investment or economics forces businesses into default. That’s when Resolute gets down to business, protecting and securing the assets or collateral of the loan. “Most times we’re being asked to stabilize the business and give a triage of what’s at play,” he said. And the University of Arizona-grad started up the receiver business with fortunate timing. In 2008 he and his business partner John Mitchell criss-crossed the nation to talk with bankers and other commercial lenders, but booked no business from it that year. “Literally the world changed Jan. 1, 2009,” he said. “It seems like we just got flooded with calls. We just were inundated.” He said the calls, following the impact of the Great Recession in 2008 on borrowers, were with many real estate groups — residential, retail, office and industrial. “We had everything that you can imagine,” he said.
For Foster, the engineering major, it was about solving problems. They could pivot businesses that weren’t successful into new lines of capital. But the trick was to remove the current management and get back to sound fiscal solutions. “The larger context of what we do is that we solve problems that are connected to commercial cial debt,” he said. “So, at the end of the day, that may look like an operating company, but there might be a piece of real estate underneath it.”
The company regularly is appointed by Superior Courts to serve as a receiver for the court. In that capacity Resolute works as a neutral third party to capture lost capital. “The job has no emotions,” Foster said. “Essentially we’re trying to really shepherd this bundle of assets or enterprise to the best possible outcomes for both parties.” That’s why Foster said the company goes into transactions with an “attitude of cooperation.” “We have found that I think you get a lot more places by being friendly, trying to win people over and help them see the value of what we’re doing and the opportunity for them to get on board with us,” he said.
And what happened to that $75 million elephant? Foster said the company has recouped close to $40 million and is still collecting. Oddly enough, Foster said despite years of working as an engineer, these days he recalls more and more about what he learned engineering school. “Not so much [because of] the math or the science or the x-plus-y-equals-z scenario,” he said. “It’s the methodical ability to approach a situation under which there’s no clear solution and basically never feel overwhelmed or intimidated by the challenge.”
- real estate ,