HQ Global's missed deadline triggered default provisions on FrontLine's $25-million credit line with Bankers Trust Corp. It also throws into jeopardy a $100-million loan from Melville, Long Island-based Reckson Associates Realty Corp, should Bankers Trust decide to call the credit line, Bloomberg reports. The Reckson loan is due in 2003.
Reckson has a stable of 182 properties totaling 20.6 million sf in the New York metro area. Donald Rechler is the firm's chairman and co-chief executive with his nephew, Scott. FrontLine, which owns 57% of HQ, was founded by Scott as Reckson Services Industries in 1998. Originally an Internet technology investment venture, the company shifted its focus to temporary office space a year ago.
The two firms are said to be in deep negotiations with their lenders on a mutually acceptable resolution to the situation.
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