Wednesday's Wall Street Journal had a front page article (no link) headlined "Real-Estate Financier's Death Hints At Trouble For Lenders," which recapped the tale of Scott Coles, a "flamboyant real-estate financier" who apparently committed suicide last month at the age of 48, potentially at the result of increasingly leveraged loans that destroyed his company, Mortgages Ltd, one of Arizona's largest private lenders during the real-estate boom.
Coles attempted to cover loan defaults by trying to raise additional funding while undermining the initial investors who gave him over $700M. When his additional round came up with a mere $10M, in the face of $131M in future obligations to borrowers, Coles may have taken drastic action rather than face the mounting lawsuits from investors, who brought charges of fraud, racketeering, and breach of fiduciary duty (in addition, Coles' personal life was also under duress, as he separated from his second wife).
So how do our Dodgers fit into this? Buried in the article were details of how he abandoned the conservative investment strategies of the company started by his father, and how Coles instead "...sought bigger, longer-term and riskier loans on signature Phoenix-area projects: a boutique downtown hotel, an entertainment complex at the spring-training stdium for the Los Angeles Dodgers and Chicago White Sox, 21 chateau-style brownstones."
Yikes! You mean, the Dodgers organization is associated with risky highly-leveraged real-estate developers? Gulp.
In a contracting real estate market, I wonder who will now fund that fantasyland theme-park-like P.F. Chang-architectural-style project that Frank McCourt hopes to build around Dodger Stadium?