IStar Said to Weigh Pre-Packaged Bankruptcy Filing

IStar Financial Inc., the commercial real estate lender trying to restructure some of its $8.6 billion of debt, may seek bankruptcy protection after creditors blocked it from amending loans, said people with knowledge of the plan. IStar fell 13 percent.

The company expects to begin meeting with creditors in coming weeks to discuss potential terms of a so-called pre-packaged bankruptcy, which wouldn’t occur until sometime next year, said the people, who asked not to be identified because the plan isn’t public. IStar, led by Chairman and Chief Executive Officer Jay Sugarman, hasn’t yet held talks with creditors on a possible bankruptcy. That process is likely to begin as soon as next month, the people said.