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Paulson Group Said to Hire Law Firm for Resort Bankruptcy Advice

The lenders that seized eight luxury resorts from Morgan Stanley’s real estate funds hired a law firm to explore a bankruptcy filing for the properties that may come as early as today, said a person familiar with the talks.

Paulson & Co., Winthrop Realty Trust and Capital Trust Inc. asked Kirkland & Ellis LLP to evaluate a bankruptcy as they pursued an extension of senior debt due today, according to the person, who asked not to be named because the talks are private. They have failed to reach agreement with holders of a $1 billion securitized mortgage, the person said.