PrimaLend Creditors Block Payments to CEO-Controlled Firm

Creditors of bankrupt auto-dealership lender PrimaLend Capital Partners won a temporary halt of monthly loan payments to a firm controlled by the company’s Chief Executive Officer Mark Jensen.

Before the payments can resume, US Bankruptcy Judge Mark Mullin said he must decide if the Jensen-affiliated firm actually owns a stake in some PrimaLend loans. The Jensen firm, BVY Partners II, argues that since it paid $34 million for participation rights in the loans, whenever PrimaLend collects loan payments from its borrowers, part of the cash must go to BVY.