I agree with you that that these idiots should never have lent this money in the first place. Where I disagree with you is that they should be LENDING FBleau any more money. The Fbleau owners only threw the parts that they didn’t personally guarantee into bankruptcy (the hotel and condos, not the construction company or the retail). Their lawyers have a different theory of what went wrong in this article. http://www.bizjournals.com/southflorida/stories/2009/06/08/daily39.html Basically, they are saying that when they didn’t get the money Lehman promised to build the mall, they skimmed from the hotel to build it.

The time for the banks to make that assessment has come and gone in my opinion.

If the banks did not want to take on the risk, fair enough, but making that decision AFTER most of the work is done, and mere months before opening is beyond reproach.

The banks should either commit to an endeavor or not. This half-assed “oh, now we have cold feet” nonsense is a guarantee of failure and has no place in business. You either follow-through with funding that was expected, or get the hell out of the way. Namby-pamby, wishy-washy bullshit hurts everyone involved … far more than a simple denial at the outset would have.

Now they are stuck, at this point through no fault of their own.

Stopping funding on a 70% finished project is a waste of the money they have already lent. If you think the guys are going to have a hard time paying it back once it opens, what do you think their chances are with a dead construction site?

Of course, this was also an easy way for the banks to snake in and get a mostly-finished project on the cheap.

“Hey, thanks for building all of this, go away now, we’ll take it from here.”

If lenders don’t honor the commitments, I have no idea why debtors should. The concept of “moral obligations” when dealing with banks is an antiquated concept.

I think you are giving the bank too much credit and not enough blame.

If they waited until near completion to “took one look at the numbers and figured there was no way they would ever get paid off” … then let’s face it, they weren’t geniuses to begin with.

At this point, I think they should have to follow through. Especially given that it’s not their goddamn money anyway, and given that much of it doesn’t even exist at all until they lend it.

If the banks were being run by such bright and ethical human beings, then it escapes me as to why the government would have to pluck money out of your paycheck every week at the point of a bayonet and hand it over to a bunch of millionaires, but as usual, I’m sure I’m missing something.

Given the totality of the situation, I think they should be required to follow through on commitments they made. The time to “take a look at the numbers” is long since passed.

Oversight on the part of the bank should not be the FBlue’s problem to solve.