Warren Buffett's Berkshire Hathaway Inc and Leucadia National Corp have decided to jointly acquire Capmark Financial Group Inc's mortgage loan and servicing business for $490 million.

Pennsylvania-based Capmark is one of the largest US commercial real estate finance companies, owned by firms including Kohlberg Kravis Roberts & Co (KKR) and Goldman Sachs Group Inc.
 
It operates three core business lines: lending and mortgage banking, investments and funds management, and servicing.
 
The company reported a loss of $1.6 billion in the second quarter and said the Federal Deposit Insurance Corp (FDIC) intends to order the company to enhance its capital and liquidity. Accordingly, Capmark is currently working to restructure its debt and seeking options for all its businesses.

The company also said it is considering a bankruptcy filing.

In a statement, the company said it paid the newly formed Berkshire-Leucadia joint venture, Berkadia III LLC, more than $40 million to enter the mortgage asset sale agreement.

Under the plan, if the sale of the mortgage business occurs in a bankruptcy proceeding under section 363 of the Bankruptcy Code, the purchase price will consist of a $415 million payment in cash and $75 million in the form of a note.

If it occurs outside bankruptcy, Berkadia will pay $375 million in cash and the $75 million note that can be adjusted for losses.