Capmark Financial Group Inc., one of the key commercial real-estate lenders in the U.S., along with some of its subsidiaries has filed Chapter 11 protection. The filing adds to the lingering concern that the commercial real-estate market is still struggling.

The company seeks to be allowed to continue to pay its vendors and salaries, and protect the businesses with its customers and partners.

Capmark was created in March 2006 through a leveraged buyout of the commercial real estate assets of General Motors’ finance arm GMAC. Earlier this year also, the company had indicated that it might file for bankruptcy due to deteriorating conditions in the financial and commercial real estate markets and capital inadequacy.

Capmark is currently negotiating the terms of the bankruptcy with its creditors, which include Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) among others.

Capmark reported a hefty loss of $1.62 billion in the second quarter of 2009 and has ever since been trying to raise cash through targeted sales and plans to sell its mortgage and loan servicing business. Capmark listed $20.1 billion in assets and $21 billion in liabilities as of Jun 30, 2009 in the bankruptcy filing in U.S. Bankruptcy Court in Wilmington, Delaware.

Several funds Incorporatedluding Kohlberg Kravis Roberts & Co, Goldman Sachs Group Inc. (GS), Goldman Sachs Capital Partners and Five Mile Capital owned about 75.0% of shares in Capmark, while GMAC LLC owned 21.3%, and Capmark employees and directors owned the remainder.

Subsidiaries included in the filing for Chapter 11 protection are: Capmark Finance Inc., Capmark Capital Inc., Capmark Equity Investments Inc., Mortgage Investments, Net Lease Acquisition, SJM Cap, Capmark Affordable Equity Holdings Inc., Capmark REO Holding, Summit Crest Ventures, Capmark Affordable Equity Inc. and 33 other low-income housing tax credit entities.

However, Capmark Bank unit, Capmark Investments, Capmark Securities Inc. and Capmark’s Asian, Indian and European subsidiaries are not included in the filing.

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