Distressed Situations

We have advised and guided private equity funds, hedge funds, banks and other lenders in restructuring loans, winding down credit exposures, UCC sales of pledged equity securing mezzanine loans, UCC sales of equipment, consensual mortgage foreclosures, short sales, and conversions of mezzanine debt into equity, and the removal of managing members in preferred equity investments. We have advised numerous borrowers in connection with loan restructurings, including restructurings with special servicers of securitized CMBS debt, consensual foreclosures and deeds in lieu. Many of these transactions require a multidisciplinary team approach, and we work hand in hand with our tax, litigation and bankruptcy professionals.

Our Results

On behalf of lenders

• Represented an international hedge fund in an assignment in lieu of UCC sale of pledged mezzanine equity, where the underlying property was a portfolio of upper mid-scale hotels in the Northeastern United States with a fair market value of approximately $90 million. Structured the assignment in lieu, advised with respect to franchisor related issues, installing a replacement property manager ahead of the assignment in lieu, with respect to mortgage lender intercreditor issues and with respect to potential bankruptcy issues and other risks posed by the borrower and an institutional preferred equity investor.
• Represented private equity fund in the conversion of mezzanine debt into preferred equity behind a securitized large CMBS loan, where the underlying property was a portfolio of apartment complexes in New York City with a market value in excess of $200 million. Representation included the negotiation of loan amendments with the special servicer. Continued the representation of the fund in realizing upon the preferred equity two years later pursuant to structured refinancing and buy-out of the mortgage lender pursuant to the intercreditor agreement.
• Represented the lead lender in the restructuring of a bridge loan on a condominium conversion of a prominent Park Avenue apartment building in New York City.
• Represented two related, large commercial mortgage lenders in taking back by a series of deed in lieu agreements a portfolio of approximately $100 million of secondary market retail centers and in selling the resulting REO properties.

On behalf of borrowers

• Represented the ownership group of a hotel in Pennsylvania in a consensual foreclosure of a $10 million securitized first mortgage loan. The equity owners were concerned about carve-out guaranty exposure, and we were able to guide a resolution avoiding any guarantor liability under the loan guarantees or franchise agreement guaranty.
• Negotiation and litigation on behalf of private equity real estate fund to minimize guarantor liability and preserve assets in connection with a number of defaulted loans. The representation included complex litigation against one of the industry’s leading special servicers.
• Representation of a borrower and the related guarantors in a deed in lieu or consensual foreclosure of an approximately $15 million securitized mortgage loan upon environmentally impacted shopping center in Pennsylvania. The key issues were, obtaining time for the borrower to complete the environmental work and to maintain control of the Act 2 process while minimizing guarantor exposure. We worked hand in hand with our litigation team to achieve the desired results.