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Bankruptcy
- DBSI: Representation of multiple secured lenders in consolidated Chapter 11 case in United States Bankruptcy Court for District of Delaware. Debtors are tenants in common and master lessees of numerous commercial properties throughout the United States.
- Lehman. Representing several parties in interest with substantial matters resolved or pending in the Lehman Brothers bankruptcy.
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Bankruptcy/Creditors’ Rights Actions
- Chapter 11 Competing Plan Confirmation. Represented multiple investor fund, the investors of which included private investors and the United States Government, holding a lien on a privately owned hotel in Manhattan Beach, California. Borrower filed for Chapter 11 in the United States Bankruptcy Court for the Southern District of California, and sought confirmation of a plan of reorganization. Lender filed a competing, liquidating plan. Hearings on valuation and confirmation were held on the same day. Lender prevailed on all motions, and title to the property was transferred to a special purpose entity (SPE), wholly owned by the Lender, pursuant to Lender’s confirmed plan. SPE eventually resold the hotel and provided financing in connection with such re-sale, which was repaid in full.
- Fraudulent Transfer Defense. Represented former owner / operator of a nursing home located in Kansas. The nursing home had perpetually lost money, and had changed ownership a number of times. The owner / operator sold the property to the manager of the property and, in the sale process, obtained a very valuable release from the manager, notwithstanding the presence of pre-existing claims on the part of the manager against the owner, and notwithstanding the fact that the cash portion of the sale price was, in and of itself, reasonably equivalent (if not greater than) the value of the facility at the time of the sale. The manager later filed for Chapter 11 in the United States Bankruptcy Court for the District of Kansas – and brought a fraudulent transfer claim in an effort to avoid the release that was given to the former owner as part of the sale. Judgment was obtained in favor of the former owner, who was found to have no liability to the estate.
- Full Lender Recovery Against U.S. Government in Criminal Forfeiture Case. Represented a lender who had multiple loans to various special purpose entities (SPEs) that owned apartment complexes located throughout the State of Ohio. Principal of the SPEs was arrested for Medicare and Medicaid fraud in connection with a separate business he owned and operated, and United States Government seized the apartment complexes as part of a criminal forfeiture. The burden was placed upon the lender to demonstrate that it had taken its liens in good faith in order for the lender to be entitled to have a right, prior to the Government, to collect its debt from the proceeds of sales of the apartment complexes. In a case that went to the United States Court of Appeals for the Sixth Circuit, the lender demonstrated its good faith and prevailed in a legal dispute as to whether it was entitled to collect not just its principal and interest – but its default interest, late charges, fees and costs, and prepayment consideration – before the Government was entitled to any proceeds of the sales.
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Extensive Loan Workout Agreements
- Multiple Lenders. Represented four banks in simultaneous workouts of multiple loans with a real estate investment firm that included extensive assignments of wraparound mortgages, auto-debit account agreements, receivership provisions and numerous related provisions to improve the position of each lender.
- Midwestern commercial and residential real estate projects. Represented numerous secured lenders in negotiation and documentation of loan workout and modification agreements calling for appointment of construction consultants, control of construction disbursements, completion of projects and recovery of state and federal historic tax credits.
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Foreclosures and Foreclosure Litigation
- Commercial Real Estate Finance and Investment Management Company. Represented a commercial real estate finance and investment management company as special servicer, in connection with related securitized loans secured by numerous industrial properties located in and around Chicago. Successfully settled litigation resulting in payoff of the loans, and obtained relief from a federal injunction entered by a bankruptcy court presiding over a related bankruptcy case necessary to consummate the settlement.
- Large Bank/Financial Institutions. Represented large bank in numerous commercial mortgage foreclosure actions and related bankruptcy cases, including case involving a landmark property in Chicago’s Loop, which included successful negotiations with Warner Bros. to use the property for filming one of the Batman movies; and including another case involving a large loan secured by commercial properties, an exclusive license to run oriental rug concession at all Marshall Fields stores, and an inventory of more than 5,000 oriental rugs. Successfully obtained title to all properties and other assets involved, and settled monetary claims against borrowers and guarantors.
- Federal Bank/Financial Institutions. Represented large federal bank in numerous commercial mortgage foreclosure actions and related bankruptcy cases involving a portfolio of defaulted HUD loans secured by large multi-family residential properties in Chicago’s Loop and suburbs. After substantial litigation, including contested plan confirmation proceedings, obtained substantial payouts on the client’s claims.
- Large Bank/Financial Institutions. Represented large bank in connection with dozens of lawsuits and matters relating to its floor plan financing to automobile dealerships around the country in the midst of the recent meltdown in the automotive industry, including replevin and turnover of vehicle inventories, foreclosure of mortgages and related bankruptcy proceedings.
- Midwest Housing Development Authority. Represented a Midwest housing development authority in dozens of mortgage foreclosure actions relating to subsidized housing projects around the Chicago area, and successfully protected the client’s interests in connection with those properties.
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Lender Liability and Class Action Defense
- Large Mortgage Corporation. Represented lenders in the defense of class action lender liability claims related to document preparation fees charged by lenders. Successfully obtained dismissal of federal savings bank and mortgage lenders in litigation in which a remaining defendant suffered an adverse judgment at trial in excess of $1 million.
- Multi-Count Summary Judgment in Defense of Lender Liability Claims. Represented a Wall Street lender in a commercial foreclosure action in Cleveland, Ohio. Borrower brought a multi-count counterclaim, asserting various lender liability theories, ranging from breach of contract to civil conspiracy. Lender prevailed on summary judgment, not only on its affirmative claims, but on all counterclaims as well.
- Southeastern U.S., Office Project. $89 million Construction Loan. Enforced Preliminary enforcement actions, negotiations with borrower, addressed litigation threats by general contractor.
- Prepayment Litigation, United States Bankruptcy Court, Southern District of Florida. Defended lender against Chapter 11 Debtor’s challenge under Section 506(b) to enforceability of yield maintenance.
- Reversal of Foreclosure Sale of Condominium Units, Southeastern U.S. Represented mezzanine lender and successfully attacked and set aside foreclosure sale of condominium units conducted by mechanics lien claimant on property, restoring $800,000-$1,000,000 in property to senior borrower.
- Southeastern U.S. Beachfront hotel. Enforced first mortgage loan.
- Eastern U.S., Defense of Lender Liability Claim. Represented secured lender in defense of a lawsuit brought by tenants in common to avoid a lien on a mortgaged property.
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Loan Enforcement/Lender Liability Litigation
- Southeastern U.S., Office Project. $89 million Construction Loan. Preliminary enforcement actions, negotiations with borrower, address litigation threats by general contractor.
- Prepayment Litigation, United States Bankruptcy Court, Southern District of Florida. Defend lender against Chapter 11 Debtor’s challenge under Section 506(b) to enforceability of yield maintenance.
- Reversal of Foreclosure Sale of Condominium Units, Southeastern U.S. Represented mezzanine lender and successfully attacked and set aside foreclosure sale of condominium units conducted by mechanics lien claimant on property, restoring $800,000-$1,000,000 in property to senior borrower.
- Southeastern U.S. Beachfront hotel. Enforcement of first mortgage loan.
- Eastern U.S., Defense of Lender Liability Claim. Represented secured lender in defense of lawsuit brought by tenants in common to avoid lien on mortgaged property.
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Mezzanine Loans
- New York, Condominium. Enforcement of $7 million mezzanine loan secured by membership interests in borrower owning mixed-use project (retail on lower floor with condominium conversion on upper floors and penthouse).
- Southwestern U.S., Condo/Marina Project. Represented mezzanine lender in connection with foreclosure of membership interests securing approximately $7 million in indebtedness and taking ownership and control of senior borrower owning undeveloped condominium/marina project.
- Residential Mezzanine and Secured Loan Workouts/Enforcement. Senior and mezzanine loan workouts, UCC sales, and foreclosures on condominium projects in Florida and D.C. areas.
- Multi-Family Mezzanine and Preferred Equity Workouts/Enforcement. Represented mezzanine lender and preferred equity regarding defaulted multifamily projects in Florida, Michigan and Tennessee.
- New York Condo Project. Enforcement of $13 million mezzanine loan secured by membership interests in borrower owning condominium project, and further secured by additional collateral consisting of ownership interests in operating businesses in Brooklyn, New York.
- California Multifamily Project. Workout of $3.1 million mezzanine loan in conjunction with senior lender restructure of $48.8 million mortgage loan.
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Preferred Equity
- LIHTC Projects. Various GP default negotiations, GP replacements, removal litigation with GP’s, defaulted debt situations, additional capital infusions, put transactions and other guaranty issues, tax terminations of partnerships and recapture issues.
- Preferred Equity, New York. Enforcement of $11.3 preferred equity investment secured by membership interests in entity owning condominium and additional collateral consisting of ownership interests in entities owning and operating businesses in Brooklyn, New York.
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Receiver Sales
- Receiver Sale of Apartment Complex, Southeastern U.S. Represented secured lender and obtained appointment of receiver and order authorizing receiver sale of complex.
- Receiver Sale of Apartment Complex, Northeastern U.S. Represented secured lender and obtained appointment of receiver and order authorizing receiver sale.
- Southeastern U.S., Representation of Secured Lender in Receiver Sale of Hotel Property.
- Receiver Sale of Hotel located in Atlanta Suburb. Represented secured lender owing $3.7 million in obtaining stay relief in bankruptcy proceeding, and structuring and finalizing receiver sale in state court proceeding.
- Southwestern U.S., Receiver Sale of Office Complex. Represented secured lender owing $18.3 million in connection with appointment of receiver and subsequent sale of mortgaged property, utilizing assumption of secured lender’s existing debt.
- Nursing Home Receivership. Represented securitized trust / secured lender holding a lien on two nursing homes located in St. Louis, Missouri, securing $30 million in debt. Obtained appointment of a receiver for the homes, after which Borrower filed Chapter 11 in Raleigh, North Carolina. Prevailed on Lender’s motion to have state court appointed receiver remain in possession of the facilities, after which the bankruptcy was dismissed and jurisdiction was returned to the state court in St. Louis, where lender then coordinated Receiver’s filing of a motion for authorization for receiver to sell the nursing homes out of receivership. Bidders for facilities made eligible to assume existing indebtedness at Lender’s discretion. Receiver sale motion granted, purchaser assumed existing indebtedness, and Lender was eventually paid in full, including out-of-pocket expenses incurred in the bankruptcies and in litigation. Case set trend by which securitized lenders, which cannot extend “new” financing to third-party buyers who wish to purchase property out of REO, have sought to coordinate receiver sales in which purchasers can apply to assume existing indebtedness.
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Receiverships
- Southwestern U.S., Office Complex. $18.4 million Mortgage Loan secured by two adjacent office towers. Represented senior mortgage lender in enforcement of senior mortgage lender rights and remedies including appointment of a receiver for the Property, implementing receiver sale of property, and documenting loan assumption by third-party purchaser.
- Midwestern U.S. Ethanol Plant. $65 million. Enforcement of secured lender rights, including appointment of receiver.
- Midwestern U.S., Retail. Represented secured lender holding debt in approximate amount of $33 million, obtaining appointment of receiver to administer, and obtaining judgment to foreclose shopping mall.
- Southwestern U.S., Office Complex. $18.4 million Mortgage Loan secured by two adjacent office towers. Represented senior mortgage lender in enforcement of senior mortgage lender rights and remedies including appointment of a receiver for the Property, implementing receiver sale of property, and documenting loan assumption by third-party purchaser.
- Midwestern U.S. Ethanol Plant. $65 million. Enforcement of secured lender rights, including appointment of receiver.
- Midwestern U.S., Retail. Represented secured lender holding debt in approximate amount of $33 million, obtaining appointment of receiver to administer, and obtaining judgment to foreclose shopping mall.
- Midwestern marble and granite company. Represented secured lender in obtaining appointment of receiver to administer and sell assets.
- Midwestern nursery and landscape business. Represented secured lender in obtaining appointment of receiver to administer and sell assets, negotiate with other secured lenders in coordinating sale of real and personal properties, and improvement of classification of loans during interim period.
- Midwestern trout fishing lodge. Represented secured lender in obtaining appointment of receiver to administer and sell assets, resolution of mechanics liens, and recovery of additional assets.
- Numerous Midwestern commercial borrowers. Represented secured lender in obtaining appointments of receivers to administer and sell assets, take control of equipment, and collect rents and accounts receivable.
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Restructuring
- Midwest residential apartment construction project. Represented lead bank in restructure of $20 million construction loan, appointment of project consultant, and cross-collateralization with multiple loans.
- Resort Hotel, Southwestern U.S. $210 million senior mortgage loan. Senior and junior mezzanine debt. Default, workout and restructuring.
- National Retail Department Store Chain. $780 million senior mortgage loan with $160 million mezzanine A loan and $65 million mezzanine B Loan. Complex loan structure with multiple participants and intricate master lease issues.
- 60+ Property Commercial Office Portfolio. Complex equity restructuring of the borrower under a $3.1 billion mezzanine debt package. The loan structure involved six levels of mezzanine debt and 12 individual mezzanine loans, which were beneficially owned by more than 35 participants in addition to a securitization trust. The restructuring involved more than 50 legal entities, including entities formed in Canada, Hungary and Cyprus, and required the amendment or restatement of virtually all governing loan documents.
- Northeastern U.S., Condominium Project. $234 million senior mortgage loan (with construction advances from junior non-pooled lenders). Complex loan structure with B participant and multiple mezzanine layers. Workout negotiations and multiple forbearance agreements.
- Northeastern U.S., Trophy Office Building, $800 million senior mortgage loan. Restructuring.
- Major Market, Western U.S., Luxury Hotel Renovation and Flag Change. $114 million senior mortgage loan (with construction advances from junior non-pooled lenders). Advised loan servicer with respect to appropriate documentation of construction draws and loan enforcement strategy. Worked out procedure with borrower and modified loan documents accordingly.
- Casino. $860 million senior mortgage loan. Loan modifications and complex loan structure with multiple levels of participants.
- Auto Dealership Forbearance Agreements, Midwestern U.S. Represented floor plan financier in connection with forbearance agreements affecting more than $20 million in secured debt, enabling borrower dealerships to refinance existing obligations.
- Southwestern U.S., Condominium Project. $380 million senior mortgage loan (with construction advances from junior non-pooled lenders). Complex loan structure with B participant and multiple mezzanine layers. Litigation between general contractor and owner. Mechanics liens, default declaration, advised lender regarding workout, and intervene in mechanics lien litigation.
- Southeastern U.S., Land Development/Mixed-Use Project. (Office, retail, residential, sports venue). $233 million senior mortgage loan (with construction advances from junior non-pooled lenders). Complex loan structure with multiple mezzanine layers. Major reconfiguring of project contemplated. Preliminary enforcement actions, negotiations with borrower.
- Southwest U.S. Apartment Complexes. $164.5 million senior mortgage loan with a $37 million senior mezzanine loan and a $35 million junior mezzanine loan secured by apartment complexes. Represented senior mortgage lender in enforcement and restructuring of debt with mortgage borrower, mezzanine borrowers and mezzanine lenders.
- Texas Apartment Complexes. $121.7 million mortgage loan, split into three tranches with a $102.2 million A note, an $18.4 million B note, and a $1.3 million C note, secured by a portfolio of apartment complexes. Represented A noteholder in enforcement and restructuring of debt with borrower and co-lenders.
- Resort Hotel, Southwestern U.S. $145 million senior mortgage loan with a $20 million mezzanine loan. Represented senior mortgage lender in default and restructuring negotiations with mortgage borrower, mezzanine borrower, and mezzanine lender.
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