New Bridge Financial

Real Estate Law

Loan Workouts, Bankruptcy & Commercial Remedies: Owners & Investors

Our Attorneys Workouts, Bankruptcy & Commercial Remedies practice combines the firm's skilled transactional attorneys, bankruptcy practitioners and seasoned litigators to provide strategic advice and solutions for investing in properties with distressed or non-performing loans. Our attorneys apply an interdisciplinary approach to best represent clients seeking to restructure their existing bridge, permanent, construction, mezzanine, "B-notes" and other types of commercial financing, engage in transactional workouts, or pursue insolvency-related litigation.

In many respects the Firm's Finance and our Workout, Bankruptcy & Commercial Remedies practices are complementary. Lessons learned in the context of workouts and restructurings result in the development of new strategies to help clients avoid similar difficulties in the future.

Keeping pace with significant and rapid changes in the area of workouts, we have developed a vigorous practice advising owner and investor clients on all aspects of workouts, including bankruptcy planning considerations and federal income tax consequences. Our overall approach to workouts is a practical and "business oriented" one that focuses on strategic analysis of the interests of relevant stakeholders, sensitizes the client to relevant legal issues and tailors the legal response to conform to the client's practical and business considerations. We also have extensive experience advising these clients in connection with workouts of commercial "conduit" loans, assisting them as they face the sometimes daunting requirements dictated by REMIC trusts, master servicers, special servicers, mezzanine lenders, "B-note" lenders, rating agencies and bondholders. Given our attorneys extensive practice representing project owners, developers and other participants in financing transactions, our attorneys have the expertise to develop strategies that best serve our clients' short-term and long-term goals. In connection with these transactions, we will:

  • Assist the client in assessing the interests, rights, and remedies of, and potential remedies against, the lender and other relevant stakeholders and developing a viable workout strategy to accomplish the client's objectives
  • Advise the client on the sale and disposition of distressed real estate projects, including short sales
  • Advise the client in the negotiation of loan workouts, discounted payoffs and other forms of loan forgiveness, loan extensions, forbearances and deeds in lieu of foreclosure
  • Provide advice regarding the income and other tax consequences of cancelling or modifying debt obligations, including analyzing the potential for recognizing cancellation of indebtedness income, and structuring transactions to minimize any related adverse consequences
  • Advise the client on strategies to modify or extend commercial conduit loans in light of the restrictions imposed by REMIC tax laws, servicing standards and REMIC trust pooling and servicing agreements
  • Interface with mezzanine lenders, "B-note" lenders, master servicers, special servicers, rating agencies, bondholders and their counsel in connection with the restructuring of commercial conduit loans
  • Advise the client on the enforceability of loan documents, focusing on the relevant limitations placed upon creditors under applicable law, the administrative and procedural requirements lenders must follow, the scope of liability under guaranties and indemnities and the availability of potential suretyship defenses
  • Counsel the client on potential rights or claims against lenders for failure to comply with the lender's obligations under the loan documents, including assessing potential claims for lender liability

The strategies and methods we use to solve the problems of financially distressed businesses include advising and representing debtors in connection with the filing of petitions under Chapter 11 of the Bankruptcy Code, and in other insolvency and reorganization proceedings, including out-of-court compositions, liquidations, receiverships, assignments for the benefit of creditors, and asset sales conducted in cooperation with the client's lenders and trustees. Our attorneys deliver expert counsel on:

  • The enforceability (or lack thereof) of the restraints on a borrower's ability to file for bankruptcy based upon the current status of its organizational documents and "SPE" restrictions required by lenders
  • The recourse implications under loan documents and guaranties for a client upon the filing of a bankruptcy
  • The implications of the "Single Asset Real Estate" Rules of Title 11
  • Debtors' rights in Chapter 11 reorganization cases, including representing debtors in contested and consensual use of cash collateral, prosecuting contests of claims of creditors, defending actions for relief from the automatic stay, disposing of collateral pursuant to a sale under Section 363 of the Bankruptcy Code, and drafting and pursuing a plan of reorganization
  • Representing the client in preference and fraudulent transfer actions
  • Negotiating consensual and pre-packaged plans of reorganizations

Foreclosure and Receivership
Our network attorneys have extensive experience defending borrowers in connection with judicial and non-judicial foreclosure proceedings and receivership matters of varying sizes and degrees of complexity, including with respect to hotels, apartment projects, master planned communities, condominiums, commercial office buildings, shopping centers, retail and mixed-use projects, industrial properties, affordable housing projects, and partially completed projects of various kinds.