Default Restructuring and Recovery Group
Business and project owners who have experienced success throughout their careers are being confronted with an unprecedented challenge: the inability to pay business debts. According to a report on commercial real estate lending issued March 3, 2009 by Deutsche Bank, of the estimated $154.5 billion in U. S. loans maturing through 2012, $87.7 billion, or 57% of those loans, will not qualify for refinancing. This will inevitably result in maturity defaults on many performing loans.
The causes of default are myriad:
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A performing loan may mature, and a decade old relationship with a lender comes to an unexpected end despite years of punctual payments.
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A crucial tenant may leave an office building and a loan covenant is no longer met.
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A loan officer with limited experience in your business demands changes in your operation which you know are counterproductive, but uses the threat of default and litigation to effectively run your business for you.
Our focus is on keeping business owners in business and in control of their assets.
Our Default Restructuring and Recovery Group contains multidisciplinary expertise in the critical areas of business, real estate, tax, insolvency counseling and litigation. We understand the differences in the motivations, flexibility and constraints of various types of lenders. Not all defaults, and not all lenders, are the same.
Although litigation is never preferable, sometimes it is necessary. By utilizing a team approach, our litigators are aware of your unique circumstances at the time of our initial engagement. If litigation is necessary, loan documentation often puts borrowers in a disadvantaged position. Immediate response is necessary to level the playing field.
Recently, we have successfully helped clients though the following types of default scenarios:
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Negotiated a forbearance agreement for defaulted loan and negotiated terms of business owner’s replacement financing.
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Negotiated a loan forgiveness and loan restructuring arrangement with a CMBS lender for a troubled shopping center.
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Advised minority guarantor on steps to avoid personal liability under non-recourse exceptions to a CMBS loan guaranty.
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Negotiated revisions in loan covenants to allow the borrower to stay in continued compliance with an existing loan agreement.
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Obtained an emergency stay against action to execute against a guarantor facing a cognovit judgment.
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Negotiated with sources of equity financing to facilitate an equity infusion to permit continued operation of a business.
Attorneys in this area:
James V. Maniace, Co-chair
Roderick H. Willcox, Co-chair
James D. Abrams
James J. Chester
Christina Hultsch
J. Anthony Kington
Lark T. Mallory
Joseph C. Pickens
Todd A. Weber