The firm has assembled a multi-disciplinary team of real estate, finance, business, litigation and bankruptcy attorneys with special expertise in advising and assisting institutional and private lenders in the negotiation and documentation of commercial and real property loan transactions, and in loan modifications, defaults, workouts, enforcement actions and recovery proceedings.
An unfortunate consequence of the precipitous decline in real property values and the related credit crunch has been the unprecedented, negative impact on private and institutional lenders. Significant declines in collateral value, coupled with accelerating instances of borrower and guarantor default, have created a new landscape of secured and unsecured transactions in which even the most cautious lenders have been gravely affected.
The impact on private-party lenders and institutional lenders has affected both new and existing lending relationships. The rules of the road have changed, and expert legal advice coupled with practical experience has never been more necessary than today. Our firm offers lenders the benefit of decades of experience representing private and institutional lenders in secured and unsecured commercial finance transactions and real estate secured loan transactions, including originations, loan restructurings and workouts, OREO acquisition and disposition and loan enforcement.
Strategic Advice
We understand the rights and remedies available to the lender faced with a non-performing loan, and can assist in devising alternative strategies for loan enforcement and recovery. We understand the nuances of California’s “anti-deficiency” protections and “one-action rule,” and can effectively help a lender through borrower and guarantor minefields. We’re able to meld the legal and business needs of the client into a cohesive plan. Our significant experience in negotiating and documenting commercial loans for acquisition, development and construction provides a reservoir of knowledge on which to base sound problem-loan advice. Our equally significant experience in the acquisition, operation and disposition of master development projects, commercial office projects and other commercial transactions makes us able to provide advice and insight into issues of valuation and the likelihood of success, or failure, of potential workout or recovery strategies.
Creative and "Outside the Box" Thinking
Our lawyers are some of the best and brightest in the business. We hire top students from top schools – Stanford, Harvard, UC Davis, UC Berkeley – to name a few. We pride ourselves on being careful, thorough and inventive in seeking good business solutions for the client, rather than adopting a “cookie cutter” debt collection approach to each and every non-performing loan and non-performing borrower. Not every defaulted loan requires a “knee-jerk” response of filing both judicial and non-judicial foreclosure, seeking appointment of a receiver, suing the guarantors and seeking writs of attachment on guarantor assets. What the client can do, and what the client should do, are often not the same. Our job is to advise and support the client by identifying, recommending, and taking the actions best suited to the resolution sought by the client. Our transactional lawyers are accomplished in complex, significant acquisitions and dispositions, and the risks and benefits associated with most types of secured loan collateral. We add “deal sense” to the mix of advice and strategy we provide to the client.
Loan Document Review and Preparation
Complexities in the loan enforcement process have caused many lenders to revisit their use of “off the shelf,” internally-generated loan documentation for commercial loans. The cost-effectiveness of such use, at the “front-end” of the loan, has in many instances proven illusory, at the “back end” of the loan. We assist lenders in revising forms to better protect the lender against borrower and guarantor defenses to enforcement, and by preparing form loan documents more attuned to the nuances of California practice and issues.
Loan Modifications, Restructurings and Workouts
We understand the legal needs and requirements for complicated loan modifications and workouts, and the need for practicality – a plan that has a reasonable chance for success. We are experienced in the negotiation and documentation of loan workouts and modifications, including the importance of pre-negotiation agreements, confidentiality agreements, standstill and forbearance agreements, and other, similar documentation.
Complex Lending Transactions
We have extensive experience in the documentation and negotiation of secured and unsecured credit facilities, including real property and mixed collateral secured loans for the acquisition, development, construction and refinancing of a wide variety of real property assets and projects. For example, we recently negotiated and documented a secured financing of a ground leasehold interest, and the financing of the acquisition and upgrade of 250 units in a failed condominium project. We are highly experienced in the nuances of California real estate lending law and the importance of careful loan structuring. In addition to representing lenders in connection with loan originations, we represent numerous clients in loan participations, the acquisition and disposition of outstanding loans, and the packaging and disposition of loan portfolios.
Judicial and Non-Judicial Foreclosure
We understand the “when, why and how” of trustee’s sales (non-judicial foreclosure) and judicial foreclosures, and the pitfalls for lenders in the notice, publication and bidding process. We know how to integrate foreclosure actions with actions against guarantors and other, third-parties so as to maximize the chances of full recovery by a lender. We’re also experienced in post-foreclosure risks to lenders and the disposition process for lender-owned properties.
Guaranty Enforcement
We understand the nuances of guaranteed obligations and the importance of preserving the lender’s ability to enforce guaranties and take action in a timely manner. We are experienced in filing and prosecuting actions on guaranties, and where necessary, seeking to protect assets through writs of attachment.
Writs of Attachment and Receiverships
We understand that some loan structures and the need to protect the collateral and its value during enforcement proceedings may require the appointment of a receiver or aggressive action to protect and attach assets.
Insolvency and Bankruptcy Support
It’s no longer unusual for a borrower or guarantor to wind up insolvent or in federal bankruptcy court. We have significant experience in handling the litigation, defense, enforcement and work-out of complex bankruptcy and insolvency matters, from the initial filing through relief from stay, plan confirmation or liquidation. We’re experts in formulating the strategies best-suited to the particular needs of the lender, while at the same time aggressively asserting and protecting the lender’s rights. For more information, see our description under the Practice Area “Insolvency and Creditor’s Rights.”
Individual and Portfolio Loan Sales
Sometimes the best strategy for a non-performing loan is to "get out." We have significant experience in the sale of loan participations, individual loans and loan portfolios. Among other transactions, we represented the State of California in negotiating and documenting two portfolio sales of the CIWMB’s mixed-collateral “Recycling Market Development Zone Loan Program” and we represented a private investor in the acquisition and disposition of a 453-asset portfolio of performing and non-performing loans.
OREO Property - Acquisition and Disposition
Lenders are not in the business of acquiring and disposing of real estate assets, yet in today’s economy, they find themselves burdened with the need to acquire and dispose of significant numbers, and types, of real estate and corporate assets. Even those special asset groups with significant asset disposition experience find themselves in a new, vastly different marketplace with many sellers, few buyers, and increased risk. We have extensive experience in major, complex real estate acquisitions and dispositions, and as part of our Lender Support Practice, assist lenders with recovery of assets through foreclosure and deed-in-lieu transactions, and with the subsequent disposition of those assets. We handle all aspects of the disposition of OREO assets, as single asset sales or as part of a portfolio, in single-buyer sales and through the packaging of assets and private/public auction process.
Third-Party Actions
Recent California cases have supported lender actions against third-parties whose professional negligence contributed to the lender’s loss, including appraisers, brokers and other professionals. We’re adept and experienced at “turning over the rocks” in complex default scenarios and finding alternative means for recovery for lenders.
Commercial and Consumer Finance
Our expertise is not limited to real estate finance. Our Lender Support Group has significant experience in the negotiation, documentation and closing of commercial and consumer finance transactions, including secured and unsecured revolving lines of credit, secondary financing and the regulatory framework for consumer and commercial finance transactions.
