Distressed Debt Acquisition & Disposition

Distressed Debt Acquisition & Disposition

Overview

Cox, Castle & Nicholson has extensive experience representing and advising loan purchasers and sellers in connection with performing, sub-performing, and non-performing real estate loans and REO. We utilize an interdisciplinary approach to handle all aspects of an individual loan or loan portfolio purchase transaction – from the acquisition of loans to the disposition of loans and the underlying assets. We combine (i) our extraordinary expertise in negotiating and documenting distressed real estate loan portfolio purchase and sale transactions with (ii) the broad spectrum of skill sets critical to diligencing, acquiring, enforcing, restructuring, and disposing of distressed real estate assets. 

Loan Sales

Our attorneys have provided extensive representation to leading investment banks and major national banks, as well as regional and local firms, in numerous distressed real estate portfolio transactions. Among such transactions are some of the most visible, largest distressed real estate pool purchase and sale transactions occurring during the last major real estate down cycle.

Loan And REO Acquisition

In advising our clients, we offer them more than just a nuanced understanding of the purchase and sale contracts. Our integrated approach to distressed debt transactions and the negotiation of purchase and sale agreements involves balancing (i) those facts that can be established through seller disclosure and feasible cost effective due diligence with (ii) contractual assurances and protections designed to address those matters which cannot be so established. We seek to build integrity of information into the portfolio purchase process so that bids and go-hard dates for purchase money deposits and contractual commitments are based on a defined set of seller disclosures and representations and a timetable that affords the buyer a reasonable opportunity to perform its due diligence. Utilizing our vast experience in representing lenders and borrowers in the negotiation and documentation of loans, our dedicated team of distressed debt attorneys are able to analyze the loan documentation to determine the adequacy, completeness, and enforceability of such documentation; matters pertaining to title; issues affecting the priority of the seller's liens created by such documentation; issues presented by intercreditor, co-lender, and pooling and servicing agreements; issues concerning unfunded lender obligations required by such documentation; and assessing potential lender liability relative to the seller's asset management of the loans being sold. Our attorneys also have extensive experience in counseling the distressed loan purchaser in observing entity formalities, structuring entities and transactions to comply with lender licensure requirements and usury laws, and tax structuring and planning, at both the state and federal levels, for all types of transactions.

Post-Acquisition Management

Once acquired, our depth and breadth of experience in representing lenders and owners of land allows our clients to realize on collateral for distressed loans and then the repositioning, development, and sale of that collateral. As a consequence, we routinely assist our clients with enforcement of loan documentation (including claims against guarantors), defense of lender liability claims, foreclosure, and ultimate recovery of real and personal property collateral. Once complete, or if REO property is acquired, our attorneys commonly assist in a wide range of real estate issues including property management and leasing, managing risks and liabilities, and in developing and implementing enforcement and recovery strategies, devising strategies to guide our clients in obtaining necessary entitlements, and in preserving and modifying existing entitlements for the underlying assets, exploring any risk associated with and implementing strategies on account of remediation activities and in brownfield development, and development and execution of tactics to reduce risk in all aspects of development and construction operations.

Representative
Matters

Represented an investor in potential acquisition of note pool for $380 million, with assets in western United States and Hawaii. Engagement included assistance in entity structuring issues, internal and external funding structures for note pool, and diligence.

Represented one of the top five banks in the United States in sale of environmental contaminated property. Services provided counseling on transitional issues with existing tenant, structure of sale and risk minimization associated with environmental condition. 

Represented a publically traded mortgage REIT in connection with the sale of an approximately $50 million mortgage loan secured by property in Dallas, Texas. The buyer was affiliated with the borrower under such loan, and services provided to client included proper structuring of releases from the borrower and guarantor.

Represented an investor of the purchase of partially sold condominium complex located in Chicago, Illinois from one of the top five banks in the United Statements. Engagement included assessment of risks and structuring of mitigants with respect to condominium regime. 

Represented a buyer in its acquisition of a B Note, who then acquired an out-of-the-money but controlling C Note, followed by a workout of a securitized loan transaction with the existing borrower, involving issuance of an option for a discounted payoff based on a profit sharing formula, for a Los Angeles multi-family complex valued in excess of $100 million.

Represented a buyer in its acquisition of a B Note secured by a portfolio of Silicon Valley office buildings and negotiated the co-lender agreement. Also represented the buyer in a deed-in-lieu of foreclosure transaction in which the B Note holder retained a purchase option to buy the REO and thereafter purchased the REO with a joint venture partner, involving debt and equity in excess of $100 million.

Represented a buyer in its acquisition of a B Note, who then converted its position into a controlling joint-venture interest with the existing borrower, cancelled the B Note and assumed a modified A Note in the de-leveraging of a securitized loan transaction, for a Colorado office building.

Represented a buyer in its acquisition of a B Note post-foreclosure following a Control Appraisal Event and loss of its option to buy the A Note at par (due to a post-bankruptcy foreclosure), in a securitized loan transaction. Such position was then converted into ownership of a large San Francisco portfolio of apartments valued at more than $100 million.

Attorneys &
Paralegals

Name Title City Phone  
Dreyfus, Caroline W. Partner Los Angeles 310.284.2207
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Karns, Gregory J. Partner Los Angeles 310.284.2204
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McClanathan, Mark P. Partner Orange County 949.260.4630
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Prigoff, Bruce E. Partner San Francisco 415.262.5140
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Snyder, Douglas P. Partner Los Angeles 310.284.2253
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Vesci, Adriana Partner Los Angeles 310.284.2243
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Waldman, Ira J. Partner Los Angeles 310.284.2244
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Weissburg, Adam B. Partner Los Angeles 310.284.2270
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Spotlight

Three Cox, Castle & Nicholson Attorneys Featured In LABJ

Gary Glick, Adam Weissburg, and Amy Wells were selected to be featured in the Los Angeles Business Journal's 2013 "Who... More»