Loan Workouts & Financial Restructuring

Loan Workouts & Financial Restructuring

Overview

Cox, Castle & Nicholson has developed a vigorous practice of advising lenders, regular and special loan servicers, buyers of distressed loans and properties, owners, and investors on all aspects of workouts, including bankruptcy planning considerations and federal income tax consequences. Our overall approach 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.  

Creditor/Lender

We have extensive experience advising lenders/creditors in connection with workouts of bridge, permanent, construction, commercial, conduit, mezzanine, and asset based loans. In connection with these transactions, we (i) assist the client in gathering data relative to the current state of the borrower and the project; (ii) conduct a forensics audit on the file (with a special focus on correspondence between the borrower and the lender), the existing documentation, and the current status of liens and title; (iii) advise the client as to the need, viability, enforceability, and desirability of, and draft, pre-negotiation letters, loan modifications, forbearances, and deeds in lieu of foreclosure; and (iv) advise the client on the enforceability of loan documents and guarantees, including the special issues that may arise in the context of mezzanine loans, the implications of inter-creditor agreements, the application of California's anti-deficiency rules, and the implications of California's one form of action rule. 

Debtor/Owner

We have extensive experience advising borrowers and owners in connection with workouts of bridge, permanent, construction, commercial, conduit, and mezzanine 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. In connection with these transactions, we

(i) assist the client in assessing the interests, rights, and remedies of, and potential remedies against, the lender and other relevant stakeholders;

(ii) advise the client (a) on the sale and disposition of distressed projects, including short sales, (b) in the negotiation of loan modifications, discounted payoffs and other forms of loan forgiveness, loan extensions, forbearances, and deeds in lieu of foreclosure, (c) 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, and (d) 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; and

(iii) 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.

Representative
Matters

<h3> Creditor/Lender Experience</h3>

Represented a lender in connection with the restructure of a loan secured by five properties and five membership pledges, which restructure involved splitting the promissory note into three separate promissory notes to add an additional lender as holder of the B Note and negotiating an intercreditor agreement with such holder of the B Note.

Represented lenders with respect to the restructuring of agricultural loans to nurseries, row crop farmers and permanent crop farmers, which agricultural loans were secured by crops along with real property.

Represented lenders in the workout and restructuring of numerous construction loans, including issues associated with making additional advances, the exercise of additional controls over disbursements, and requiring the retention of a consultant.

Represented a lender in the restructuring of accounts receivable/inventory/ equipment loans, which are not secured by real property, including loans to companies which produce ink cartridges, t-shirts, bathroom fixtures, irrigation equipment, and sprinklers.

<h3> Debtor/Owner Experience</h3>

Represented a developer in negotiation of a deed in lieu and settlement agreement in connection with an $8.3 million construction loan.

Represented a borrower in connection with the successful workout of a nearly $40 million securitized loan secured by a commercial office building that had been in receivership for over six months.

Attorneys &
Paralegals

Name Title City Phone  
Davis, Susan S. Senior Counsel Los Angeles 310.284.2282
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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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North, Erik M. Partner Los Angeles 310.284.2203
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Orlik, Randy P. Partner Los Angeles 310.284.2229
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Rosenthal, Richard H. Partner San Francisco 415.262.5131
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Sears, Jonathan Partner Los Angeles 310.284.2277
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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»