Real Estate Workouts

Goldberg Kohn's Real Estate Group, in conjunction with the firm's Litigation and Bankruptcy & Creditors' Rights groups, has extensive experience in representing lending institutions in dealing with all phases of distressed commercial real estate loans - from portfolio analysis to REO disposition. The firm has represented banks, pension funds, insurance companies and other institutional lenders, and worked on all property types from single-family suburban land development to downtown office buildings. Goldberg Kohn has represented numerous institutional creditors in negotiated restructurings, bankruptcies and foreclosures of distressed investments. The firm's bankruptcy attorneys have also represented numerous institutional mortgagees in enforcing their lien rights in out-of-court restructurings and in Chapter 11 cases.

Goldberg Kohn attorneys are well versed in the specific laws and legal techniques associated with distressed real estate loans, including mortgage foreclosure, consent foreclosure, deed in lieu of foreclosure, single asset bankruptcy, including, restructurings, UCC sales, negative amortization, springing guarantees, consolidations and spreaders, lock boxes, participating mortgages, debt to equity conversions, secured debt to mezzanine conversions, mezzanine debt foreclosure, debt sales, receivership mortgagee in possession, non-recourse carve-out analysis and collection and ground lease terminations.

Representative Matters

• Assisted a pension fund mortgage lender in negotiating restructuring options, and provided a comprehensive analysis of the likely scenarios in the event the owner filed for bankruptcy reorganization. Using the most current "cram down" principles, the firm was able to provide the lender with a comprehensive analysis, including the worst-case scenario. This enabled the lender to realistically assess all of its options in dealing with the borrower.
• On behalf of a foreign bank, negotiated and documented a comprehensive restructuring of a portfolio of loans to different borrowers, all of which were controlled by the same principal. Prior to the restructuring, certain loans were performing and others were not; following the restructuring, the loans were all cross-collateralized and cross-defaulted. As a result, the borrower was less able, in a bankruptcy context, to leave the bank with only the non-performing assets.
• Assisted a ground lessor in enforcement of a ground lease under a downtown Chicago office building in connection with both monetary and non-monetary defaults.
• Represented both developers and capital joint venture partners in the unwinding of unsuccessful joint ventures for development and redevelopment of office, hotel and industrial facilities.
• On behalf of an insurance company, negotiated and documented the restructuring of a loan that put the borrower on a cash flow interest pay rate, which allowed for the property to turn around. Features of this restructuring included springing guarantees in the event of a bankruptcy, interest accrual and an equity participation in favor of the lender.
• On behalf of a local bank, successfully completed a contested mortgage foreclosure proceeding relating to one phase of an urban shopping center. In order to complete the foreclosure, the firm successfully challenged the borrower's bankruptcy filing and obtained an order from the bankruptcy court lifting the automatic bankruptcy stay. Once the mortgage foreclosure was completed the firm assisted the bank in its administration and eventual disposition of the asset. This involved not only general property matters such as leasing and real estate taxes, but also the administration of the bank's relationship with its participant banks.
• Assisted with the restructuring of a $50 million revolving loan secured by real estate in several states, involving consolidation of multiple existing facilities, conversion into a restructured single facility, and structuring to limit bankruptcy exposure.
• Performed the restructuring of a $17 million loan secured by a downtown Chicago hotel, involving redocumenting of a loan into senior secured and junior secured components, loan extension, addition of an equity participation feature, and imposition of an anti-bankruptcy guaranty.
• Assisted an institutional lender in taking back hotel assets in lieu of foreclosure. These transactions included analysis and enforcement of non-recourse carve-out guarantees and/or extension of these guarantees for post-closing audits.
• Completed the restructuring and eventual deed in lieu of foreclosure of a $10.5 million loan secured by a single office/warehouse property in suburban Chicago, utilizing negative amortization, cash flow use restrictions, anti-bankruptcy guaranty, and guaranty to provide uncontested deed in lieu of foreclosure.
• Represented a secured creditor who purchased a note and mortgage from RTC. Successfully defended the debtor's attempts to reduce the note to consideration paid to RTC; and obtained one of the few published opinions recognizing a secured creditor's security interest in post-petition hotel room revenues.
• Represented a secured creditor in connection with a hotel and golf course reorganization, including negotiating a plan of reorganization with the construction lender.
• Represented a secured creditor in connection with a "new debtor syndrome" Chapter 11 case involving a shopping center. Obtained one of the first published opinions recognizing a perfected interest in post-petition rents based solely on an assignment of rents recorded prepetition.

Speaking Engagements