A Closer Look

Distressed Commercial Property Workouts

The downturn in the economy these last few years has changed the landscape for lenders and borrowers. In many cases, real property no longer has sufficient value to pay off the loan which it collateralizes. Guarantors may no longer have the same net worth as they did when the loan was originally made. Despite all of this, the borrower may still be able to pay the loan on a timely basis, but may nevertheless be in default. Lenders and borrowers each have their own goals and each side needs to protect its position.

The attorneys in our real estate, banking and finance group have years of experience representing both borrowers and lenders and can anticipate issues in commercial workouts and minimize surprises. Some of the issues and strategies to be considered are:

  • Pre-default negotiation;
  • Forbearance agreements;
  • Loan restructuring alternatives;
  • Loan modification agreements;
  • Title insurance issues;
  • Business and legal issues arising from restructuring;
  • Third party creditor's rights;
  • Multiple lender financing;
  • Effect on guarantors.

Since not every situation is alike, creativity, advocacy and experience are needed to reach a satisfactory goal.

Learn more about Real Estate Services