Real Estate Workouts & Restructurings

With the fallout in today's credit markets, it is essential to have legal counsel experienced in the various disciplines needed to deal effectively with both the possibility and reality of non-performing real property loans and troubled real estate borrowers. Cadwalader brings together attorneys in the areas of finance, real estate, bankruptcy, litigation and tax to provide complete representation in all facets of real estate workouts, foreclosures and bankruptcies. Members of these practice groups have represented a wide variety of clients, including both lenders and borrowers, and have dealt with substantial properties in workout, foreclosure and bankruptcy situations, and are familiar with the unique concerns of large financial institutions, developers and government agencies alike.

Bank Loans: Together, Cadwalader's Finance and Financial Restructuring lawyers represent many of the largest international and domestic investment and commercial banks and banking organizations in their capacity as administrative agents, agents or lenders in troubled leveraged finance transactions, in super-priority and other in- and out-of-court syndicated lending transactions, and in chapter 11 debtor-in-possession financings. Adept at interpreting and applying the provisions of the Uniform Commercial Code, the Bankruptcy Code, other applicable substantive laws, and regulated and unregulated industry standards, our attorneys efficiently structure workout transactions and negotiate and draft critical documentation, including complex operating and financial covenants, for our clients' protection. With national reputations, these attorneys are well-known to financial market participants and courts around the country, having achieved favorable results in many complex and significant workouts and reorganizations. Their experience extends to implementing and monitoring these restructuring arrangements throughout all stages – from origination to collateral recovery or exit financing.

The team has represented, among others, Barclays Capital, as Agent, under the First Lien Credit Agreement to LandSource Communities Development LLC, the California-based developer of residential, industrial, and commercial real estate; Lehman Commercial Paper Inc., as Administrative Agent, under the First Lien Credit Agreement to LBREP/L-Suncal Master I LLC, the California developer of residential real estate; JPMorgan Chase Bank, N.A., as Administrative Agent, in the massive international Centro Properties restructuring involving an extensive portfolio of shopping centers across Australia, New Zealand and the United States; and JPMorgan Chase Bank, N.A. in connection with the Stations Casino chapter 11 cases as one of two mortgage lenders and in its participation with Fertitta Gaming as the successful bidder on certain Stations Casino properties.

Mortgage Loans:  On behalf of major institutional clients, our real estate partners, supported by an integrated team from other disciplines, have negotiated the restructuring and advised on the foreclosure of both permanent loans and construction loans, including those in which the construction of the project was incomplete. These workouts have included office buildings, hotels, shopping centers, industrial facilities, golf courses, apartment buildings, and co-op and condominium complexes. For example, we represented the special servicer in connection with the workout (following the events of 9/11) of the $563 million mortgage loan made by a major commercial mortgage company secured by Buildings 1, 2, 4 and 5 of the World Trade Center, New York. We also advised a major insurance company on the workout and restructuring of mortgage loans regarding One State Street Plaza and One Seaport Plaza, New York City, and represented a major financial services company on the joint venture dispute and workout involving the General Motors building in midtown Manhattan. In addition, we represented a major financial institution and various developers in joint ventures that took title to distressed assets, including numerous Manhattan office buildings and a regional shopping center in upstate New York. Cadwalader attorneys also have substantial experience in workouts involving real estate investment trusts and publicly traded real estate limited partnerships.

Mezzanine Loans:  In recent years, with the significant increase in mezzanine loan financings related to real property (in many cases, funded simultaneously with mortgage loan financings), Cadwalader attorneys have had numerous opportunities to represent various investment funds and financial institutions in the workout and enforcement of troubled mezzanine loans. Cadwalader's attorneys' extensive experience in the origination of mezzanine loan financings, in many cases with numerous levels of mezzanine sub-debt and complicated intercreditor arrangements among the mortgage lender and various mezzanine lenders, makes Cadwalader uniquely qualified to analyze and evaluate the rights and remedies, and related risks, facing mezzanine lenders with troubled loans. For example, we represented the first mezzanine lender in connection with the workout of an approximately $800 million loan to a Harry Macklowe entity. We also represented the mortgage and mezzanine borrowers in connection with a mortgage and mezzanine financing to facilitate the acquisition of more than 30 acres of land and 6 hotels and casinos in downtown Las Vegas, and in connection with the subsequent alleged default and attempted foreclosure of the mezzanine loan, we negotiated a settlement that involved the purchase of the mezzanine loan. In addition, we are representing the Japanese branch of a major U.S. financial institution in the proposed foreclosure of shares of certain U.S. subsidiaries of a group of affiliated Japanese companies securing a ¥119.5 billion loan to the Japanese companies.

Bankruptcies: The members of Cadwalader's Financial Restructuring Department are necessarily an integral part of Cadwalader's legal team in structuring real estate workouts. Among other major cases, our attorneys represented two major investment banks who were each significant repurchase agreement counterparties and loan purchasers in the New Century bankruptcy case; an investment bank that was a major repurchase agreement counterparty in the MLN bankruptcy, both in that bank's capacity as a creditor and a member of the creditors' committee; Barclays Capital, as Agent, under First Lien Credit Agreement to LandSource Communities Development LLC; and JPMorgan Chase Bank, N.A. in connection with the Stations Casino chapter 11 cases as one of two mortgage lenders and in its capacity in bidding on certain Stations Casino properties. In addition, we represented two investment banks in the bankruptcy of People's Choice, a sub-prime lender, and Lodgian, Inc., one of the nation's largest owners and operators of mid-scale hotels at that time, in its chapter 11 cases. Cadwalader's Financial Restructuring Department is also expert on issues involving the single-asset special purpose vehicles that are commonly formed in CMBS mortgage and mezzanine financings, including issues related to potential bankruptcies of such vehicles.

  • JPMorgan Chase in connection with its secured debt in the Stations Casino bankruptcy.
  • JPMorgan Chase in connection with the restructuring of approximately $2 billion bridge loan facility with affiliate of Centro Properties.
  • A syndicate of lenders in the restructuring of $1 billion of debt of Harrah’s Casino.
  • A syndicate of lenders in the restructuring of $22 billion of debt used in connection with the acquisition of Hilton Hotels Corp., which involved a lending syndicate of 26 banks and institutional investors.
  • A group of lenders in a $900 million commercial mortgage loan portfolio resulting from the Lehman Brothers bankruptcy.
  • A major U.S. financial institution in connection with restructuring of $2.2 billion of secured debt on a portfolio of shopping center properties owned by an Australian shopping center owner.
  • A commercial bank in the origination of a $52 million loan secured by a pledge of a defaulted mortgage loan in foreclosure with ongoing litigation among the partners comprising the borrower and the conversion of such loan to a $52 million mortgage loan upon the delivery of a deed-in-lieu of foreclosure and settlement of such litigation, all of which pertained to and was secured by a New York City office building.
  • HSBC as the agent for a syndicate of lenders in restructuring a $240 million fully advanced construction loan secured by a condominium project in Arlington, Virginia, resolving lien issues and implementing a mechanism for paying budgeted expenses going forward was created so that condominium units could close and the loan could be repaid.
  • HSBC, as agent, in the restructuring of a $215 million syndicated construction loan on a condominium project in the Inner Harbor section of Baltimore.
  • Brookfield Financial, an investor in the Las Vegas Hard Rock Hotel & Casino, in amending the terms, and extending the maturity date of, loans secured by the hotel and casino, including amendments to the mortgage and mezzanine loans secured under a CMBS facility.
  • Brookfield Properties Corp. in its investment of a portfolio of properties.
  • Westbrook Partners in connection with:
  • the purchase of mortgage and mezzanine loans in the aggregate amount of $170 million on multi-family complex in Washington, D.C.
  • the purchase of mortgage loan on Saint Vincents Hospital housing facility.
  • purchases of B notes, mezzanine loans and junior participation in mortgage loans.
  • purchase of hotels in Washington, D.C., San Diego, California and Framingham, Massachusetts.
  • Royal Bank of Scotland in connection with:
  • a $102 million mortgage and mezzanine loans on regional shopping center in Plano, Texas.
  • a $48.5 million mortgage loan on shopping center in Port Charlotte, Florida.
  • A global investment bank in the restructuring of the $325 million financing of a retail unit at 666 Fifth Avenue in New York.
  • An alternative investment and asset management company in connection with the commencement of enforcement actions under the mortgage financing of commercial condominium units in The Delmonico Plaza Condominium in New York and the sale of the mortgage loan subject to the continuing foreclosure action.
  • A major New York thrift institution in twelve simultaneously-commenced actions to foreclose over $70 million in mortgage loans on the underlying fees of cooperative apartment buildings in New York, Queens, Kings, Bronx and Westchester Counties, and in subsequent workout negotiations with the co-op corporations and the holders of mortgages on unsold co-op shares.
  • The mortgagee in a contested foreclosure proceeding and related bankruptcy case involving a $30 million mortgage on a large garden apartment project in Brooklyn, and in subsequent state court proceedings for a $20 million deficiency judgment and a fraudulent conveyance action against the guarantor, his wife and a captive corporation.
  • A syndicate in the financing secured by the Aladdin Hotel and Casino in Las Vegas.
  • An investment bank in connection with the restructure of a mortgage loan and sale of two levels of mezzanine loans on major Manhattan office building.
  • The owner/operator of a Las Vegas hotel/casino in connection with the restructure of approximate $650 million of mortgage debt.
  • A major shopping center owner in connection with restructure of approximate $150 million mortgage debt on a Northeastern U.S. shopping center.
  • A commercial bank as agent in the workout of a $600 million mortgage loan with four layers of mezzanine debt secured by 5 hotels in New York.
  • A commercial bank as agent in the workout of a $180 million construction loan with three layers of mezzanine debt secured by a mixed use project in Denver.
  • A  commercial bank as agent in the workout and foreclosure of an $83 million construction loan secured by a mixed use project in Arizona.
  • A bank syndicate in the workout of a $640 million construction loan secured by a mixed use project in Chicago.
  • An investment fund in the workout and sale of a multi-tier mezzanine loan secured by a condominium conversion project in New York.
  • An investment fund in the workout and sale of a mezzanine loan and B-note secured by a casino/hotel in Las Vegas.
  • An investment fund in the workout of a mezzanine loan secured by a 50 property portfolio in various jurisdictions.
  • An investment fund in the workout and foreclosure of a large land loan in Florida.
  • A major United States national bank as agent for itself and other syndicated institutional lenders in the workout, settlement and enforcement of remedies for construction loan projects in South Florida, Maryland and California, and for land acquisition projects in New York City.
  • JPMorgan Chase, as administrative agent, in the massive international Centro Properties restructuring involving an extensive portfolio of shopping centers across Australia, New Zealand, and the United States.
  • A major insurance company in the workout and restructuring of mortgage loans regarding One State Street Plaza, One Seaport Plaza and The Montana, New York.
  • A major financial services company on a joint venture dispute and workout involving the General Motors building in Midtown Manhattan.
  • A Japanese bank in the workout and foreclosure of $250 million of letter-of-credit backed notes secured by the Chrysler Building and related properties.
  • A major commercial mortgage company and various developers in joint ventures that took title to distressed assets, including numerous Manhattan office buildings and a regional shopping center in upstate New York, providing the borrowers with tax advantaged workouts and/or relief from guarantees.
  • A major New York commercial bank in the workout of troubled mortgage loans, including co-op and condo conversion projects.
  • A  major investment bank in the strategy for foreclosure of mortgage and mezzanine loans made in connection with two New York City office buildings.
  • A  $300 million workout arrangement for a New York pension fund in connection with loans and equity participations with a major U.S. developer.
  • Two major commercial banks in workouts, foreclosures and bankruptcies in the Washington, DC area, including TechWorld, Papermill Condominium, Potomac Mills Shopping Center, Washington Harbour, Gurnee Mills, and numerous Marriott, Ramada, Westin and Hyatt properties, involving office buildings, condominiums, hotels, golf courses and housing developments.
  • A major investment bank in a workout in lieu of foreclosure of a major San Francisco office building.
  • A  major investment bank in connection with deed-in-lieu settlement of a mortgage loan secured by Commerce Court located in Pittsburgh, Pennsylvania.
  • A Japanese investor in the restructuring and refinancing of a £44.1 million loan secured by the London Marriott Hotel, including an open-ended revolving facility for certain capital improvement costs, interest and other funding requirements, and a DM76 million loan secured by the Munich Marriott Hotel, including complex extension, cash flow reserve, and escrow components. Both restructurings included renegotiated partnership and management arrangements with the manager.
  • Various affiliates of a commercial bank in the portfolio auction sale of seven pools of reperforming and nonperforming single- and multiple-family mortgage loans and REO properties constituting more than 5,000 assets for in excess of $370 million.
  • A domestic bank in the disposition of a residential mortgage loan and REO property portfolio aggregating in excess of 4,000 assets for a sales price in excess of $300 million and negotiation and implementation of bridge financing on behalf of the seller.
  • The New York, Chicago, and Los Angeles branches of a Japanese bank in the disposition by auction of approximately 10 large commercial loans, participation interests, and REO properties aggregating in excess of $150 million.
  • A U.S. branch of a foreign bank in connection with the restructuring of a mortgage loan with respect to The Fashion Mall, Plantation, Florida.
  • A California-based institution in workouts involving six loans with outstanding principal balances exceeding $200 million secured by properties located in four states.
  • Two major investment banks who were each major repurchase agreement counterparties and loan purchasers, in the New Century bankruptcy case, and in the foreclosure and public auction and sale of over $3 billion in New Century subprime mortgage loans and residual securities.
  • An investment bank that was a major repurchase agreement counterparty, in the MLN bankruptcy, and in that bank's capacity as a member of the creditors committee.
  • Two investment banks in the People’s Choice bankruptcy, a sub-prime lender, including one in a contested transfer of servicing for over $3 billion in securitized mortgage loans.
  • A major residential mortgage company regarding asset disposition transactions in respect to their chapter 11 cases.
  • A major investment bank as stalking horse purchaser of substantially all of ResMAE's assets and as DIP financing lender.
  • A purchaser in the acquisition of the commercial loan portfolio of USA Commercial Mortgage Company and its affiliated chapter 11 debtors.
  • A major asset backed commercial paper program with regard to problems in the valuation of mortgage backed securities.
  • A major investment bank on various derivatives across from funds and other entities that have significant investments in mortgages and other illiquid securities and that are at risk of defaulting and/or filing for bankruptcy.

13 Attorneys

Altschuler, Fredric L. Senior Counsel New York
T. +1 212 504 6525
Anglin, Michael S. Special Counsel New York
T. +1 212 504 5657
Brandfon, Nicholas E. Associate New York
T. +1 212 504 6039
Carroll, James P. Senior Counsel Charlotte
T. +1 704 348 5116
Washington
T. +1 202 862 2216
Chamberlain, Holly Marcille Partner Charlotte
T. +1 704 348 5121
Dejoie, Jessy Senior Attorney New York
T. +1 212 504 6801
Dickson, Christopher J. Associate Charlotte
T. +1 704 348 5159
Dodson, Peter M. Senior Counsel Washington
T. +1 202 862 2287
Herman, Steven M. Partner New York
T. +1 212 504 6054
Hinkle, Melissa C. Partner New York
T. +1 212 504 6972
Neuman, Bonnie A. Partner New York
T. +1 212 504 5625
Robertson, Matthew Special Counsel Charlotte
T. +1 704 348 5257
Silverstein, Gary T. Partner New York
T. +1 212 504 6858

Contact(s)

James P. Carroll
+1 704 348 5116 
james.carroll@cwt.com
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Peter M. Dodson
+1 202 862 2287 
peter.dodson@cwt.com
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