Real Estate Restructuring

With the fallout in today's credit markets constricting financing options and depressing the recent, record-high valuations of real estate, it is essential to have legal counsel possessing the breadth of knowledge and experience to deal effectively with the possibility and reality of non-performing loans and financially-troubled real estate owners as well as the opportunities that may arise to acquire equity or debt positions.

At Cadwalader, finance, capital markets, real estate, bankruptcy, litigation and tax attorneys work collaboratively to provide clients with a thorough consideration of all options and strategies available in acquiring and/or managing troubled real property projects (held as portfolio loans or inside securitizations) and mortgage and mezzanine loans secured by those real property projects. They are well-situated to analyze the possible risks and rewards on behalf of both traditional and non-traditional lenders and borrowers before investments are made and then to offer total representation to financial institutions, hedge, opportunity and private equity and other investment funds, developers and government agencies alike in real estate workouts, foreclosures and bankruptcies on a national and international scale.

Mortgage Loans: Strategies to protect rights and maximize options and recoveries in connection with troubled mortgage loans must fit the special circumstances of each case, taking into account the number of lenders, the participation of real estate trusts and privately or publicly-traded real estate limited partnerships, intercreditor relationships, servicers or special servicers for constituents from whom they may or may not be required to take direction, and local law. Cadwalader has represented various parties in a variety of circumstances where a mortgage loan and its individualized attributes are at issue, negotiating the restructuring and advising on the foreclosure of both permanent loans and construction loans for underlying projects that have included office buildings, hotels, shopping centers, industrial facilities, golf courses, apartment buildings, and co-op and condominium complexes.

Mezzanine Loans: With the significant increase in mezzanine real estate loan financings (in many cases, funded simultaneously with mortgage loan financings), Cadwalader attorneys have represented investment funds and financial institutions in the their workout and enforcement. With extensive experience in the origination of mezzanine loans, in many cases with numerous levels of mezzanine debt and complicated intercreditor arrangements, Cadwalader is especially well-qualified to analyze and evaluate the rights, remedies, and related risks, facing lenders and borrowers.

Bankruptcies: Because bankruptcy is always a possibility with troubled loans, any workout or restructuring strategy has to take into account the implications of the bankruptcy option. Our approach to troubled real estate loans does not end when a bankruptcy is filed. We have extensive knowledge about single-asset special purpose vehicles that are commonly formed in CMBS mortgage and mezzanine financings, including issues related to potential bankruptcies of such vehicles. We also have broad capabilities in the litigation aspects of real estate workouts and bankruptcy, including the contested foreclosures of numerous multi-million dollar mortgages and mezzanine pledges. In representing secured lenders, we have foreclosed mortgages on virtually every type of property, including office buildings, shopping centers, raw land, hotels, resort communities, condominium projects and cooperatives.

  • Represented JPMorgan Chase in connection with its secured debt in the Stations Casino bankruptcy. 
  • Advised a syndicate of lenders in the restructuring of $1 billion of debt of Harrah’s Casino. 
  • Advised 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. 
  • Advised 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. 
  • Represented 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. 
  • Represented 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.
  • JPMorgan Chase in a $2 billion financing post-bankruptcy of the Extended Stay Hotel chain.
  • Bank of America as a special servicer in the multi-billion dollar restructuring of a Blackstone portfolio.
  • JPMorgan in a $160 million bridge loan to an institutional investor of a portfolio of FDIC distressed assets to be refinanced through a CMBS non-performing securitization or through the workout and/or foreclosure of the individual loans.
  • Bank of America in the restructuring of approximately $2.6 billion mortgage and mezzanine financing on the LaQuinta Hotel chain owned by affiliates of Blackstone.

3 Attorneys

Bagby, Ingrid Partner New York
T. +1 212 504 6894
Ellenberg, Mark C. Consulting Attorney Washington
T. +1 202 862 2238
Petrick, Gregory M. Partner London
T. +44 (0) 20 7170 8688
New York
T. +1 212 504 6373