Practice/Industry Group Overview
During every real estate recession since the 1970s, Sutherland attorneys have guided clients through distressed real estate challenges.
Through decades of real estate upswings and downturns, Sutherland attorneys have been there to help businesses with distressed real estate. Our lawyers help clients achieve the best business outcome, whether they are lenders or borrowers, purchasers or sellers. And since our workout, bankruptcy and restructuring experience is embedded within our Real Estate Practice Group, we keenly understand the special real estate issues that can arise with these matters.
We have particular skill with workouts, foreclosures and assumptions in the securitized debt arena. Sutherland is one of the country’s leading firms representing servicers of commercial mortgage-backed security (CMBS) loans, and we handle a large volume of foreclosures, extensions, workouts and restructurings. We understand real estate mortgage investment conduit (REMIC) rules and the special considerations that apply specifically to securitized loans, as well as their implications for foreclosed and real estate owned (REO) property. In addition, we have represented a number of life insurance companies in the resolution of real estate assets and are acutely aware of the issues regulated life insurance companies have when dealing with distressed real estate assets.
We know how to represent investors buying distressed loans as a means of acquiring the underlying troubled real estate, buying property at foreclosure sales, purchasing REO property from the foreclosing lender and forming joint ventures with distressed owners to recapitalize real estate assets. Our understanding of the credit markets, particularly the CMBS market, permits us to effectively and efficiently work with investors in seizing opportunities as to distressed real estate assets. Sutherland has been actively involved in assisting clients throughout each commercial real estate recession over the last 50 years.
More than just legal advice. Sutherland lawyers are at our best with complex financial restructurings that require experience and understanding of debt markets, particularly in real estate structured finance and capital markets.
Client driven. We strive to thoroughly understand our clients’ objectives and the business environments and markets in which they operate. This helps us to effectively and efficiently assist clients and achieve their goals and objectives.
Structured finance focus. We represent many major special servicers on their troubled loan portfolios and have worked on resolving complicated capital stacks involving multiple trust and non-trust assets and various tranches of participating mezzanine debt.
Responding to clients’ changing needs. In recent years, we expanded our practice to represent providers of debt, mezzanine and equity capital with respect to nonperforming securitized loans, CDOs and CLOs.
Depth to handle major cases. Our attorneys served on the unsecured creditors committee and post–bankruptcy oversight committee with respect to the liquidation of real estate and insurance interests in one of the largest administratively consolidated Chapter 11 cases ever filed by an individual.
Interdisciplinary approach. When our distressed real estate clients need us, we can draw on Sutherland’s experienced construction, tax, bankruptcy and litigation lawyers.
State and national expertise. We help our clients negotiate purchase and sale transactions in the context of state insolvency proceedings and federal bankruptcy cases.
Ability to litigate and the experience to avoid it. In some cases, litigating distressed real estate matters is the smart business move, but in others it should be the last resort. Sutherland lawyers help our clients identify which situations are worth going to court to resolve.
Nuts and Bolts
Sutherland provides the full spectrum of distressed real estate services:
- REO assets
- Represent lenders and purchasers in the purchase and sale of loans and REO assets, including note sales, foreclosures or deeds in lieu of foreclosure
- Workouts, bankruptcy and restructuring
- Advise clients regarding real estate workouts, bankruptcies and restructurings and have extensive hands-on experience with bankruptcy proceedings, state court receivership actions, foreclosures and insurance company conservatorships
- Real estate structured finance/special servicers
- Handle a large volume of foreclosures, extensions, workouts and restructurings and understand the REMIC rules and the special considerations that apply specifically to securitized loans
- Troubled asset management
- Represent developers and property owners in various issues that happen in difficult economic times, including tenant bankruptcies and related co-tenancy issues, tenant defaults and loan-related issues such as forbearance agreements and loan restructurings
- Enforcement actions
- Advise lenders and borrowers in collection and enforcement actions involving the entire capital and credit stack, including troubled joint ventures and mezzanine loan defaults
- Specialized transactions
- Advise on specialized distressed asset transactions, such as hospitality and fractured condo deals and strategic divestitures of underperforming assets
- Securitized debt
- Represent master servicers, special servicers and providers of debt, mezzanine and equity capital with respect to performing and non-performing securitized loans, CDOs and CLOs
- Dispute resolution
- Litigate and arbitrate a variety of complex real estate disputes
- Foreclosures, deeds in lieu of foreclosure and note purchases
- Represent sellers and purchasers in all manners of acquiring and divesting such assets, including discounted payoffs, note purchases and sales and subsequent acquisition of assets by enforcement of legal rights, short sales, purchases at foreclosure sales, purchases of property through receiverships and purchases of REO assets from foreclosing lenders
- Tenant bankruptcy
- Represent landlords in connection with tenant bankruptcy cases and related co-tenancy issues
- Insurance company regulatory matters
- Experience with state insurance commissions’ rules and regulations
- Bank regulatory matters
- Skilled in bank regulatory actions and liquidating loans and real property from closed banks and other financial institutions
For decades, our attorneys have guided clients through market fluctuations and economic cycles to find workable, creative solutions to distressed real estate matters.
Sutherland assists clients with real estate fallout of Lehman Brothers bankruptcy.
We represented a large financial institution in connection with evaluating the impact of Lehman Brothers Holdings, Inc. (LBHI) bankruptcy proceedings upon a major loan sponsor/borrower partially owned by LBHI.
Sutherland attorneys negotiate and renegotiate terms and agreements on a nonperforming $800 million loan.
Our attorneys negotiated the sale of mezzanine loan tranches and renegotiated the intercreditor agreement for a nonperforming $800 million office loan.
Sutherland assists lender and receiver in a troubled NYC hotel project.
We represented a construction lender and receiver of a troubled New York City hotel project in matters related to the restructuring of the borrower, restructuring asset management agreements and sale of the hotel to takeout purchaser.