Commercial Loan Litigation and Workouts
When interviewing lawyers to hire, ask yourself one thing: How can this law ﬁrm help me solve my problem? What we can oﬀer you is explained here, and what you see below are the fruits of our efforts. These are real results in real cases. Please understand, though, that every case is unique. Because we cannot guarantee you a particular result in your case, these results are only illustrative.
+/- $20 million. After protracted litigation, our clients faced collection on a judgment of almost $20 million in favor of a large national lender. We worked with our clients and the lender to develop a creative workout structure that combined a cash payment with a secured settlement note and a deed in lieu of foreclosure.
$9 million. A large national lender sued our clients for a judgment of over $9 million on several commercial loans. After a thorough and detailed investigation, we asserted a successful counterclaim that the lender breached the implied covenant of good faith and fair dealing in making one of the loans at issue. The case was pending for over two years, during which we defeated the bank’s eﬀorts to have the court dismiss the client’s defenses and give the bank a ﬁnal judgment. With a jury trial on looming on the issue of whether the bank breached the implied covenant of good faith and fair dealing, our clients were able to settle with the bank on very favorable terms after a long and diﬃcult negotiation.
$9.2 million. After a forbearance agreement failed to resolve a commercial loan, we negotiated with a national lender and found a deal that included a deed in lieu of foreclosure coupled with a structured deficiency note that gave our client time to resolve the remaining debt on favorable terms with incentives for early payment.
$5.2 million. A large group of high net worth guarantors were dealing with a default on a multi-family loan after their original lender failed. After difficult negotiation, we were able to get a deed in lieu of foreclosure in place with the lender coupled with a small and satisfactory deficiency payment relative to the amount owed.
$4.5 million. A regional lender sued our clients for over $4 million after the bank refused to renew the loan despite the client making all payments. During 18 months of hard-fought litigation, we worked with the clients to find a buyer for the asset. Once a buyer was fined, we negotiated a deed in lieu of foreclosure with the bank coupled with a deficiency payment that was a small fraction of the amount owed under the loans.
$7 million. A large regional lender sued our client for over $7 million on defaulted commercial loans. The lender also claimed that the client fraudulently transferred property in violation of the Uniform Fraudulent Transfers Act. We vigorously defended the claims for nearly two years, gathering hundreds of pages of documents in discovery and deposing corporate representatives from the bank to test the bank’s claims. After a protracted defense, we moved the matter to a mediation at which the client was able to settle the lender’s claims on very favorable terms.
$2.7 million. An arbitration demand was filed by a regional lender against our clients to enforce a real estate development debt of approximately $2.7 million. The loan was underwater because of depressed real estate values. The bank also sued our clients in state court alleging fraudulent transfers of property to avoid the same debt. We were able to move the entire matter to a mediation where we used an innovative settlement structure that released the clients from the debt for a payment that was a small fraction of the debt while retaining their rights in the collateral with an incentive to maximize the sales price of the collateral.
$2 million. A community bank sued our clients for almost $2 million on a failed real estate development. We moved quickly to demonstrate our clients’ lack of ability to satisfy the loan and, after careful negotiations with the lender, resolved the loan at less than one-tenth of the total debt. The lawsuit was dismissed, and the terms negotiated gave our clients time to pay the settlement while managing cash ﬂows.
$2.2 million condominium loan default. Our client faced loans in default on a condominium development totalling over $2 million. Avoiding litigation, we negotiated a deed in lieu settlement package with a bank working under a FDIC loss share agreement that got our client out from under the debt for the collateral plus a discounted deficiency payment.
$4.8 million. Our client was on the hook for a loan with a balance due of over $4.8 million and that balance was growing quickly because of a draconian interest rate. The loan had been sold from one lender to another, and the lenders had competing claims in litigation. We worked aggressively to sort through the claims of competing lenders. Once the proper lender was determined, we negotiated a highly beneﬁcial resolution package in which the client was released from liability for consideration of less than half the loan balance.
$1.2 million. After nearly two years of litigation following default on a business line of credit, we negotiated a post-judgment settlement structure that coupled a small cash payment with a secured sell-off feature that gave our client time to liquidate assets to satisfy the debt and avoid bankruptcy.
$1.1 million. Our clients purchased raw land in the mountains as a speculative investment. After the market collapsed, the loan went into default. After almost two years of litigation, we negotiated a post-judgment friendly foreclosure for the LLC and different settlement structures for the individual guarantors depending on their relative cash positions.
$700,000. Our client was in default on indebtedness of over $700,000, with that debt being tied to the client’s home through a “dragnet” clause. The client had substantial equity in the home, which was in danger of being lost. We were able to find and leverage language in the loan documents to defeat the “dragnet” clause. The client was then allowed to reﬁnance the house and avoid foreclosure. The remaining indebtedness, which was under water due to depressed collateral value, was subsequently settled by a deed in lieu of foreclosure and a single cash payment that was a small fraction of the total debt.
Office building loan default. Our client was a guarantor on a loan for a commercial oﬃce building. An aggressive regional lender presented the client with a set of unattractive options: write a big check or be sued. We were able to negotiate a “friendly foreclosure,” coupled with a new note, that will give the client relief from the loan, approximately 10% of the original note balance.
$2.6 million aviation loan. We negotiated and documented extension and modiﬁcation of a loan on a jet aircraft in excess of $2.5 million.
$2 million in attorney fees avoided. In a case involving a $12,000,000 loan in default, a large national lender ﬁled suit against our clients seeking recovery of approximately $2,000,000 in attorneys’ fees under the terms of the loan documents. We dug deep into not only the loan documents the lender ﬁled, but also into other documents regarding the same loan that the bank had not placed before the Court. Seizing on a limitation in the documents, we obtained a dismissal of the attorneys’ fees claim.
$2.8 million medical office default. In a case involving a default on a commercial loan on a medical oﬃce building, our client faced a total liability of approaching $2.8 million, including attorneys’ fees. While the lender could have sued our client for the entire balance, we were able to negotiate a friendly foreclosure of a depressed piece of collateral. As part of the package, the client was released from a deﬁciency of between $400,000 and $800,000 for a fractional payment ﬁnanced on favorable terms over a number of years.
$80,000 office suite loan default. Representing the lender, we pressed the borrower and guarantors into a quick summary judgment that left them with little choice but to face a debt they'd been avoiding. A consent judgment was put in place with strict payment terms and tough default provisions.