Loan Workouts and Creditors Rights
McKenna Long & Aldridge (MLA) offers creditors and investors the entire range of disciplines required to analyze, plan and implement resolution programs for problem loans and problem loan portfolios. We have a proven track record, having represented both financial institutions and major investor groups in the valuation, acquisition, resolution and/or disposition of problem credits, nationally and internationally. Recently, our practice has collaborated with European counsel to design "turnkey" legal and business strategies for problem asset resolution and disposition in the European marketplace and has acted in a senior advisory capacity on major debt portfolio acquisitions in Europe.
Our firm provides the following legal services:
TRADITIONAL LEGAL SERVICES
Problem Loan Workouts
Our practice is committed to the philosophy that a negotiated, voluntary settlement, without litigation or bankruptcy, is the most efficient means of dealing with a problem asset. The practice's professionals regularly handle workouts of credits of all sizes and levels of complexity, from single-asset real estate loans and commercial loans to local or regional companies, to multi-bank credits to major national real estate and operating companies. Our lawyers structure and consummate workouts of all different types, from traditional economic restructurings, to collateral recovery or "liquidation" workouts, to "prepackaged bankruptcy plans." McKenna Long & Aldridge brings to each workout the experience and resources necessary to:
- Conduct complete due diligence, both legal and business, in connection with the credit and the collateral
- Establish a workout strategy, timetable and system of attorney accountability
- Devise the most appropriate legal structure for the workout
- Negotiate the workout
- Document and close the workout
Our professionals are experienced in the creation and use of state-of-the-art strategies and structuring techniques for minimizing the risks of "staged" workouts, adversarial litigation, bankruptcy and lender liability claims, many of which strategies and techniques have become industry standards for workout professionals.
Creditors' Rights Litigation; Remedy Enforcement and Defense
Although the negotiated workout is the preferred method of problem asset resolution, remedy enforcement is also part of the reality of the resolution process. The firm's litigation professionals conduct and coordinate legal proceedings throughout the United States, providing the entire range of remedy-enforcement, defense and other creditors' rights services, including real and personal property foreclosures, actions on notes and guaranties, receivership proceedings, rent assignment enforcement and other actions to protect and preserve collateral. Our litigators regularly defend against lender liability claims and other claims and counterclaims by borrowers and guarantors. These lawyers also work closely with the practice's workout lawyers to counsel financial institutions, investor groups, asset management companies and other holders of loan portfolios on practical, day-to-day means of minimizing and managing risks of lender liability claims which can arise as a consequence of workout efforts.
COUNSELING SERVICES
In addition to the traditional legal services discussed above, our professionals also consult with clients concerning the entire spectrum of issues presented by problem loan portfolios in today's marketplace. These services include:
Asset and Portfolio Due Diligence, Analysis and Strategy
McKenna Long & Aldridge offers a broad range of consulting services to financial institutions, investor groups, asset management companies and other holders of loan portfolios, including:
- Due diligence and legal risk analysis with respect to entire portfolios, to assist internal controllers, credit review committees and senior management in identifying problems and formulating resolution objectives and policies
- Evaluation of ongoing workouts of selected major credits, to give in-house workout specialists "second opinions" regarding proposed strategies and structures
- Advice with respect to participations with other institutions and investment groups
Asset and Portfolio Management Systems
Our professionals regularly consult with financial institutions, investor groups, asset management companies and other holders of loan portfolios to:
- Implement internal systems for managing workouts
- Devise and implement internal policies for evaluating and managing risks associated with the administration of loans and workouts
- Help train institutions' special assets personnel.
Our professionals frequently conduct seminars and training workshops for workout or special asset officers, credit analysts and other asset management personnel.
Asset and Portfolio Dispositions
Our professionals assist financial institutions, investor groups, brokerage firms and government agencies in the creation and development of financing structures and other techniques to facilitate the packaging, marketing and bulk disposition of large pools of problem assets. The firm also performs due diligence, legal risk analysis and strategy consulting with respect to specific assets and portfolios, to assist both sellers and acquirers of assets or portfolios.
Representative Engagements
US Domestic Financial Restructurings and International - Portfolio and Debt Transactions
United States Domestic Asset Resolutions
- Represented real estate investment fund of a New York investment bank in restructuring and positioning for liquidation a $125 million loan on a 1,500-room convention hotel located in the Los Angeles metropolitan area
- Represented real estate investment fund of a New York investment bank in positioning for liquidation and in liquidating an $84 million loan on an office complex in downtown Washington, DC
- Represented a West Coast money center bank in restructuring a $130 million construction loan on a special-purpose commercial building and negotiated an agreement with the borrower regarding a multi-lender shared "asset pool"
- Represented a credit corporation in restructuring and positioning for liquidation a $270 million line of credit secured by multiple single-family residential developments in the eastern United States and in California
- Represented a West Coast money center bank in the resolution of a $73 million loan to a publicly traded development company on a luxury planned-unit development in the State of Florida
- Represented investment partnership of a New York investment bank in restructuring and positioning for liquidation a $230 million revolving line of credit secured by 130 separate commercial real estate loans in northeastern United States
- Represented a New York investment bank in restructuring and liquidating a $32 million loan on an office complex in the vicinity of Chicago O'Hare Airport.
- Represented creditor in restructuring and positioning for securitization, a $65 million loan secured by 20, second-generation hotels and motels
- Engaged by a New York money center bank to analyze and render a "second opinion" regarding the bank's ongoing attempt to restructure a $260 million credit relationship with a troubled, nationally known hotel/motel operator
- Restructured $70 million of senior debt secured by a hotel in downtown Washington, DC for a west coast money center bank
- Represented a large regional, northeastern bank in restructuring $80 million of loans to a national real estate developer involving office buildings in Florida, Georgia, Pennsylvania and Delaware
- Served as counsel to a six-member bank group in the restructuring of a $60 million line of credit to one of the nation's largest developers of multifamily apartment projects
- Advised a large midwestern bank in the restructuring of approximately $70 million of debt consisting of term loan, revolving credit and letter of credit facilities to a national nursing home chain
United States Domestic Portfolios
- Represented a New York investment bank in acquiring, restructuring and adapting for securitization, a $2 billion commercial real estate loan portfolio sold by major finance company consisting of loans located throughout the United States
- Engaged by a New York investment bank real estate subsidiary in resolving assets in California-based $2 billion "bad bank" spinoff financed through commercial mortgage-backed securities offering
- Represented investment partnership of a New York investment bank in restructuring and liquidating a $1.2 billion commercial real estate loan portfolio sold by the Resolution Trust Corporation, acting for Amerifirst Bank and consisting of loans located primarily in the State of Florida
- Represented investment partnership of a northeastern pension advisory company in restructuring and positioning for liquidation, a $1.2 billion commercial real estate loan portfolio sold by the RTC on behalf of various failed thrift associations and consisting of loans located primarily in the northeastern United States and in California
- Represented investment partnership of a New York investment bank in restructuring and liquidating through various exit strategies approximately $300 million of loans on hotels and motels throughout the United States
- Represented investment partnership of a New York investment bank in restructuring and liquidating a $276 million commercial real estate loan portfolio sold by money center bank consisting of loans located primarily in New York, New Jersey and California
- Represented investment partnership of a New York investment bank in restructuring and liquidating a $250 million commercial real estate loan portfolio sold by money center bank consisting of loans located primarily in New York, New Jersey and California
- Represented investment partnership of a New York investment bank in the purchase of a $150 million portfolio of commercial real estate loans from major life insurance company
- Represented a New York investment bank in restructuring and liquidating through various exit strategies a $100 million commercial real estate loan portfolio sold by major life insurance company consisting of loans located primarily in the Midwest and eastern United States
- Represented a national bank in the sale of a $75 million portfolio of commercial real estate loans on properties located primarily in the southeastern United States
Engagements Outside of the United States
- Engaged by acquirer of first bulk sale disposition in Europe to develop French legal infrastructure for distressed debt resolution in France, train French asset managers and to set strategy with respect to problem French real estate credits sold by European bank
- Represented investor group composed of a New York investment bank, a U.S.-based risk capital investor and a European risk capital investor in pre-bid due diligence and transaction negotiation on four billion French franc distressed commercial mortgage offering from French insurance company
- Represented investor group composed of a New York investment bank, a U.S.-based risk capital investor and a European risk capital investor in pre-bid due diligence and transaction negotiation on twenty billion French franc distressed commercial mortgage and real property offering from French financial holding company
- Represented investor group composed of a New York investment bank and a European risk capital investor in pre-bid due diligence on one billion French franc distressed commercial mortgage and real property offering from French defeasance entity
- Represented a New York investment bank in resolution of $45 million distressed loan secured by resort property on the Pacific coast of Mexico
- Represented investment partnership of New York investment bank in restructuring and positioning for liquidation a $54 million loan on a resort hotel complex located in St. Thomas, Virgin Islands
- Represented a New York investment bank in resolution of U.K.-based loan secured by U.K. commercial real estate
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