DISTRESSED REAL ESTATE

There are few situations in the business world that invoke both fear and excitement more than distressed real estate. Whether you are an unfortunate victim or an investor seeking an above-average return, there are numerous pitfalls for the unwary and enormous upside for the careful player.

This is an area where brilliant lawyering can play a dramatic role in a client's success or failure ... and this is an area where our Distressed Real Estate Practice Group has positioned our firm to be the ultimate law firm for distressed real estate advice and transactions. Our Distressed Real Estate Practice Group is composed of exceptionally knowledgeable and talented attorneys in the various practices critical to distressed real estate -- namely, real estate, bankruptcy and litigation.

Although there really are innumerable scenarios that fall within the ambit of "distressed real estate," we have found it useful to break them out for more easy analysis and understanding into the following areas:

  • Purchasing and selling distressed real estate debt at the "property level" or at the "corporate level," either during or prior to a bankruptcy proceeding.
  • Purchasing and selling distressed real estate assets (other than debt), either during or prior to a bankruptcy proceeding.
  • Strategizing with our clients to capitalize on disputes/conflicts among various tranches of the capital stack and the ability of the holders of certain tranches of debt to seize control of assets, income streams and/or control over the exercise of remedies.
  • Insolvency/pre-insolvency strategies pertaining to an owner of real estate (typically, a borrower), including so-called "pre-packaged bankruptcy plans" and, of course, filing for bankruptcy itself.
  • Buying, selling and recapitalizing partnership, limited liability company or other co-venture interests in a distressed real estate situation.
  • Litigation -- both offensive and defensive -- pertaining to distressed real estate, including lender liability issues.
  • Extending credit to insolvent borrowers, high risk borrowers and bankrupt borrowers, including pre-petition loans and debtor-in-possession loans.
  • Debt restructuring, recapitalization or other reorganization of a distressed party which has not yet filed for bankruptcy, also known informally as a "workout."
  • Advising on the implications of the Emergency Economic Stabilization Act and any follow-on or related governmental actions and programs established under the Act.
  • Providing legal and business guidance and market insight to clients that focus on capital market and debt opportunities through our Structured Finance Practice Group.
  • Representing lenders and borrowers in connection with loan workouts.
  • Unusual transactions that present elements of the foregoing, but do not necessarily fit neatly into any category.

In general, the attorneys involved in our Distressed Real Estate Practice Group are experts in dealing with all stages (and on behalf of all sides) of the restructuring, insolvency and bankruptcy spectrum, including each of the areas noted above.

The matters on which we have been engaged include instances where our clients' counterparties have become insolvent (or have approached insolvency), and our clients have sought assistance to protect their interests. In other matters, our clients have sought to capitalize on distressed situations and have relied upon our expertise to ensure a positive result. We also have clients who are experiencing hardship during the so-called "credit crunch" and have requested our services to ensure a positive result. Some of our significant distressed real estate clients include American Realty Advisors, Angelo, Gordon & Co., Contrarian Capital Management, Column Financial, DLJ Mortgage Capital, EDGE Real Estate Advisors, Imperium Partners Group, Island Capital Group, NorthStar Realty Finance, Prada USA, Rizvi Traverse Management, Sears Holdings Corporation (and its subsidiary, Kmart Corporation) and many others.

The specialized distressed real estate environment presents difficult and complex issues requiring thought, analysis, judgment and, often, great creativity. Accordingly, attorneys possessing these skills can add enormous value ... and these are the exact skills that our Distressed Real Estate Practice Group brings to the table and is well known for.

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Under New York rules of professional responsibility, this communication is attorney advertising. The results portrayed in this advertisement were dependent on the facts of the case or cases being described, and the results will differ if based on different facts. ©2011 Duval & Stachenfeld LLP. All Rights Reserved.