Mezzanine Lending: Overcoming Lender Risks to Protect ROI

Negotiating Intercreditor Agreements and Assessing Foreclosure and Bankruptcy Strategies

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Tuesday, October 15, 2013

Recorded event now available

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Course Materials

This CLE course will discuss risks for mezzanine lenders in event of loan default including intercreditor agreement terms that impair lender rights and remedies, pitfalls in the foreclosure process, and recent developments limiting lender bankruptcy options to protect their investment.

Description

Although the commercial real estate market is rebounding, the equity gap remains. This means mezzanine loans remain a critical source of financing for projects. As lenders venture into the mezzanine market again, there are many issues they must consider to minimize the risks of these transactions.

Lenders must carefully consider exit strategies in the event of default. In light of the Stuyvesant Town/Peter Cooper Village case, lenders must aggressively seek favorable intercreditor terms, particularly with respect to cure rights.  Intercreditor terms can significantly limit lender foreclosure remedies.

Lender options in bankruptcy are limited by recent case law and overcoming challenges highlighted by the GGP and JER/Jameson cases is critical.  While the above risks preceded the financial crisis, recent developments provide a roadmap for mezzanine lenders as they assess and protect their investment.

Listen as our authoritative panel of attorneys analyzes risks for mezzanine lenders in the event of loan default, including intercreditor agreement provisions that impair lender remedies, the impact of state and local transfer tax in foreclosure, and recent bankruptcy developments limiting lender options.

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Outline

  1. Intercreditor agreement limitations on the mezzanine lender’s remedies and ability to foreclose
  2. UCC foreclosure process, pitfalls and best practices to minimize risks in the process
  3. Bankruptcy options and limitations for mezzanine lenders: Growth Properties and JER/Jameson issues

Benefits

The panel will review these and other key questions:

  • What are the critical terms of the intercreditor agreement that mezzanine lenders must negotiate to protect their remedies and foreclosure options?
  • What challenges does the Stuyvesant Town/Peter Cooper Village ruling present for mezzanine lenders and what are lessons learned from this case?
  • How will transfer tax in the event of foreclosure on the equity collateral impact the mezzanine lender foreclosure options?
  • What challenges are presented by the GGP and JER/Jameson cases for lender bankruptcy options?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Geoffrey R. Maibohm
Geoffrey R. Maibohm
Counsel
Alston & Bird

Mr. Maibohm focuses his practice on mortgage-backed and other asset-backed securitizations. He represents investment...  |  Read More

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