Special Purpose Entities in Real Estate Transactions: Structuring and Documentation

Mastering Separateness Provisions, Single Member LLCs, Recycled Entities, Independent Directors and Non-Consolidation Opinions

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

Conducted on Wednesday, January 4, 2017

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will prepare real estate counsel to structure special purpose, bankruptcy remote entities which satisfy the requirements of CMBS and portfolio lenders. The panel will discuss current separateness provisions, the requirements and documentation for independent directors, single member LLCs and special member provisions, and the components of an acceptable non-consolidation option.


Lenders require that the owner/borrower of commercial real estate be formed as a special purpose entity (SPE) which is adequately insulated from the insolvency or bankruptcy of related parties. The goal is for the SPE entity to be “bankruptcy remote.”

The bankruptcy-remote SPE must be structured so it is unlikely to file, or have filed against it, a bankruptcy petition, as well as to prevent substantive consolidation with any parent or affiliated entity which may become subject to a bankruptcy or insolvency action. Any existing entity must be examined and amended if necessary, to qualify as a “recycled entity.”

Single member LLCs have become a common form of ownership and present additional structuring to prevent dissolution of the entity due to events effecting the sole member.

Listen as our authoritative panel of real estate finance, corporate and bankruptcy attorneys discusses best practices for structuring SPEs to achieve bankruptcy remoteness and avoid substantive consolidation. The panel will review single purpose and separateness provisions which should appear in the owner/borrower’s entity documents, the requirements particular to single member LLCs (including special or “springing” member provisions) and recycled entities, independent director qualifications and documentation, and best practices in drafting and reviewing non-consolidation opinions.



  1. Structuring a special purpose entity
    1. Single purpose provisions
    2. Separateness provisions
    3. Barriers to filing for bankrupcty or insolvency
  2. The recycled entity—requirements to qualify
  3. Single member LLCs
    1. Requirement of Delaware entity
    2. Special or “springing member” provisions
  4. Independent directors
    1. When required
    2. Qualifications—ID providers
    3. Independent director documents
  5. Non-consolidation opinions
    1. When required
    2. Case law analysis
    3. Determination of pairings


The panel will review these and other key issues:

  • What kind of entity is acceptable, and what provisions should be included in the entity documents, for an entity to qualify as an SPE?
  • What is a recycled SPE, and what are the additional requirements relating thereto?
  • What are the additional drafting considerations for single member LLCs?
  • What are the current requirements relating to independent directors, and how is the hiring of the independent director documented?
  • What are the components of a non-consolidation opinion, and what are the proper pairings to be considered in the opinion?


Samuel R. Arden
Samuel R. Arden

Hartman Simons & Wood

Mr. Arden has extensive experience as a litigator, working on cases involving a wide variety of real estate disputes,...  |  Read More

Whalen Kuller
Whalen Kuller

Senior Counsel
Hartman Simons & Wood

Mr. Kuller has extensive experience representing corporate clients on acquisitions and divestitures, joint ventures,...  |  Read More

John H. Lewis
John H. Lewis

Senior Counsel
Hartman Simons & Wood

Mr. Lewis' practice focuses on a wide range of transactions involving virtually all types of commercial real...  |  Read More

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