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 premium CLE webinar with Q&A

Conducted on Thursday, July 12, 2018

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 conditions 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 a special purpose entity (SPE) that 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 such that it is unlikely to file, or be subject to, a bankruptcy petition, and 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 affecting the sole member.

Listen as our authoritative panel 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 noteworthy 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 its additional requirements?
  • 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?


Denny, Daniel
Daniel B. Denny

Gibson Dunn & Crutcher

Mr. Denny has a wide range of experience representing debtors, creditor groups and potential acquirers in distressed...  |  Read More

Newman, Samuel
Samuel A. Newman

Gibson Dunn & Crutcher

Mr. Newman is a member of the firm’s Business Restructuring and Reorganization Group and the Corporate...  |  Read More

Yearwood, Kahlil
Kahlil T. Yearwood

Gibson Dunn & Crutcher

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