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 video webinar with Q&A

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Conducted on Tuesday, May 11, 2021

Recorded event now available

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Course Materials

This CLE course will prepare real estate counsel to structure special purpose, bankruptcy-remote entities that satisfy commercial mortgage-backed securities and portfolio lenders' requirements. 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 usually require that the owner/borrower of commercial real estate is a special purpose entity (SPE) adequately insulated from related parties' insolvency or bankruptcy. The goal is for the SPE entity to be "bankruptcy remote."

The bankruptcy-remote SPE must be structured so that it is unlikely to file or be subject to a bankruptcy petition and prevent substantive consolidation with any parent or affiliated entity that may become subject to a bankruptcy or insolvency action. Existing entities should be examined and, if necessary, reformed to qualify as a "recycled entity."

Single-member LLCs have become a common form of ownership and present additional structuring to prevent the entity's dissolution 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 that appear in the owner/borrower's entity documents, 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 bankruptcy or insolvency
  2. The recycled entity: requirements to qualify
  3. Single-member LLCs
    1. Requirements of Delaware entity laws
    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?


Kelsey, Matthew
Matthew K. Kelsey

Gibson Dunn & Crutcher

Mr. Kelsey is a partner in the New York office of Gibson, Dunn & Crutcher and a member of Gibson Dunn’s...  |  Read More

Kidd, Allison
Allison H. Kidd

Gibson Dunn & Crutcher

Ms. Kidd is a partner in the San Francisco office of Gibson, Dunn & Crutcher. She is a member of the firm’s...  |  Read More

Wise, J. Eric
​J. Eric Wise

Gibson Dunn & Crutcher

Mr. Wise is a member of the Firm's Global Finance and Business Restructuring and Reorganization Practice Groups. He...  |  Read More

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