Structuring Cross-Collateral/Cross-Default Real Estate Loans

Single vs. Multiple Mortgages; Partial Prepayment and Partial Release; Intercreditor Agreements for Senior-Junior Lien Positions

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


Conducted on Thursday, September 24, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will instruct counsel on proper structuring and documentation of cross-collateral/cross-default loans. The panel will discuss key provisions regarding prepayment/defeasance, partial release of collateral, reserves, and other complexities presented by crossed loans. The panel will also address structuring intercreditor agreements to minimize priority disputes.

Description

Cross-collateralization is common in real estate finance transactions where the borrower owns multiple properties that it mortgages as collateral for a single loan. Affiliated borrowers may also agree to cross-default and cross-collateralize separate loans, consolidating separate loans into one transaction for the benefit of the lender.

Provisions regarding partial prepayment, defeasance, and releases of collateral can be intensively negotiated in crossed loan structures and must be drafted with care. Counsel must tailor reserve provisions to address potential expenditures at multiple properties. Complex intangible and recording tax calculations may be required where properties are mortgaged in multiple states.

Cross-collateralization expands the potential liability of each affiliated borrower and each guarantor to encompass an entire loan portfolio. It can also wreak havoc after a borrower's default or bankruptcy when there are also senior and second lien or mezzanine loans. Counsel for first and second or mezzanine lienholders must carefully evaluate their respective positions and delineate their respective rights concerning each borrower and each property.

Listen as our authoritative panel of finance practitioners guides you through the structuring and documentation of cross-collateral/cross-default real estate financing transactions, negotiating intercreditor agreements, and best practices for protecting liens post-default or bankruptcy.

READ MORE

Outline

  1. Structuring and documenting cross-collateralization and cross-default loans
    1. Cross-collateral provisions: single vs. multiple mortgages
    2. Cross-default provisions: single vs. multiple borrowers
    3. Prepayment, defeasance, partial releases of collateral
    4. Reserves
    5. Multistate transactions: tax concerns
  2. Key negotiating points for borrowers and lenders
  3. Intercreditor agreements in cross-collateralized deals
  4. Enforceability of cross-collateral provisions after default
  5. Enforceability of cross-collateral provisions in bankruptcy

Benefits

The panel will review these and other key issues:

  • How senior lenders can maximize the effectiveness of a cross-collateral/cross-default provision in the senior loan
  • Prepayment, defeasance, partial release, and other concerns with crossed loans
  • Negotiating the intercreditor agreement to minimize lender priority disputes

Faculty

Bordy, Michael
Michael J. Bordy

Principal
Michael J. Bordy, A.P.L.C.

Mr. Bordy is a transactional attorney who has 26 years of experience handling a variety of issues in business,...  |  Read More

Hayhurst, Ren
Ren R. Hayhurst

Founder
Ren RH Legal Consultants

Mr. Hayhurst’s professional life has focused for over 30 years on all aspects of lender and borrower...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

48 hours after event

$347

Download

48 hours after event

$347

DVD

10 business days after event

$347 + $24.45 S&H