Leonard, Street and Deinard’s Loan Workouts and Creditors’ Remedies practice group is a multidisciplinary team of attorneys formed to assist financial institutions and other lenders in the management, disposition and acquisition of distressed loan assets. Our group is sensitive to our clients’ desire to manage legal costs while at the same time minimizing losses and the risk of legal liability. We also recognize that other clients view distressed loan assets as business opportunities.

The full range of services provided by this group includes workouts, foreclosures, receiverships, other creditors’ remedies, bankruptcy, regulatory and compliance advice, and sales and purchases of loan assets of all kinds.

Loan Workouts and Creditors' Remedies

Loan Workouts

In many cases, a negotiated solution is the most efficient one for a defaulted loan. We have substantial experience negotiating and enforcing workout agreements. While this approach does not work for every situation, we employ it whenever possible and practical for our clients. In many cases, loan workouts are negotiated in tandem with the enforcement of creditors’ remedies so that the lender is in the most advantageous position if negotiations are unsuccessful.

Creditors’ Remedies

Our creditors’ remedies experience includes enforcement of promissory notes against borrowers, property foreclosures, arrangements for receivers operating businesses as going concerns, guaranty litigation, co-guarantor claims, defenses based on satisfaction of underlying mortgage debt and terms of underlying debt, and multistate litigation.

We have foreclosed on numerous types of real estate, including hotels, apartment buildings, restaurants, office buildings, golf courses and agricultural property. We have advised clients in the use of self-help remedies and the use of receivers in collecting rents and preventing waste to properties. Our attorneys also have substantial experience foreclosing on, taking possession of and liquidating other types of collateral, including inventory, accounts receivable, equipment, licenses, trademarks, copyrights, insurance policies, securities and motor vehicles.

We have substantial experience representing banks and other financial institution clients in complex cases involving fraud, RICO, ERISA, securities law violations and “lender liability” claims. In addition, we frequently defend banking and financial institution clients in consumer fraud class action litigation.

We have represented the Resolution Trust Corporation in the investigation of director and officer liability claims and accounting malpractice claims arising from real estate acquisitions and development loans by failed thrifts, and liquidation of the assets involved, including distressed real estate.

Bankruptcy

We are equipped to assist our lending clients with all facets of bankruptcy, including bankruptcy litigation. Our practice regularly includes engagements in complex Chapter 11 and Chapter 7 filings where we represent secured creditors, including mortgagees and asset-based lenders, in disputed matters involving relief from stay motions, cash collateral motions, preference litigation, fraudulent transfers, dischargeability issues, DIP financing and disclosure statement/plan motions. We also represent numerous equipment lessors in bankruptcy cases in multiple jurisdictions where we often litigate lease assumption-rejection issues. Our attorneys are experienced in handling the complex mix of litigation and ongoing transactional advice that is often required in bankruptcy.

In addition, we represent creditors’ committees, trustees, receivers and fiduciaries in a variety of litigated and non-litigated matters.

Representative matters include:

• Representing a secured lender as to a $67 million credit facility in connection with an international entertainment business.
• Assisting a court-appointed receiver in successfully investigating and tracing millions of dollars from mortgage-lending transactions, marshalling assets and liquidating for the benefit of creditors.
• Regularly being called upon to provide counsel related to creditors’ remedies such as judgment enforcement, executions, UCC sales, garnishments and receiverships.

Tax Structuring of Bankruptcies and Workouts

Tax implications often strongly impact the exercise of creditors’ remedies and the implementation of negotiated workouts. Our experience includes advising lenders and borrower corporations, partnerships and LLCs through the issues and planning opportunities that arise in workout, debt restructuring and bankruptcy matters, such as bad debt and worthless securities deductions, preserving tax attributes and avoiding income recognition.

Sales and Acquisitions of Distressed Loans

Sales of Distressed Loan Assets

In some cases, the sale of a distressed loan asset is the most efficient means of quickly realizing value, mitigating loss and minimizing potential liability and opportunity costs. Many times, the sale of distressed loan assets involves the borrower in a multiparty negotiation.

Purchases of Distressed Loan Assets

For some clients, distressed loan assets present opportunities. We frequently represent clients in the purchase of distressed assets such as unsecured consumer debt, residential mortgage loans (including mobile home and subprime loans), raw and semi-developed land, HUD-auctioned assets and all kinds of commercial and multifamily assets.