Distressed Debt, Equity and Lease

Our Distressed Debt, Equity and Lease Subgroup actively represents a broad range of clients who have interests in various types of distressed real estate, including industrial, office, residential, condominium, apartment, hotel, retail, health care, telecommunications, gaming, and resort in all parts of their life cycle from unimproved, approved, under construction, phased development, stabilized, and obsolete.  Our clients include the following: borrowers and lenders, co-lenders, mezzanine lenders and loan participants; operators and developers, institutional investors, syndicated limited partners individually and in class actions, court appointed substitute general partners and court appointed receivers; secured creditors, undersecured creditors, official unsecured creditors' committees, unofficial unsecured creditors' committees and trustees; landlords in bankruptcy, tenants in bankruptcy and mortgagees in bankruptcy; DIP lenders; and purchasers out of bankruptcy of leaseholds, designation rights and rights to “restart” operating assets. 

In providing advice on complex workouts and turnarounds, the Distressed Debt, Equity and Lease Subgroup integrates multidisciplinary sets of skills and expertise on a team basis, not only deploying real estate and insolvency attorneys but also seasoned specialists in commercial litigation, state and federal tax, environmental law and intellectual property.  The breadth of experience has given our lawyers a significant appreciation of the dynamics of negotiations at each phase and for providing clients with creative alternatives in designing strategies for successful outcomes.  We continue to hone our expertise and regularly present on topics of current interest to our peers and clients.  Independent analysts including Best Lawyers in America and Chambers USA have recognized our attorneys as outstanding leaders in their fields.


Our mortgage lender clients include commercial lenders, special servicers for securitized loan pools, subordinated secured lenders, mezzanine lenders, preferred equity providers, B piece holders, lead participant lenders, participating lenders, syndication co-lenders, REITs, insurance companies and private equity and pension funds.  Our borrower clients include closely held real estate companies, operating companies, syndicated partnerships, joint ventures, REITs, high-asset individuals and private equity funds.

We have provided counsel to our clients in each of the phases that comprise a distressed real estate transaction, starting with discussions of breached commitment letters and projected illiquidity through loan default, hard lockbox and cash control, pre-negotiation letters, forbearance, modification for extension or interest accrual, workout, imposition of new management and budget controls, deed-in-lieu, appointment of receiver, consensual foreclosure, contested foreclosure, lender liability lawsuits, bankruptcy (voluntary and involuntary), reorganization, sales and liquidation.

The following is a representative list of matters:

  • national special servicers in the recovery of debt secured by blanket multi-state mortgage collateral in California and Pennsylvania;
  • top five pension fund in the termination of a failed commitment letter and retention of the loan fee;
  • regional commercial lender in litigation over a lapsed commitment letter and the retention of the loan fee;
  • regional assisted living facility developer in the extension and cross-collateralization of defaulted loans in Virginia and New Jersey;
  • undersecured creditor in the litigation of claims against directors' and officers' insurance, accountants and investors in the bankruptcy of a perishable foods cooperative agricultural organization in Sacramento, California;
  • national capital markets lender in restructuring of loan secured by pledges of first through fourth priority mortgage loans on major Dallas CBD office building;
  • leading conduit lender in restructuring construction and development loans on a major Northeast shopping mall;
  • major life insurance company in the take-back of an office park outside of Detroit, Michigan;
  • developer borrower in the negotiated give back of single tenant office/light industrial space in northern New Jersey;
  • national developer in negotiated early, discounted payoff and refinancing of major Philadelphia office building in need of repositioning;
  • structured finance lender in the restructuring and successful early payoff of a mortgage loan secured by Las Vegas hotel property and a related preferred equity investment, and the unwinding of the related hotel development credit facility that had been provided to the developer for the contemplated development of multiple hotels under the flag of a national platform; and
  • national financier in Bankruptcy Code Section 363 sales of debtors' assets in Pennsylvania, New Jersey and Delaware.


Our equity clients include operating partners, real estate developers, real estate managers, private equity fund investors, institutional lenders' subsidiary capital investors, individual limited partners, profits only general partners, sale-leaseback purchasers and partnership guarantors.  We have provided counsel in a variety of equity disputes, including partner loan advances, partner diluting equity advances, re-characterization of a general partner as a limited partner, redemption of  a defaulting partner's interest, substitution with a third party general partner for a defaulting general partner, dissolution of a partnership, liquidation of a partnership, fiduciary duty complaints, director and officer insurance recoveries, partnership consultant litigation and sales of assets out of bankruptcy.  The following is a representative list of matters:

  • developer partner in capital calls by operating partner and ultimate liquidation of a $25,000,000 golf course;
  • institutional investor partner in a stalled multi-family ground-up development;
  • institutional investor in a $650,000,000 defaulted destination residential resort development;
  • property management company as a substitute general partner in 55 strip mall syndicated partnerships under class action supervision; and
  • institutional investor in the buyback of a defaulted loan through a white knight intermediary.


Our leasing clients include landlords, tenants, managers, receivers and mortgagees in possession.  We have provided counsel and lease modifications as to rent and terms, lease buy-outs, lease assignments by landlords, lease assignments by tenants, subleasing and recognition agreements, tenant in possession occupancy upon a landlord in a bankruptcy rejection, tenant in bankruptcy assignment of a lease or designation rights, and release of assignors and guarantors upon tenant assignment or rejection of a lease. The following is a representative list of matters: 

  • operating truck company subject to forbearance with its revolving credit facility lender working out lease default and mitigation for vacating;
  • operating retailer tenant in defense of default for abandonment of a New York Madison Avenue location;
  • operating fitness company for default in assignment of a lease without consent;
  • operating technology company tenant for default in non-payment of rent;
  • national REIT in recovery of retail locations from bankrupt tenants; and
  • national private equity funds in acquisition of debtor tenants' assumed leases in bankruptcy.