The commercial real estate industry is facing an impending tsunami of $2 trillion in debt maturities, with an estimated $929 billion coming due this year. If you will be caught in this net because the loan secured by your CRE...more
A recent opinion from the First Appellate District of Ohio is noteworthy for lenders for two reasons: (1) what language not to insert in a guaranty; (2) what information potentially needs to be relayed to a potential...more
Obligations reduced to a promissory note are often accompanied by a written guaranty. The law treats the guaranty as an independent obligation. A case recently decided by California’s First District Court of Appeal —...more
The Federal Reserve's most recent Financial Stability Report addressed what many industry watchers had been convinced of for some time: the commercial real estate sector is in a precarious state. The Federal Reserve Bank...more
Alabama joined approximately 20 others states this year by enacting the Qualified Dispositions in Trust Act. At its core, the Act allows individuals to enjoy asset protection found in trusts without many of the stringent...more
From 1 January 2022, a new French law will impose annual notification requirements on lenders benefiting from a limited recourse security interest from a French guarantor. Failure to comply may result in French law limited...more
In a prior practice pointer, we discussed the importance of reservation of rights letters. However, there are times when a lender will want to start enforcing one or more rights or remedies....more
This article is the second in a series looking at how to address some of the issues affecting trade finance documentation and transactions in the current climate. The first article in this series analysed some of the...more
Many commercial real estate loans are “non-recourse,” which means in general terms that foreclosing on the real estate securing the loan is the lender’s sole remedy for a borrower’s failure to repay the loan. The lender is...more
In my last post, “Real Estate Alphabet Soup: F is for Foreclosure” I continued my primer on the “alphabet soup” of real estate. This post continues to stir the “alphabet soup” with the letter “G.”...more
Underwriting a commercial credit facility is a process of weighing various risk mitigators until the lender is satisfied that the potential for loss is within its tolerance. By evaluating collateral value, credit history,...more
When a family business borrows money, the lender often requires some or all of the business owners to guarantee the loan. If one of the business owner guarantors pays on the guaranty, that guarantor is entitled to...more
Below is an overview of the key terms and provisions in intercreditor/subordination agreements governing the relationship between a senior secured lender (the “Senior Lender”) and a mezzanine lender (the “Mezz Lender”)....more
Don’t Take It Lightly- Regardless of who or what they are, taxpayers have to be careful of saying things like, “I guarantee it” or “it’s guaranteed.” First of all, they’re not Joe Namath guaranteeing a Jets victory over...more
Guarantors of loans occupy a vulnerable position under California law. While direct borrowers often benefit from California’s robust statutory anti-deficiency framework, those protections are often unavailable for...more
It has been said that a guarantor is a fool with a pen. Even the Bible warns, "whoever puts up security for a stranger will surely suffer, but whoever refuses to shake hands in pledge is safe." Proverbs 11:15, NIV. That...more
The California Court of Appeal decision in LSREF2 Clover Property 4, LLC v. Festival Retail Fund 1, LP (2016) 3 Cal.App.5th 1067, struck another blow to California’s “sham guaranty” defense – highlighting a recent string of...more
On April 17, 2017, the Supreme Court of Georgia found that defendant guarantors had waived the statutory protections under the Georgia foreclosure confirmation statute, and the lender could pursue a deficiency judgment...more
Recently, J. Crew used a “back-door” provision in its credit facility to transfer approximately $250 million worth of intellectual property (“IP”) to an unrestricted subsidiary with the aim of borrowing against the...more
I. OVERVIEW - A recently released legal memorandum by the Internal Revenue Service (IRS) Office of Chief Counsel, CCA 201606027 (the “Memorandum”), concluded that a so-called “bad boy guarantee” provided by a sponsor of...more
In a decision issued on February 22, 2016, the Supreme Court of Georgia ruled that a guarantor can waive by contract the requirement for a lender to obtain confirmation of a foreclosure sale before pursuing the guarantor for...more
Believe it or not, lenders can breach loan agreements too…and when they do, there can be significant consequences. In Great Western Bank v. LJC Dev., LLC, 726 Ariz. Adv. Rep. 21 (Ariz. Ct. App. Nov. 10, 2015), the Court of...more
So, What can a Lender Count on from a Guarantor? - In 1933, the North Carolina legislature in reaction to the Great Depression enacted certain defenses against alleged abuses by lenders exercising remedies under...more
The North Carolina Supreme Court recently handed down the final word in a dispute over whether guarantors get the benefit of the state’s anti-deficiency statute after the lender bids on and buys the real property at a...more
In This Issue: - Another Perspective - James C. Cherry, Chief Executive Officer, Park Sterling Bank: With more than three decades of experience in banking in North Carolina and Virginia, Park Sterling's CEO James C....more