Foreclosure, Mezzanine Lenders

New York Appellate Division Dismisses Junior Mezz Lender’s Claims for Fraudulent Inducement and Fraudulent Concealment, Allows...

King & Spalding on 5/3/2024

On January 18, 2024, New York’s Appellate Division rejected a junior mezzanine lender’s contention that it was fraudulently induced to amend the parties’ intercreditor agreement, because it failed to identify specific...more

Hotel Mortgage Holder Barred from Converting Mortgage Loan In Part to Mezzanine Loan

Morrison & Foerster LLP on 12/22/2023

In a case litigated in the New York Supreme Court, the Court recently ruled that a private equity firm that acquired a mortgage loan made on the Maxwell Hotel in New York does not have the authority necessary to convert...more

UCC Foreclosure Basics: Acquisition of Distressed Real Estate Mezzanine Debt

Pillsbury - Gravel2Gavel Construction & Real... on 11/21/2022

We recently provided an outline of items to diligence when purchasing a mortgage loan in distress—and separately also discussed issues to diligence when purchasing a mezzanine loan in distress. This post (the third in this...more

Further Developments in Mezzanine Foreclosures

Cadwalader, Wickersham & Taft LLP on 4/27/2022

The New York State Supreme Court, New York County Commercial Division (the “Court”) decided in U.S. Bank, N.A. v. 342 Property LLC, on February 14, 2022, that a mezzanine lender that is not a party to loan documents that...more

Going Green - February 2022 - Further Developments in Mezzanine Foreclosures

Cadwalader, Wickersham & Taft LLP on 2/28/2022

The New York State Supreme Court, County of New York (the “Court”) decided in Atlas Brookview Mezzanine LLC v. DB Brookview LLC, on November 18, 2021, that an accommodation pledge entered into in connection with a mortgage...more

The ESG Factor, January 2022 - One of These Things Is Not Like the Other: New York State Court Upholds Commercial Reasonableness...

Cadwalader, Wickersham & Taft LLP on 2/1/2022

On November 10, 2021, the owner of the State Street Financial Center in Boston, Massachusetts defaulted on its debt, consisting of a mortgage loan in the amount of $535,000,000 and three mezzanine loans in the aggregate...more

Something Special, April 2021 | Issue No. 23 - Don’t Be Cruel: Appellate Division Upholds Waiver of Fiduciary Duties But Denies...

Cadwalader, Wickersham & Taft LLP on 4/30/2021

Can contracting parties waive all common law fiduciary duties? That was one of the questions presented to the New York Supreme Court, Appellate Division, First Department (the “Court”) in 111 West 57th Investment LLC, on...more

Courts: A Foreclosure Pandemic Pause? (Part 3)

Morrison & Foerster LLP on 3/23/2021

Since the start of the COVID-19 pandemic, borrowers and lenders alike have sought clarity regarding the permissibility of UCC foreclosure sales in the midst of the ongoing pandemic and the resulting economic fallout, as...more

New York Commercial Reasonability Standards in UCC Mezzanine Foreclosure Sales During COVID-19

Cozen O'Connor on 1/20/2021

The COVID-19 pandemic has brought with it a host of novel legal issues, and just as nature abhors a vacuum, the legal profession abhors a lack of precedent. A case in point relates to mezzanine loan foreclosure sales under...more

Issues To Consider On The Path Forward For The Hospitality Industry

Goodwin on 11/24/2020

It is hard to pick any event or series of events that has adversely impacted the hospitality industry as hard as the COVID-19 pandemic. While the summer witnessed increased RevPAR in the U.S. as compared to the depths of...more

Distressed Real Estate During COVID-19: Mezzanine Loans Behind Construction Loans—Special Considerations and Intercreditor...

Pillsbury Winthrop Shaw Pittman LLP on 10/27/2020

Construction loans with companion mezzanine loans raise a host of concerns that are unique to more standard ICAs between a mortgage lender and a mezzanine lender. An intercreditor agreement (ICA) involving a construction...more

Distressed Real Estate During COVID-19: The Role of Intercreditor Agreements between Mortgage Lenders and Mezzanine Lenders

Pillsbury Winthrop Shaw Pittman LLP on 10/20/2020

Mortgage lenders and mezzanine lenders considering amendments to loan documents, forbearance, loan transfers, the exercise of remedies or deeds in lieu of foreclosure, and other loan-related fact patterns will need to revisit...more

Distressed Real Estate During COVID-19: Court Finds UCC Foreclosure “Commercially Unreasonable” Because of Coronavirus-Related...

Pillsbury Winthrop Shaw Pittman LLP on 8/24/2020

A recent court decision in New York found that current market conditions in the real estate market justify delaying noticing mezzanine real estate foreclosures until October 15, 2020. A recent New York Supreme Court Order...more

New York State Supreme Court Temporarily Halts UCC Foreclosure of Mezzanine Loan

Cadwalader, Wickersham & Taft LLP on 8/21/2020

On August 3, 2020, in Shelbourne BRF LLC, Shelbourne 677 LLC v. SR 677 BWAY LLC, the Supreme Court of the State of New York (the “Court”) granted the borrower plaintiffs’ motion for a preliminary injunction and prohibited the...more

Courts: A Foreclosure Pandemic Pause? (Part 2)

Morrison & Foerster LLP on 8/19/2020

As borrowers continue to experience financial distress and loans go into default as a result of the ongoing coronavirus pandemic and related issues, lenders are now becoming more focused on the need to take a closer look at...more

New York Court Temporarily Enjoins UCC Foreclosure Sale

White and Williams LLP on 8/17/2020

New York courts have become a battleground for challenges to foreclosure sales under the Uniform Commercial Code (UCC) amidst the COVID-19 pandemic. Another trial court of the New York State Supreme Court (New York County)...more

Distressed Real Estate During the COVID-19 Pandemic: Deeds in Lieu of Foreclosure Involving Commercial Real Estate

Pillsbury Winthrop Shaw Pittman LLP on 8/13/2020

In a deed in lieu of foreclosure, a defaulting borrower agrees to convey the mortgaged property to the mortgage lender. But handing over the keys can raise a number of potential pitfalls. Below, we discuss some of these...more

DRANO Revisited: Further Updates on the Doctrine of Clogging the Equity of Redemption

Cadwalader, Wickersham & Taft LLP on 7/17/2020

On June 2, 2020, in HH Mark Twain LP v. Acres Capital Servicing LLC, the Supreme Court of the State of New York (the “Court”) denied the defendant’s motion to dismiss the plaintiff’s “clogging” claim, thereby providing a...more

NY Court Blocks Mezzanine Lender’s UCC Foreclosure Sale in Light of COVID-19 Pandemic

Troutman Pepper on 7/9/2020

On June 23, the New York County Supreme Court issued a rare preliminary injunction temporarily halting a mezzanine lender’s UCC foreclosure sale of the Mark Hotel in New York City because the procedures for the foreclosure...more

Distressed Real Estate During COVID-19: New York State Court Order Finds UCC Foreclosures Are Not Suspended by New York E.O....

Pillsbury Winthrop Shaw Pittman LLP on 5/26/2020

A recent court order found that a mezzanine lender may conduct a UCC foreclosure sale despite a temporary suspension of judicial foreclosures in New York State. A recent court order interpreting the scope of New York...more

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