Manatt’s recovery team is composed of professionals across the firm’s leading countercyclical practices, including bankruptcy, restructuring, distressed assets, intellectual property (IP), real estate and emerging companies. Together, our team members combine knowledge and experience gained from previous downturns to form a coordinated team to help our clients assess, address and navigate key issues surrounding bankruptcy, restructuring, refinancing and workouts across a wide variety of industries.
Success comes from pragmatic experience gained from working both sides of bankruptcy, restructuring and related litigation, and knowing what to expect from the other side. Our team uses this experience to develop creative solutions that preserve value, address problems and leave our clients stronger than before.
An economic downturn is devastating for property owners, lenders, investors and developers that do not quickly and forcefully confront issues affecting their investments. Early and decisive action is often the difference between successful asset preservation and failure. Our team uses its knowledge and deep understanding of applicable finance, real estate, restructuring, insolvency and commercial law to serve as counsel for some of the nation’s leading lenders, borrowers and investors in order to assist in the restructuring, acquisition and disposition of, and realization upon, distressed assets. We draw on decades of experience to help address and respond to obstacles confronting even the most sophisticated and complex transactions.
In economic downturns such as the present, we represent financial institutions, pension funds, commercial landlords and tenants, investors, and others with respect to analyzing their legal rights, enforcing agreements and preserving their assets. Our team has decades of experience in prior economic downturns and includes litigators, forensic accounting experts and advisors with hands-on experience in key areas such as financial services, real estate, general business and investments, which can be deployed immediately and efficiently to resolve client problems/opportunities and enforce our clients’ rights.
We bring knowledge about solutions that others have employed in these unusual economic circumstances and offer a wide range of services. For example, consulting services include advising financial institutions regarding loan modification programs and portfolio review, consulting with commercial landlords regarding enforcement of leases at a national or regional level in light of the COVID-19 pandemic, and consulting with owners and partners regarding their legal rights in business and investment disputes. If disputes cannot be resolved readily, we also offer a wide range of prelitigation and litigation services.
The treatment of IP licenses in bankruptcy differs from other types of contracts, as does the treatment of secured transactions based on IP. Subtle issues of copyright law may radically alter the course of bankruptcy proceedings, sometimes even years after the transactions were closed. Manatt’s recovery team works closely with our entertainment and IP attorneys to provide a deep understanding of both the legal issues involved and the unique practices of the entertainment industry. Bankruptcy courts, which are accustomed to more standard financial transactions, often need to be educated on this unfamiliar business.
Opportunities to make strategic asset acquisitions during an economic slowdown often arise. These opportunities may present themselves in the bankruptcy context, raising complex issues that inevitably arise in a bankruptcy sale. Or they may arise as a result of opportunities in the market to invest in and/or acquire distressed assets and companies, including new and emerging companies. Our recovery professionals offer significant experience in restructurings, workouts and bankruptcy sales and can help clients navigate the unfamiliar and often complex requirements to achieve a successful and unchallengeable acquisition.
Who We Work With
- Banks, investment banks, funds (including mortgage, private equity and hedge funds), institutional lenders, and other debt and equity investors
- Bondholders, bondholder indenture trustees and bondholder committees
- Chapter 7 and Chapter 11 creditors
- Industrial and manufacturing companies
- Real estate developers, investors, owners, tenants and operators, in all asset classes
- Hotel owners and operators
- Multifamily developers, investors and owners
- Media and entertainment companies
- Retailers and shopping centers
- Small business lenders
- Fund management firms, including hedge funds, money managers and venture funds
A selection of our most notable experience includes:
- Lenders
- Amendment and restatement of a $171 million syndicated, asset-based credit transaction.
- Sale of a residential development loan portfolio at a high-water mark for the seller, with subsequent portfolio dispositions selling at greater discounts. We closed the transaction in 30 days and acted as financial and strategic advisor in structuring the sale, in addition to our normal legal role.
- Sale of a portfolio of nonperforming loans secured by commercial properties in California and other Western states to a New York investment bank for more than $100 million. The distressed asset sale was a key element of our client’s plan to restructure its balance sheet in a challenging regulatory and financial environment.
- Sale of a portfolio of 16 nonperforming loans secured by residential real estate located in California and other Western states. The sale was conducted through an auction involving a limited number of prequalified buyers, yielding the seller’s best return on its portfolio sales.
- Restructuring a land development loan secured by residential lots and a golf course in Arizona. Our client was part of a syndicate of lenders holding notes totaling $90 million. As part of the restructuring, we obtained releases of personal guarantees and a general release of the syndicate lenders. After the borrower was recapitalized by a new investor, the borrower bought back the original notes at discount.
- Workout and resolution of substantially all of Citicorp’s California and Western states distressed mortgage portfolio.
- Regulatory and workout issues related to a loan to St. Vincent Hospital when the hospital was going through a financial crisis.
- Litigation, receivership and sale of a portfolio of 11 low-income housing properties after fraud perpetrated by the developer. Our team guided the client through the myriad complex insolvency, real estate, tax, regulatory and receivership issues, and successfully closed the sale of all 11 properties.
- A large tax credit fund in negotiations to restructure debt and preserve tax benefits. We dealt with several parties to sophisticated partnership agreements.
- A major investment bank in its acquisition of several billion dollars’ worth of mortgage loans and real estate owned properties located around the world. Our team evaluated over 300 loan and REO assets—more than 500 properties in just four weeks—handling title, documentation, bankruptcy, transfer restriction and other matters. Negotiations and due diligence proceeded simultaneously, and the closing required the negotiation and execution of thousands of documents. The entire transaction was successfully concluded in only four months.
- One of Los Angeles’ largest venture funds in the acquisition of a loan with a face value of $43 million. Manatt’s representation included substantial due diligence on the collateral property, the loan and its documentation, the bidding strategy, and the negotiation of the loan purchase, and advice regarding bankruptcy, foreclosure and lender liability issues.
- A real estate investment firm and its affiliates in the restructuring of a $330 million construction loan secured by a condominium hotel resort on the California coastline. We had previously represented the investment firm as the developer in obtaining the construction loan from a bank later seized by the Federal Deposit Insurance Corporation. We worked with the FDIC to extend and modify the construction loan, and after the agency sold the Corus assets to an investor group, we worked with the investor group to restructure the outstanding construction loan and a mezzanine loan.
- A residential mortgage loan company in the workout of troubled assets in its loan and REO portfolios, including the disposition of numerous properties and the sale of loans, many of which were secured by real estate assets located in a number of Western states or were part of a master loan facility covering multiple projects in various stages of development.
- A real estate developer in the acquisition of a distressed loan secured by a lien on a large retail development site. We then represented our client in foreclosing on the underlying real property collateral and defending against claims asserted by the borrower’s principal.
- Sellers and buyers of portfolios of distressed mortgage loans and loan portfolios in more than 65 transactions aggregating over $5 billion. Loan sellers included Bank of America, Wells Fargo, Central Pacific Bank, Sumitomo Bank of California and Wilshire Savings & Loan. Loan purchasers included Lehman Brothers, Wells Fargo and Morgan Stanley. Most acquisitions were followed by representation of the acquirer in the resolution of the acquired portfolio.
- A commercial bank in a “friends and family” program to restructure its defaulted loan portfolio with its existing borrowers. This significantly minimized discount to the lender compared with selling the loans in a typical distressed asset portfolio transaction.