Distressed Real Estate

The Haynes and Boone Distressed Real Estate Practice Group brings together the strength of the firm’s restructuring and real estate practices. Different than standard firm practice, Haynes and Boone maintains an ongoing practice group which combines the experience of our restructuring and real estate professionals into a seamless group focused on restructuring, workouts and acquisitions involving distressed real estate assets.

The firm is ranked as a leading United States bankruptcy firm according to the 2016 issue of Chambers USA, Chambers & Partners. Haynes and Boone bankruptcy and real estate lawyers have also been recognized by Best Lawyers® in America 2017, published by Woodward/White, Inc.

By combining the two groups, clients have the benefit of experienced lawyers who restructure distressed assets out of court in complicated loan structures and regularly litigate contested matters in bankruptcy court. Real-world understanding of the bankruptcy court and the application and interpretation of the Bankruptcy Code is vital to anyone seeking to understand their options in a restructuring.

We regularly provide counsel to borrowers, private equity sponsors, special servicers, lenders to distressed borrowers, and purchasers of real estate assets and of distressed debt. Our professionals have actively represented clients throughout multiple real estate cycles.

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Representative Experience

  • Representation of Midland Loan Services as special servicer for the largest of Innkeepers secured creditors (two CMBS trusts) holding debt of more than $825 million. Successfully opposed a bid by Innkeepers USA Trust to enter into a plan support agreement regarding a debt-for-equity swap with Lehman Brothers Holdings Inc.'s subsidiary, Lehman ALI, Inc. and Apollo Investment Corporation.  Overall, the Innkeepers bankruptcy cases involved 92 jointly-administered debtor cases that owned 72 hotels throughout the United States. Forty-five of the 72 hotels secured Midland's indebtedness.
  • Representation of an affiliate of The Related Companies as acquirer of luxury One Madison condominium project in New York in the chapter 11 case of FKF Madison Group Owner LLC. Secured debt alone totaled approximately $250 million.
  • Representation of an affiliate of The Related Companies as acquirer of the Chicago Spire real estate development in Chicago.
  • Representation of Five Mile Capital in connection with the restructuring of the financing of the former New York Times building located on West 43rd Street in New York, New York owned by Africa Israel.
  • Representation of second lien agent and certain second lien (junior) lenders in the FX Luxury Las Vegas I, LLC bankruptcy case in the Las Vegas, Nevada bankruptcy court. Successfully obtained ownership for the firm's clients of a seventeen-acre property located on the Las Vegas strip across from City Center.
  • Representation of Five Mile Capital, in its capacity as a member of the Starwood consortium, in connection with the Starwood consortium's bid to acquire Extended Stay and certain of its affiliates, owners of extended stay hotels.
  • Representation of subsidiary of Prudential Real Estate Investments in the restructuring and extension of an approximately $22 million mezzanine loan.
  • Representation of Five Mile Capital as a pre-petition lender and DIP lender in connection with the Crescent Resources bankruptcy cases. Negotiated and structured the sale of client's pre-petition claim and its successful exit from the bankruptcy cases.
  • Representation of Five Mile Capital in acquisition of Ritz-Carlton Grand Cayman following acquisition of three tranches of first mortgage debt and subsequent foreclosure process in Cayman Islands.
  • Represented a national homebuilder in the restructuring of $1.1 billion in bank debt, including revolving debt and two tranches of term debt.
  • Represented a hotel owner/borrower in the restructuring of a $20 million secured debt facility.
  • Represented client in the negotiation and drafting of a $70 million settlement of collateralized indebtedness owed by certain real estate developers in connection with multiple development projects involving deed in lieu transactions, coupled with ongoing operating agreements and management arrangements with certain of the developers.
  • Represented Lincoln Properties, Vantage Properties, and Trammell Crow in connection with the restructuring of the companies.
  • Represented Five Mile Capital in the sale of the John Hancock Tower to Boston Properties. Total aggregate value of the deal is $930 million.
  • Represented a large real estate fund and its joint venture partner in connection with the restructuring of an approximately $73.5 million mortgage loan secured by property located in California.
  • Represented Hillwood Development Company, LLC in the bankruptcy of the 2,675-acre master planned community Park Highlands. 
  • Represented Crédit Agricole Corporate and Investment Bank in the chapter 11 bankruptcy of stalled master-planned community, South Edge.
  • Represented lenders and borrowers in various deed-in-lieu of foreclosure transactions.

Bankruptcy

courthouse

The Best Offense is a Good Defense

Lenders invest significant time and effort structuring loans to prevent a borrower from filing for bankruptcy. For example, lenders will sometimes require the borrower’s principal to execute a “bad boy guaranty” (which can make the principal personally liable to the lender for damages up to the entire unpaid amount of the loan in the event of a bankruptcy filing) or that the lender hold a “Golden Share” (which is a non-economic voting interest in the borrower who then cannot file for bankruptcy without the lender’s affirmative consent).

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