Haynes and Boone's Newsroom

Think Real Estate, March 2012
03/28/2012
Matthew R. Schindel, Walter Schleimer, Lawrence Mittman, Noah Shapiro

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What Others Say

"This firm knows us, our expectations and what will or won't work for us."
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2011 Chambers USA

March 2012

Welcome to Think Real Estate, the real estate newsletter of Haynes and Boone, LLP, a resource for timely legal analysis of issues affecting the real estate industry. Our real estate lawyers represent clients in areas critical to the real estate industry and are engaged in every facet of buying, selling, developing, operating, leasing, capitalizing and financing real estate for operators, investors and users for both U.S. and international entities. For more information about our people and capabilities, visit our Real Estate Practice Group page.

Matthew Schindel and Walter Schleimer
Co-Chairs of the Real Estate Practice Group

Can Secured Creditors Credit Bid in Chapter 11 Plans? Supreme Court to Decide

John D. Penn Lawrence Mittman

The Issue

The issue is whether a Chapter 11 plan can be crammed down over the secured lender's objection where the plan provides for the sale or transfer of the secured lender's collateral with the proceeds going to the secured without the secured lender having the right to credit bid for its collateral up to the full amount of its claim.

The answer to this critical question is split among the Circuit Courts of Appeal that most recently considered the issue. Two Circuit Courts, including the one that hears appeals from the popular Delaware Bankruptcy Court, have denied secured lenders the right to credit bid when their borrowers-debtors' proposed to sell or transfer real estate as part and parcel of their chapter 11 plans and force the secured lender to take the proceeds of sale as the " indubitable equivalent" of its claim. One Circuit Court, more recently, however, recognized the secured lender's right to always be able to credit bid in a plan context involving the sale or transfer of its collateral.

The Supreme Court decided to step in and resolve this split among the Circuits in an appeal due to be decided in 2012. Read more.

Recent Representative Experience

Represented Natixis Real Estate Capital in the financing of the renovation of the Hotel Chelsea, an iconic hotel located in New York City.

Represented SL Green Realty Corp., the landlord, in a 340,000 square foot headquarters lease to Young & Rubicam Group at 3 Columbus Circle in Manhattan.

Represented Parmenter Realty Partners in the purchase of Brookhollow Central, a three-building class A office asset totaling 806,004 square feet, located in Houston, Texas.

Represented Hillwood in the formation of a joint venture with Brookfield Asset Management, to acquire and develop industrial properties. With an equity commitment of $400 million, the partnership is expected to deploy up to $1 billion within the first three years.

Represented a major international real estate fund in the formation of joint venture to acquire portfolio of multi-family properties located throughout the Southwest.

Attorney Spotlight

Noah Shapiro

Noah Shapiro is a partner in the firm's Real Estate Practice Group in New York and devotes his professional time to commercial real estate leasing transactions. Shapiro has extensive experience in office, retail and ground leasing of mostly Class A properties and is involved in all aspects of the leasing process (including negotiating leases, consulting with clients on term sheets or letters of intent and negotiating brokerage or agency agreements). He is routinely involved in several of the largest leasing transactions that take place each year in New York City, representing major landlords such as SL Green Realty Corp., L&L Holding Company and Brookfield Financial Properties, and major tenants such as Cushman & Wakefield. Shapiro received his bachelor's degree from Hofstra University and juris doctorate from the Fordham University School of Law.

Noah Shapiro
Partner
212.918.8991

For more information please contact any lawyer in the Real Estate Practice Group.

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