Banking & Finance

Practice Area

Banking & Finance

Lewis Brisbois' loan workout team is part of the firm's Real Estate Practice. The team is headed by Peter F. Harris who has 30 years of experience representing financial institutions, state and federal regulators of financial institutions, nontraditional lenders, and borrowers in restructuring distressed commercial real estate loans and in the enforcement of the rights of creditors within and outside of bankruptcy. Mr. Harris was formally in-house counsel for a financial institution and staff counsel for a federal regulator of financial situations, and is currently outside counsel for a financial institution and other lenders, and approved outside counsel for the Federal Deposit Insurance Corporation.

Today's troubled real estate markets and the ongoing crisis in the banking industry, including the bank bailouts and the ever increasing foreclosure rates, are a reminder of the savings-and-loan crisis of the early '90s. Our group has relevant experience stretching back to the savings-and-loan crisis and forward to the challenges of today. What is needed to adapt to and overcome such challenges is experience and creativity, and that is exactly what our workout team offers to our clients.

Financial institutions today are saddled with nonperforming loans secured by commercial real estate projects beset by depreciated collateral values, diminished operating cash flows, and prolonged sales and rental absorption rates. The traditional remedy of foreclosure may be deemed inadequate where there is little market for a sale at an adequate purchase price or for the leasing of retail and office space to creditworthy tenants, and where the real estate owned portfolio may already be bursting at the seams. In such a situation a prudent loan workout is often in the best interest of the financial institution and the borrower.

The risk management practices of the financial institution for restructuring commercial real estate loans should be appropriate for the complexity and nature of such challenges, and should be consistent with safe and sound lending practices and regulatory requirements. The attorneys on our workout team can help you develop and implement successful risk management practices designed to appropriately restructure distressed commercial real estate loans.

Our attorneys have the necessary experience and creativity to assist you in establishing a prudent workout policy with appropriate loan terms and amortization schedules designed to permit the institution to modify a distressed loan in compliance with sound lending practices and applicable regulations. A well conceived workout plan for a loan analyzes the current financial information on the borrower and/or guarantors to determine whether or not a workout will ultimately lead to the collection of principal and interest. The key elements of a prudent workout policy include proper documentation including pre-negotiation agreements and loan modification agreements, collateral administration to ensure proper lien perfection, adherence to statutory and regulatory lending limits, updated and comprehensive financial information on the borrower and on the real estate project and any guarantor, current appraisals of the collateral supporting the loan, and analysis and determination of an appropriate workout structure including re-margining requirements and covenants releasing lender from any liability for past conduct.

Where it is determined that a workout would not be appropriate under the circumstances, our attorneys are available to advise you and to represent you with regard to judicial and non-judicial foreclosure actions, enforcement of guarantees, and creditors rights in bankruptcy. Our attorneys have deep experience with the complexities of California's one action rule and anti-deficiency statutes, as well as relief from the automatic stay under the federal bankruptcy code. Our trial attorneys have collectively tried hundreds of cases and continue to try cases regularly. Our reputation for trying cases successfully often helps clients resolve matters short of trial by means of negotiated settlements or arbitration or mediation. We also have experience in seeking early dispute resolution through provisional remedies such as injunctions, attachments and receiverships.

Chair

Vice Chairs