Real Estate: Repair Agent Special Advisory Services Service Sheet – Insolvency/Bankruptcy

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Special Servicers face multiple challenges, including changing market conditions, investigative and forensic issues, borrower liquidity constraints and bankruptcies, service agreement disputes, “war of tranches” and a host of other issues associated with commercial and residential mortgage-backed securities (CMBS and RMBS).

The highly experienced professionals at FTI Consulting are experts in handling these issues. We provide a wide range of services that can help special repairers identify and pursue strategies to maximize recovery in particularly complex or conflicting cases. Our reputation for technical excellence, thorough analysis, practical objectivity and negotiation expertise are all critically important to our clients’ success.

A sample of our services

  • Financial advice and expert testimony

  • Training strategy and negotiations

  • Bankruptcy Interest Rates and Plan Feasibility

  • Challenges to special service standards

  • Forensic investigations and litigation advice

  • Call options at FMV

  • Disputed valuations

  • Receivers and Interim Management

Abilities

Litigation and litigation advice
We help with every phase of the dispute resolution process, from early case assessment, pre-litigation strategy and discovery to litigation/mediation advice, expert testimony and trial. FTI Consulting helps Special Services resolve a range of CMBS counterparty disputes, including breach of representations and warranties, cascading distributions and other matters.

Restructuring and bankruptcy advice
Clients seek our expert help with liquidity assessment and cash flow analysis; bankruptcy plan negotiation, feasibility and interest rate analysis; negotiation of sale procedures and supervision of sales of assets §363; interim management services, including escrow and fiduciary services; and buying and selling services related to REO and distressed debt interest.

Forensic investigations and analyzes
FTI Consulting provides specialist services to address a range of challenges, including embezzlement and diversion, regulatory investigations and fraud claims.

Assessment Services
FTI Consulting’s valuation experts have extensive experience providing collateral valuation opinions, equity and solvency opinions, strategic advice and transaction support, and transaction support and services. disputes.

Fiduciary and Transition Management
FTI Consulting provides industry-leading fiduciary and interim management services in complex circumstances that require trusted and experienced professionals to serve as independent custodians of real estate and other assets. We work all over the United States and internationally.

Highlights: success stories selected by customers

Litigation and litigation advice
In 2015, the iconic Peter Cooper Village/Stuyvesant Town, a sprawling 11,250-unit residential development in New York City, was sold on behalf of the CMBS Trust, which had obtained title to it in a highly contested foreclosure action. publicized. Certain certificate holders challenged the distribution of more than $600 million of the $5.3 billion in total sale proceeds for default interest paid to the special manager, arguing that the distribution constituted what the t is called the proceeds of the “gain on sale”, which should have been distributed for the benefit of the certificate holders. A team from FTI Consulting prepared an expert report and provided deposition and trial testimony in support of the Special Fixer, which was critical to the District Court’s decision in favor of the Special Fixer.

Bankruptcy and restructuring
A team from FTI Consulting has been retained by the Special Service in connection with a $1 billion CMBS debt following the portfolio owner’s bankruptcy filing. FTI Consulting experts advised the client during the extensive negotiations of the cash collateral order and the sizing and approval of the DIP loan. We analyzed portfolio financial and operating performance and cash flows, provided information on debtor projections and budgets, and advised on reorganization and asset sale efforts. The debt has been repaid in full, with post-request interest.

Bankruptcy testimony regarding default interest
FTI Consulting professionals have prepared an expert report regarding the economic justification and reasonableness of the lender’s request for default interest. The lender’s claim was secured by a mixed-use shopping center in California. The bankruptcy court ruled in favor of the lender and issued a written opinion with frequent references to the FTI Consulting team’s expert report.

Alleged violation of the PSA
A team from FTI Consulting has been retained by the Special Agent for the $3 billion CMBS loan associated with the Atlantis Casino Hotel in Paradise Island, Bahamas, to provide the analysis and advisory services for litigation related loan modifications that had been approved by the special agent. and subsequently challenged by some certificate holders.

Lockbox Forensics and Compliance
When Innkeepers USA filed for Chapter 11 bankruptcy, a team of professionals from FTI Consulting was retained by the Special Fixer for the benefit of the CMBS Trust. Our role included forensic analysis and recovery of misappropriated cash collateral, expert testimony that led to a legal rejection of the debtors’ original restructuring proposal, which was detrimental to the Trust, multiple analyzes assessment, review of financing, sale and bankruptcy plans, ongoing analysis of the hotel portfolio and monitoring of cash. The FTI Consulting team worked closely with debtor advisors and potential bidders to maximize the value of the final §363 sale of the portfolio and recovery to the Trust.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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What we read this week [August 30, 2022]

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Judge David Jones of the Southern District of New York denied a request for a formal shareholders’ committee in Revlon’s Chapter 11 proceedings, as reported by Reuters.

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