Distressed Property

The Distressed Property attorneys at Robinson, Biggs, Ingram, Solop & Farris draw on extensive experience handling all aspects and a broad range of development projects, financing facilities and dispute resolution/litigation to bring realistic perspectives and practical solutions to the table when projects become distressed. From the earliest signs of trouble to the complications of default and bankruptcy, we provide practical, proactive and innovative solutions to maximize recovery and minimize loss and risk.

Our attorneys regularly teach and participate in state, regional and national seminars relating to distressed properties involving commercial real estate projects. Our firm is or has been an active member of leading trade organizations including:

• The Mississippi Association of Mortgage Banker
• The Mississippi Bankers Association
• The International Council of Shopping Centers
• The Mississippi Association of REALTORS®
• The National Association of REALTORS®
• CoreNet
• The Mississippi Hotel and Motel Association
• The Jackson Area Homebuilders Association
• The Homebuilders Association of Mississippi
• The National Homebuilders Association

Specific Areas of Practice

Workout

Drawing on our extensive experience in real estate development and transactions, our Distressed Property attorneys are uniquely qualified to assist clients caught in the throws of a real estate-based deal gone bad. Tough economic times have caused default rates to escalate, catching lenders, borrowers, vendors and lien-holders unprepared and overwhelmed.

Lenders dealing with anticipated or active defaults retain us to handle all aspects of distressed loan scenarios, including:

• risk aversion during the construction phase
• pre-default discussions and negotiations
• risk assessment
• asset assessment
• document and data inventory, collection and assessment
• pre-workout negotiations and agreements
• due diligence during negotiations
• assessment of ongoing development projects, title and claims and priority of other lien-holders
• identification and analysis of specific workout alternatives and options
• negotiations with borrowers and borrower counsel
• interim protections and rights following default
• forbearance agreements
• deeds in lieu of foreclosure
• foreclosure
• establishment of deficiency
• collection of deficiency
• collection involving guarantors and other income sources
• bankruptcy of borrower and/or guarantors
• bankruptcy of borrower’s tenant(s)
• receiverships
• borrower waste
• defense of lender from allegations of lack of supervision
• defense of lender from allegations of excessive control of borrower

Our firm may serve as outside counsel to a Lender’s counsel, or a Lender may contract with our firm to take primary responsibility for the entire workout negotiation, or any portion thereof. For some Lenders -- particular those without inside counsel or with inside counsel lacking workout experience -- we step in to fully handle distressed property or other workout-eligible scenarios, providing a seamless link from mortgage officer to workout group. Depending on the client’s preferences, we can work a case up, collect and assess data and documents, present alternatives and options, and pursue the Lender’s objectives through to completion, all as if we were the Lender’s “workout department” but without burdening the Lender’s limited resources of space and personnel.

Owners and Landlords look to our attorneys to guide them through the unfamiliar and highly adversarial scenario thrust upon them by a possible or actual default on their obligations to a lender or by a tenant’s possible or actual default in its obligations to them. In each case, we assess our client’s unique position and walk them through the multi-faceted challenges that confront them daily and over the long term. We address the full scope of issues an owner or landlord may encounter in dealing with their lender, including:

• pre-default discussions and negotiations
• document and data inventory, collection, assessment and production
• pre-workout negotiations and agreements
• due diligence during negotiations
• assessment of ongoing development projects, title and claims and priority of other lien-holders
• identification and analysis of specific workout alternatives and options
• negotiations with lenders and lender counsel
• rights following default
• forbearance agreements
• deeds in lieu of foreclosure
• foreclosure
• lender’s pursuit of deficiency
• lender’s attempts to collect deficiency
• lender’s actions involving guarantors and other income sources
• bankruptcy of borrower and/or guarantors
• bankruptcy of tenant(s)
• insolvency
• receiverships
• avoiding and defense of claims of waste
• lack of supervision by lender
• excessive control of borrower by lender

Tenants in trouble seek our assistance in dealing with lenders, as well as landlords, vendors, co-tenants and third-parties. From proactive review of leases, operating and reciprocal easement agreements, exclusives and prohibitions, restrictive covenants and cross-access easements to assess potential liability, to active representation during the course of a dispute or ensuing legal action, we provide thorough and effective counsel.

Foreclosure/Deed in Lieu of Foreclosure

Our real estate attorneys have decades of experience in handling foreclosures and collection of deficiencies. We have successfully conducted hundreds of power of sale and judicial foreclosures from start to finish involving all kinds of property. We assist clients with pre-foreclosure due diligence, assessment of existing liens and judgments, third-party claims and other issues unique to a foreclosure target. Following foreclosure, we assist Lenders in establishing deficiencies, defending against allegations of mismanagement or abuse of the debtor, securing and collection of judgments.

We assist Lenders in identifying proper cases for consideration of deeds in lieu of foreclosure and performing due diligence necessary to make a decision most advantageous to the Lender. We identify and quantify advantages and risks to the Lender including, through strategic partnerships, re-sale or re-leasing considerations unique to a property or the market in which it is located. If necessary, we can defend a Lender’s actions when questioned or challenged by competing, subordinate or junior lien-holders or other creditors. We assist Lenders in factoring in special circumstances, such as executory contracts, existing leases, ongoing operations, incomplete development, pending lawsuits or threats of lawsuits, regulatory issues and provisions of federal or state law covering certain loan, such as VA or FHA loans.

Bankruptcy

Today’s economic climate has forced Lenders, Owners, Landlords and Tenants to appreciate the risks, benefits and practical aspects associated with bankruptcy. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed several longstanding aspects of the bankruptcy code, and realigned the traditional balance of rights between debtors and creditors.

Resort to the bankruptcy courts by any party dramatically changes the landscape for lenders, owners, landlords and tenants. We regularly counsel lenders, owners, landlords and tenants holding a creditor position, helping them to navigate the tedious and time-sensitive demands placed upon them in the context of bankruptcy or a threat of bankruptcy. In this context, we assist clients with:

• anticipatory drafting of leases and documents and other strategies to minimize the effect of bankruptcy
• evaluating particular scenarios and parties for the likelihood of bankruptcy
• positioning themselves for a possible bankruptcy
• evaluation of alternatives to bankruptcy
• understanding the bankruptcy process and timelines
• dealing with leases and executory contracts involved in bankruptcy
• rights to possession, receivers and rents after default, including rights in bankruptcy
• preparing and filing proofs of claims
• examining debtors and obtaining data and documentation
• monitoring ongoing bankruptcy cases through completion
• motions to lift the automatic stay of bankruptcy
• jurisdictional differences among bankruptcy courts

We have successfully represented clients in bankruptcy courts including the United States Bankruptcy Court for the State of Delaware (pro hac vicie), home to some of the country’s largest retailer bankruptcies.

Through we focus our representation on creditors or trustees and do not represent debtors in bankruptcy as a rule, through strategic partnerships we assist clients who must consider bankruptcy as an option, including the identification and selection of qualified debtor counsel when necessary.

Due Diligence and Project Assessment

Our Commercial Real Estate and Development attorneys bring a wealth of practical experience to the Distressed Property team, whether the troubled project be a power center, a lifestyle center or a regional shopping mall. Using this experience and training, we can assess any project to identify and quantify status and challenges, incomplete and problem areas needing to be addressed, key players in effecting solutions and options for preserving and maximizing project assets and collateral and minimization of risk and loss.

We counsel national and local developers in assessing and choosing options when a center encounters a problem, whether it entails a tenant default, loss of an anchor, a threatened or unexpected bankruptcy, a financing crisis, a violation of an exclusive or prohibition or other breach of contract, a collection issue or sale of assets in a difficult market. Having worked in all phases of a project’s life, including acquisition, sale, title examination/insurance and curative matters, due diligence, permitting, zoning, entitlements, Tax Increment Financing, Public Improvement Districts, construction and dispute resolution, we understand the developer’s unique perspective and use that knowledge to map out solutions that fit the situation at hand.

Joint Venture Partners, both sophisticated and novice, look to us to counsel them through the complex issues that arise when a project or partner gets off track. From interpretation of agreements to negotiation of disputes to arbitration, mediation and litigation, we provide strategic advice and workable solutions to protect their positions and further their interests.

Tenants, Anchors and Vendors from retailers to hoteliers to restaurants rely upon us to walk them through the complex myriad of issues that arise under leases, operating and reciprocal easement agreements, exclusives and prohibitions, restrictive covenants and cross-access easements. Before the relationship is formed, or when a project gets into trouble, we work to position clients so that they maximize their leverage in disputes with landlords, other tenants, competitors and governmental bodies.

National, state and local Lenders rely upon our assistance to successfully arrange and close construction or permanent financing on projects from a simple business loan to a highly complex financing package for large-scale commercial or residential development. For lenders dealing with commercial or residential properties in distress, we stand in the gap to assist them with preservation and maximization of the asset, including properties in all stages of development or incompletion, or properties involved in bankruptcy or receivership scenarios. Drawing upon our extensive development experience, we guide lenders through scenarios they have not traditionally had to handle, such as ongoing commercial ventures, development projects at any stage of development and commercial operations in some stage of distress.

Residential Development

Residential development has been big business in Mississippi, but our best markets have not escaped being undaunted by recent downward trends nationally. Our Residential Development attorneys have been involved at all levels of projects across the state, working on everything from small single-family residential projects to multi-family developments and condominiums to large-scale residential communities with the full range of amenities. In these difficult economic times, these projects present a unique set of challenges that require precise knowledge and innovative approaches. We understand residential real estate and can intervene with solutions that work when the project encounters a single obstacle or comprehensive distress.

For years, Developers have included us on their team for innovative and unique residential projects like Planned Unit Developments (‘PUD’) and cutting edge New Urban projects. We have regularly participated in the planning, research and design phases of our clients’ projects, solving land use issues, title issues, utility and easement issues, contractual issues and all issues relating to homeowner’s associations, restrictive covenants and project management. We are well equipped to handle complex multiple-lot closings, construction and disputes related to the project including use of mediation, arbitration and, when necessary, litigation. This doubly qualifies us to identify trouble spots before they develop into unmanageable issues, and to put forward innovative and proactive solutions that keep the project on tract or, in the worst cases, minimize exposure and loss.

We have regularly assisted landowners in subdivision, re-subdivision, zoning, marketing and sale of residential property, including creation of partnerships with developers or equity partners. When these projects get into trouble, we use this knowledge to bridge misunderstandings, repair relationships, restore confidence and reach amicable resolutions in disputes. When necessary, we use our extensive practical knowledge base to effectively and efficiently seek resolution of disputes through arbitration, mediation and litigation, depending on our client’s needs and preferences.

Lenders have routinely relied upon our experience with construction and permanent financing relating to residential development to make loans and re-financings close smoothly, including assistance with due diligence, risk assessment and loan underwriting. In the context of distressed properties, we are an invaluable resource to lenders facing default, bankruptcy or other forms of distress involving a borrower in the course of developing or operating a residential projects. We bridge the knowledge and experience gap for lender clients, walking them through or, as they prefer, stepping in to handle assessment of ongoing projects; deal with threatened or actual default, bankruptcy and receiverships; and analysis and pursuit of the range of options available for re-collateralization, restructuring, modification, collection and satisfaction of debt.

Homeowners are among our clients in their dealings with homeowner associations, subdivision developers, lenders, government officials and bodies, restrictive covenants and intra-owner disputes. We regularly walk clients through complex documentation associated with modern subdivision residency, but also work with clients in historic preservation districts and blighted areas to seek solutions to the unique challenges they encounter.

As sales or transfers of interest do come about, Purchasers and Sellers, as well as Lenders look to Mississippi Title Group, our residential closing group, to efficiently and cost-effectively handle residential closings, including issuance of owners’ and lender’s title insurance and the full range of escrow services. We regularly counsel clients through the complexities and pitfalls of short sales, deeds in lieu of foreclosure and other transactional alternatives, in addition to traditional closings.

Medical Facilities

We understand and appreciate that creation or expansion of a medical facility, whether a hospital, an ambulatory surgical center, a medical office building or a full-scale medical center, is a highly specialized transaction.

Our attorneys work with public and private hospitals to guide them through the multitude of special challenges they face in facility development. From the location and assessment of potential sites, to complex land negotiations, to securing of public-private partnerships (such as tax increment financing (“TIF”)) to certificate of need (“CON”) approval or amendment, to financing and project due diligence, to site development and construction, we under-gird the work of administrators and their development teams with a solid legal framework, while facilitating achievement of goals that make the project a success. When litigation is needed or encountered, such as CON appeals, regulatory proceedings or administrative hearings, our attorneys use their extensive experience and respected relationships with key decision-makers to aggressively protect our clients’ interests, whatever the forum.

Doctors and other health professionals look to us for guidance and support in structuring and operating their practices in today’s competitive and highly-regulated environment, including establishment of medical office buildings (“MOBs”), clinics and ambulatory surgical centers. Whether the issue involves the doctors’ partnership, relations between medical staff and hospital administrators, complex regulatory issues such as EMTALA, or any other issue, we take care of legal hurdles, leaving doctors to attend their patients.

Title Insurance and Curative Title Assistance

Our attorneys serve as agents or representatives for Mississippi Valley Title Insurance Company and Chicago Title Insurance Company. Our firm’s residential closing group, Mississippi Title Group, issues title policies and offers a complete list of escrow services for residential closings through our conveniently located offices in north, central and south Mississippi.

Using our experience offering the full range of title services for commercial and residential projects across Mississippi, Arkansas and the Gulf South, including title examination and abstracting, creation of accurate and useful title reports, technical analysis of documents of record and interpretive review of all matters affecting title to the property in question, coordination of site inspections and surveys and issuance of title insurance commitments and policies for owners and lenders, we offer expert Curative Title Assistance services fitting our clients’ strict timelines, facilitating successful and timely closings or resolving title issues of every kind. Whether a simple easement or a complex estate issue, title defects and unacceptable title exceptions are dealt with efficiently and in a cost-effective a manner, whether requiring a few simple phone calls or sophisticated litigation in state or federal court. Being title agents ourselves, we are well qualified to handle claims under title policies issued by companies we do not represent.

Governmental Intervention and Facilitation

Our firm regularly represents clients with special needs or projects in their dealings with local, state and federal governments. We are problem solvers, whether the issue be an administrative delay or impasse, a request for funds or special accommodation or a need for legislative action.

We regularly make use of our excellent relationships at the local, state and federal level to facilitate successful and timely resolution of challenges relating to permitting, zoning, re-zoning, special exceptions, subdivision, platting, variances, re-subdivision or re-platting and vacation of existing plats, subdivisions or streets, among others.

Ron Farris, a founding partner, draws on excellent relations with local, state and federal officials, including service as a two-term State Senator, during which time he worked on the Budget, Appropriations, Judiciary, Education, Universities & Colleges, Insurance, Highways & Transportation, Juvenile Justice, and Elections Committees; working in Washington, D.C. as a member of a congressional staff; and holding multiple leadership positions within the Mississippi Republican Party. Ron serves as General Counsel to the Mississippi Association of REALTORS® and the Statewide Association of YMCAs, and is an active member of the International Council of Shopping Centers, serving as ICSC’s State Alliance Co-Chairman for Mississippi and Alabama

Mr. Farris and George Haymans are frequent leaders of seminars in the distressed property, real estate development, land use, financing, public-private partnerships and government relations areas.

Attorneys practicing in this area:

Ronald D. Farris
Otis T. Johnson, Jr.
Stan T. Ingram
Drew Malone
George S. Haymans, IV
Travis J. Conner

Related practice areas:

Bankruptcy
Business Entities
Corporate Law / Business Transactions
Distressed Properties & Assets
Economic Development
Government Relations
Health Care
Land Use, Planning & Zoning
Oil & Gas – Energy Law & Related Administrative Hearings