Bilzin Sumberg

The global economy is experiencing challenges not seen in decades. A combination of factors - rising interest rates, untamed inflation, continuing supply chain difficulties, soaring insurance costs, and geopolitical instability, among others - have come together to create a great degree of uncertainty, but also opportunity, across financial markets, property markets, and wide swathes of industry.

As the business community grapples with economic uncertainty, financial institutions and investors will re-assess the positioning of assets, associated valuations, and the sourcing and deployment of capital for new ventures. Consequently, strategic business and legal guidance tailored to the varying challenges and circumstances will be critical for long-term success. Some firms will need to reinvent business models, restructure operations, or discover new areas where they can add value, while others will need strategies to protect existing assets from unforeseen challenges. Still others may find that they need to divest assets or consider bankruptcy.

Bilzin Sumberg can assist with recommendations for making decisions about best options for the future, whether preparing for new risks, restructuring, divesting, or acquiring assets, distressed or not, in the new economy.

The team includes lawyers from multiple disciplines with market-leading business and legal experience focused on:

• Restructuring and bankruptcy, including buying assets out of bankruptcy and defaulted loan sales and purchases
• Loan workouts, including forbearances and discounted pay-offs
• Rescue capital, including preferred equity, mezzanine loans, and bridge loans
• Mortgage and mezzanine loan foreclosures, deeds in lieu of foreclosure, and receivership sales
• REO sales for lenders
• Corporate structuring and joint venture formation, including public-private partnerships
• Alternative lending, including private equity and other opportunity funds
• Real estate, from acquisition and construction to disposition, including adaptive reuse of property
• Land use and entitlements
• Environmental issues
• Tax-efficient structuring
• Litigation and dispute resolution

“I think the game changer in the South Florida market has been the adoption of [the Uniform Commercial Real Estate Receiver] Act. The reality is that so much of our [distressed assets] activity is real estate driven, so a commercial real estate receivership act really makes a difference in our market.”
- Jeffrey Snyder

Opportunities in the New Reality:
Asset Distress and Revitalization Series
March 21

Episode 2: Foreclosures and Bankruptcy in the Age of COVID

Bilzin Sumberg attorneys Jeffrey Snyder and Jake Greenberg discuss the nuances of foreclosures and bankruptcy as the economy emerges from the coronavirus pandemic and grapples with its fallout. They cover current developments related to this area of the law, and conduct a deep dive into a case with key takeaways for both lenders and business owners.

“Now what we’ll be seeing is more people investing money in existing projects, not just land… people will start putting deals together in a different way. The concept of preferred equity will become much more prevalent this year.”
- Suzanne Amaducci

Corporate Debt: Still Growing, and Still a Concern
Financial Services Watch Blog

As the pandemic began unfolding about a year ago, we wrote about the risk that the high volume of corporate debt might make it the next market bubble to burst. The issuance of corporate debt only accelerated in 2020 compared to 2019, growing by 17% and setting a new record in volume. S&P Global Ratings has predicted that corporate debt issuance in 2021 will remain robust, decreasing by only 3% compared to a frenetic 2020 (which would still be up 14% over 2019 levels).

Click below to learn more about the implications of this continued acceleration of corporate debt issuance brought upon by the COVID-19 pandemic.

Blog Post
December 2020

Still Litigating the 2007-08 Financial Crisis: The Claims Keep Coming

It has been over a decade since the global financial crisis rocked the housing market in the U.S. The global recession began as a subprime mortgage crisis that rippled through the wider economy, and yet 12 years after it began, there remains significant residential mortgage-backed securities (RMBS) litigation pending in the courts. Phil Stein outlines these pending cases and what is at stake for the litigants and the RMBS industry.

Student Loan Debt: One of the economic consequences of COVID-19 has been increased difficulty for indebted students in paying off student loans. With the eventual lifting of the moratorium on payment obligations, and with uncertainty surrounding the new presidential administration’s agenda on student loan legislation, investors in student loan asset-backed securities (SLABS) can expect to see a rise in defaults and subsequent litigation seeking to recover losses.

Asset Distress & Revitalization Podcast Series
February 2021

Episode 1: Impending Wave of Distressed Assets & Common Types of Related Disputes

As businesses grapple with the economic fallout of the pandemic, they will require specific strategic guidance, both business and legal, depending on whether seeking to protect or acquire distressed assets. In this episode of the series, Litigation Practice Group Leader, Phil Stein, discusses the impending wave in distressed assets, types of disputes that commonly arise when an asset goes into distress, and lessons from the last recession.

Typical Litigation Issues

Mortgage-Related Disputes

CMBS-Related Distressed Assets

A tale of two markets: Some CMBS players see huge losses, others opportunity

The Real Deal

In today's economic client, foreclosures and loan modifications in the CMBS market - particularly in the hotel and retail market - are becoming more prevalent. More real estate investment firms are considering turning over properties tied to securitized commercial mortgages back to lenders, while banks and other CMBS servicers are increasingly faced with the difficult decision of foreclosing or making serious loan modifications. CMBS debt restructurings are highly complex, with a litany of problems for borrowers, lenders, and bondholders, and particularly for borrowers looking to refinance distressed assets after special servicing commences.

“If the borrower recently cashed out with a refinancing, they will be more likely to hand [the property] back to the lender,” said Suzanne Amaducci, head of real estate at Bilzin Sumberg.

Publication
December 2020

Will CMBS litigation be the new RMBS litigation?

The economic havoc wreaked by COVID-19 may have the knock on effect of a wave of Commercial Mortgage-Backed Securities (CMBS) litigation, mirroring the deluge of Residential Mortgage-Backed Securities (RMBS) litigation following the 2008 financial crisis. While CMBS and RMBS litigation each have their own unique of set of circumstances, Philip Stein and Kenneth Duvall demonstrate that there are enough commonalities between them to potentially see some repeated issues and patterns come up in future CMBS litigation.

White Knights or Opportunists? Bridge, Preferred Equity Investors an Option for Struggling Real Estate

GlobeSt.com

"Bridge lenders and preferred equity investors are in line to become the go-to rescuers for property owners, especially hoteliers and retailers that have taken the hardest hit. … Attorneys who negotiate between lenders and borrowers also are seeing an uptick. Bilzin Sumberg Miami partner and real estate head Suzanne Amaducci is looking at more than $200 million in interest for bridge loans and preferred equity. 'People are definitely researching the opportunities,' Amaducci said."

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Asset Distress & Revitalization