Matters

Finance Company – Ponzi Scheme Foreclosure

Representation of a finance company in its foreclosure of a commercial property placed in receivership due to the collapse of an alleged Ponzi scheme by the ownership entity.

Real Estate Owner – Construction and Mezzanine Loan Workouts

Represented a major real estate owner-operator in construction loan workout negotiations with a first mortgage lender and several mezzanine lenders. The negotiation involved complicated inter-creditor issues, partnership funding issues, 421-a, tax concerns and matters before the New York State Attorney General's Office.

Real Estate Investment Fund – Action to Foreclose on $39.5 Million Mortgage Secured by New Jersey Office Building

Herrick delivered a series of important victories on behalf of a real estate investment joint venture in hard fought litigation to foreclose on a $39.5 million mortgage secured by an Edison, New Jersey office building. After obtaining rulings that struck or dismissed all of the defendant debtors’ affirmative defenses and the majority of their counterclaims and third-party claims, the firm won the appointment of a special fiscal agent to oversee the receipt and disbursement of all future revenue from the building as well as an order requiring the return of all misappropriated funds. In the wake of these successes, the parties were able to reach a settlement on extremely favorable terms for the client.

Private Equity Fund – Temporary Forbearance Agreements

Represented a private equity fund in several temporary forbearance agreements with respect to loans secured by real property in Las Vegas, Nevada.

Garrison Special Opportunities Fund – Loan Acquisition

Represented Garrison Special Opportunities Fund LP in the acquisition from a large investment bank of senior mezzanine and first mortgage loans encumbering a property on Manhattan's Upper West Side. Our work included negotiating financing for the loans with a European bank, and handling the restructure of a junior mezzanine loan, a senior mezzanine loan and a mortgage loan with the owner.

Japanese Mortgage Restructuring and Asian Property Acquisitions

Represented a Japanese company in negotiations held in Tokyo with UFJ Bank to restructure $30 million in mortgage debt encumbering property in Tokyo. We then represented a Japanese joint venture involving the company in its purchase and mixed-use development of a property in the Kakinokizaka district of Tokyo and in the purchase of property on Yao Yai Island near Phuket, Thailand.

Appellate Victory for Special Servicer

Representation of a special servicer in a suit against a borrower and three individual guarantors after the borrower procured subordinate financing in violation of a non-recourse carve-out provision. Our client was the special servicer for the lender. In a case of first impression, the New Jersey Appellate Division enforced the non-recourse carve-out provision and imputed personal liability to the borrower and guarantors. It concluded that the disputed clause fixes liability rather than damages and, therefore, does not constitute an unenforceable penalty as the borrower had argued. The Appellate Division also held that the borrower's efforts to “cure” the triggering event did not vitiate personal liability. As a result, the lender properly obtained a $5 million+ deficiency judgment against the borrower and guarantors.

Private Equity Firm – Restructuring of Defaulted Loans on Midtown Condo Project

Represented a private equity firm in the acquisition and restructuring of a mezzanine loan and a mortgage loan on a partially completed condominium project in Midtown Manhattan.

Affordable Housing Lender – Foreclosure of $17.5 Million in Mortgages Secured by Brooklyn Condominium Project

Herrick represented a major NYC affordable housing lender in hotly contested litigation to foreclose on more than $17.5 million in mortgages secured by a stalled condominium project located in Clinton Hill, Brooklyn. Brought in by the client as replacement counsel, Herrick secured the appointment of a receiver to take control of the property, shut down lender liability claims raised by the borrowers in both the underlying foreclosure action and a parallel action filed in another court, and then succeeded in obtaining a final judgment of foreclosure and sale. When the borrowers filed for bankruptcy in an effort to derail the sale, we won a judgment allowing the receiver to remain in place while we moved to lift the automatic stay blocking continuance of the foreclosure proceedings. Having brought the foreclosure action to the brink of completion, Herrick positioned our client to successfully sell the note and mortgage to a developer, releasing our client from this litigation.

Distressed Debt Investor – Mezzanine Loan Foreclosure

Represented a distressed debt investor in foreclosing and conducting UCC secured party sale of portfolio of mezzanine loans securing repo line of credit obligations. One of the mezzanine loan borrowers sought to enjoin the sale; we defeated the TRO application and conducted the sale successfully over the borrower's objection.

Irish Bank – Foreclosure on Battery Park City Building

Represented an Irish bank in a complex foreclosure of a 302-unit leasehold condominium located at 225 Rector Place in New York City. When the developer defaulted on a $165 million acquisition and construction loan, we worked with the lender to foreclose and to fend off a lender liability lawsuit.

New World Acquisitions – Settlement Agreement

Representation of New World Acquisitions in the negotiation and documentation of the terms on which they and their venture partner would enter into a reciprocal support and plan settlement agreement with other third parties in the bankruptcy of Fremont General Corporation.

Real Estate Investment Firm – Acquisition and Foreclosure of $60 Million Mortgage Loan

Advised a New Jersey-based investment firm with over 3.3 million square feet of real estate assets under ownership on the acquisition and foreclosure of a $60 million mortgage loan encumbering an office building located in White Plains, NY. The loan, already in default, was acquired out of a securitized trust. We proceeded to prosecute a pending foreclosure action to judgment, and then represented the client as the successful bidder at the foreclosure sale. Herrick continues to represent the client in connection with various disputes at the property.

Special Servicer for $124 Million Mortgage Loan – Foreclosure and Ancillary Litigation

Representing the special servicer for a $124 million mortgage loan encumbering the Mall at the Source, a shopping center located in Westbury, New York. Herrick prosecuted a foreclosure action on the property to conclusion, obtaining a $145 million judgment against the property owner, and represented the client as the successful bidder at the foreclosure sale. The firm is also handling certain ancillary litigation relating to a purchase option held by our client on adjoining property, and obtained an appellate court decision that thwarted an attempt by the holder of a mortgage on the adjoining property from extinguishing the purchase option through foreclosure proceedings.

Lender and Special Servicer – $126 Million Mortgage on Miami’s Shore Club Hotel

Represented the lender and mortgage servicer in litigation against a hotel developer filed in Nassau County Supreme Court and in the Appellate Division, Second Department. The underlying dispute involved an action filed by our clients in Florida seeking to foreclose the $126 million mortgage on the Shore Club Hotel in Miami, and the hotel developer's ultimately unsuccessful attempts to derail that action. Having slipped a purchase option into a hotel tenant's lease, which purported to convey to the tenant a right to purchase the mortgage loan at fair market value, the developer then "purchased" the option from the tenant and sought to enforce that option in the Florida foreclosure action. On the eve of an expected adverse ruling in Florida, the developer brought its claim to Nassau County, where the trial court granted a preliminary injunction, effectively preventing our clients from foreclosing the mortgage. We filed an appeal and obtained a reversal, resulting in the dismissal of the Nassau County action. Leave to appeal was denied by New York's Court of Appeals.

Special Servicer – Litigation to Collect over $100 Million in Loans Secured by Campground Sites

Represented a commercial mortgage special servicer in its efforts to collect amounts due under two loans for $75 million and $38 million, secured by campground sites located throughout the country. Our representation of the client involved seven foreclosure actions, filed in both New Jersey and New York state courts, through which we have taken title to all seven properties. In the course of prosecuting these actions, we obtained an important decision from the Appellate Division, enforcing our client's standard pre-negotiation agreement – an agreement routinely obtained by lenders to avoid potential lender liability claims.

Special Servicer – Motion for Summary Judgment Granted, Lender Liability and Breach of Good Faith Claims Dismissed

Successful defense of the special servicer of an $18 million loan secured by a Parsippany, New Jersey hotel property against the debtor's claims of fraud, lender liability and breach of good faith. In December 2014, the court granted our motion for summary judgment, dismissing all claims against our client.

Community Preservation Corporation – Real Estate Litigation

Outside counsel to CPC, a leading provider of capital for affordable housing in New York state, in numerous foreclosure actions, many involving stalled condominium development projects that are resolved through litigation or loan workouts.

Lender – Times Square Hotel Enforcement Action

Represented the lender of a $65 million loan to fund the acquisition of a Times Square area hotel following the alleged breach of a provision in the loan agreement requiring that a restaurant tenant servicing the hotel be opened to the public by a specific date. This litigation was ultimately settled favorably after hard fought litigation.

Real Estate Investor – Acquisition and Foreclosure on $5.7 Million in Loans Secured by Manhattan Property

Represented the distressed real estate investment arm of a global financial services firm on the acquisition of defaulted loans secured by a development project in the Washington Heights section of Manhattan, and the successful defeat of a foreclosure action brought by an entity tied to the borrower.