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.
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 Investment Fund – Action to Foreclose on $39.5 Million Mortgage Secured by New Jersey Office Building
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.
Appellate Victory for Special Servicer
Represented the special servicer for a lender 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. In a case of first impression, the Superior Court of 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.
Chinatown Commercial Building Sale Post-Bankruptcy
Represented an affiliate of a New York City-based family office on the approximately $28.6 million sale of a largely vacant commercial building in the Chinatown neighborhood of Manhattan. The sale was following a bankruptcy court order, in a Chapter 11, single-asset bankruptcy case.
Bank Hapoalim B.M. – Loan Workouts
Represent Bank Hapoalim B.M. in the workout of multiple loans secured by assisted living and licensed nursing home facilities.
Bank Hapoalim B.M. – Workout & Foreclosure of Loans
Represent Bank Hapoalim B.M. in the workout and foreclosure of loans secured by unsold condominiums.
Cantor Fitzgerald Securities – Administrative and Collateral Agent in Exit Facility
Represented Cantor Fitzgerald Securities as the administrative agent and collateral agent under an $85 million exit facility following the successful Blackhawk Mining, LLC, et al. (Bankr. D. Del.), chapter 11 cases, which involved over 100 properties, encompassing active mining complexes in West Virginia and Kentucky and substantial metallurgical and thermal coal reserves in West Virginia, Kentucky, Indiana, Illinois and Ohio. The finance component included establishing a collateral trust arrangement by transferring all of the collateral, loans and obligations to a collateral trust and amending and restating the existing loan documents. The real estate component included assigning existing mortgages encumbering the properties, amending and restating the existing mortgages and memoranda of intercreditor agreements to secure Cantor’s interest as collateral trustee, preparing as-extracted collateral filings, reviewing specific requirements related to leasehold properties, and title review.The real estate component included terminating existing mortgages encumbering the properties, preparing new mortgages to secure Cantor’s interest, preparing as-extracted collateral filings, reviewing specific requirements related to leasehold properties and title review. Herrick previously represented Cantor Fitzgerald as the administrative agent and the collateral agent under Blackhawk’s (i) pre-petition $660 million first lien term loan facility and (ii) $150 million DIP term loan facility in connection with the pre-packaged restructuring of approximately $1.1 billion of debt, which involved assigning the previous administrative agent’s interest in all of Blackhawk’s properties in West Virginia, Kentucky, Indiana, Illinois and Ohio to Cantor Fitzgerald, as administrative agent.
Lender – Luxury Hotel in New York City
Representing mezzanine lender in connection with defaults under the mezzanine financing for a luxury hotel in New York City, including advising the lender on a potential UCC foreclosure of the hotel or a potential sale of the lender’s mezzanine loan to a third party.
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.
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 took title to all seven properties. In the course of prosecuting these actions, we obtained an important decision from the Superior Court of New Jersey, Appellate Division, enforcing our client's standard pre-negotiation agreement – an agreement routinely obtained by lenders to avoid potential lender liability claims.
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 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.
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, New York. 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.
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.
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.
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.
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.