In this four-part series, colleagues Caroline A. Harcourt and Patrick E. Fitzmaurice provide diligence checklists for the acquisition of distressed real estate debt, and discuss UCC foreclosure basics and 363 bankruptcy sales.
Part I: In Acquiring Distressed Commercial Mortgage Loans: A Diligence Checklist, Caroline explores why, when it comes to the acquisition of distressed commercial mortgage loans, it bears repeating—diligence is key.
Part II: In Acquiring Distressed Real Estate Mezzanine Debt: A Diligence Checklist, Caroline lays out what a mezzanine loan is before describing the diligence that should be performed prior to purchasing a distressed mezzanine loan (or, really, any mezzanine loan).
Part III: In UCC Foreclosure Basics: Acquisition of Distressed Real Estate Mezzanine Debt, Caroline and Patrick outline Uniform Commercial Code (UCC) foreclosures in general terms and describe key considerations for mezzanine lenders (and the purchasers of distressed mezzanine loans) contemplating or planning a UCC foreclosure.
Part IV: Finally, in Acquisition of Distressed Loans: Bankruptcy Considerations and the 363 Sale, Caroline and Patrick imagine a hypothetical distressed debt buyer who has acquired the loan with the goal of eventually obtaining the underlying property and who may be, in turn, distressed by the bankruptcy filing. They then explore why, though often considered an impediment to acquisition efforts, such a bankruptcy could present significant benefits and opportunities for the strategic loan-to-own investor.
Key Considerations in the Acquisition of Distressed Real Estate Debt