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Single Asset Real Estate Cases (Series: Ethical Issues in Real Estate-Based Bankruptcies 2020)

Anyone involved in the field of creditors rights on a matter involving an LLC that exists solely to hold the principal asset has surely seen the play where, the night before property is scheduled to be sold at a foreclosure auction, the debtor files bankruptcy. For those not familiar with the process, doing so invokes the “Automatic Stay”, which prohibits the secured lender from foreclosing on the property. The debtor then attempts to make their case to the court for reorganization. But is failing to pay your mortgage really something bankruptcy was meant to solve? If the bank was going to agree to a loan modification, wouldn’t the parities have worked something out by the time the sheriff sale was set? The bankruptcy code recognizes this and therefore has a section devoted to dealing with this specific kind of bankruptcy—the Single Asset Real Estate (“SARE”) case. The goal of this episode is to look into ethical issues surrounding these matters.

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Single Asset Real Estate Cases (Series: Ethical Issues in Real Estate-Based Bankruptcies 2020)

  1. 1. 1
  2. 2. 2 Practical and entertaining education for attorneys, accountants, business owners and executives, and investors.
  3. 3. 3 Thank You To Our Sponsors
  4. 4. Disclaimer The material in this webinar is for informational purposes only. It should not be considered legal, financial or other professional advice. You should consult with an attorney or other appropriate professional to determine what may be best for your individual needs. While Financial Poise™ takes reasonable steps to ensure that information it publishes is accurate, Financial Poise™ makes no guaranty in this regard. 5
  5. 5. Meet the Faculty MODERATOR: David Levy - NRC Realty & Capital Advisors PANELISTS: Christopher Horvay - Sugar Felsenthal Grais & Helsinger LLP Mark Silverman - Dykema Michael Rosow - Winthrop & Weinstine Michael Kind - Locke Lord 6
  6. 6. About This Series Ethical Issues in Real Estate-Based Bankruptcies It does not take a complex corporate chapter 11 bankruptcy to encounter serious ethical issues that must be confronted in a case. In fact, the relative simplicity of a real estate-based bankruptcy will shine the light on all of the main case details, bringing increased scrutiny to all of the debtor’s actions and decisions. Real estate-based bankruptcies are some of the most common matters filed. As an attorney, you are your client’s advocate and need to navigate the waters to provide effective counsel while playing within rules. In this series we tackle some common ethical scenarios that present themselves in real estate-focused bankruptcies frequently, including matters related to valuing assets, insider lease agreements, and a Single Asset Real Estate (SARE) cases. At the end you will be better equipped to answer questions like Is your client being astute or asinine? This this scheme clever or cagey? Under the rules of bankruptcy, is an inside arrangement shady or shrewd? Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and executives without much background in these areas, yet is of primary value to attorneys, accountants, and other seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that participants will enhance their knowledge of this area whether they attend one, some, or all episodes. 7
  7. 7. Episodes in this Series #1: Valuing Real Estate Assets Premiere date: 1/28/20 #2: Insider Lease Agreements Premiere date: 2/18/20 #3: Single Asset Real Estate Cases Premiere date: 3/17/20 8
  8. 8. About This Webinar Single Asset Real Estate (SARE) Cases Anyone involved in the field of creditors rights on a matter involving an LLC that exists solely to hold the principal asset has surely seen the play where, the night before property is scheduled to be sold at a foreclosure auction, the debtor files bankruptcy. For those not familiar with the process, doing so invokes the ―Automatic Stay‖, which prohibits the secured lender from foreclosing on the property. The debtor then attempts to make their case to the court for reorganization. But is failing to pay your mortgage really something bankruptcy was meant to solve? If the bank was going to agree to a loan modification, wouldn’t the parities have worked something out by the time the sheriff sale was set? The bankruptcy code recognizes this and therefore has a section devoted to dealing with this specific kind of bankruptcy—the Single Asset Real Estate (―SARE‖) case. The goal of this episode is to look into ethical issues surrounding these matters. 9
  9. 9. Episode #3 Single Asset Real Estate (SARE) Cases 10
  10. 10. What are Ethics? Webster: (noun) The discipline dealing with what is good and bad and with moral duty and obligation; The principles of conduct governing an individual or a group; A guiding philosophy; A set of moral issues or aspects (such as rightness) 11
  11. 11. Legal Ethics The American Bar Association (ABA) Model Rules of Professional Conduct were adopted by the ABA House of Delegates in 1983. They supply the general ethical rules which govern the practice of law which have been adopted by most states and jurisdictions. A number of the Model Rules are implicated in bankruptcy cases (as they are in litigation in general). Examples include the lawyer’s duty to bring meritorious claims, to be truthful with the Court (and not withhold information relating to criminal or fraudulent enterprises), to be fair to opposing party/counsel, to refrain from engaging in conduct which would disrupt a proceeding or seek to exert undue influence on any Judge or party, and to be truthful in statements to the Court and to others. 12
  12. 12. Model Rules of Professional Conduct Rule 1.7: Conflict of Interest: Current Clients (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. 13
  13. 13. Model Rules of Professional Conduct Rule 1.7: Conflict of Interest: Current Clients (Cont’d) (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing. 14
  14. 14. Model Rules of Professional Conduct Rule 3.1 Meritorious retention A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established. (1) The advocate has a duty to use legal procedure for the fullest benefit of the client's cause, but also a duty not to abuse legal procedure. The law, both procedural and substantive, establishes the limits within which an advocate may proceed. However, the law is not always clear and never is static. Accordingly, in determining the proper scope of advocacy, account must be taken of the law's ambiguities and potential for change. 15
  15. 15. Model Rules of Professional Conduct Rule 3.1 Meritorious retention (Cont’d) (2) The filing of an action or defense or similar action taken for a client is not frivolous merely because the facts have not first been fully substantiated or because the lawyer expects to develop vital evidence only by discovery. What is required of lawyers, however, is that they inform themselves about the facts of their clients' cases and the applicable law and determine that they can make good faith arguments in support of their clients' positions. Such action is not frivolous even though the lawyer believes that the client's position ultimately will not prevail. The action is frivolous, however, if the is unable either to make a good faith argument on the merits of the action taken or to support the action taken by a good faith argument for an extension, modification or reversal of existing law. (3) The lawyer's obligations under this Rule are subordinate to federal or state constitutional law that entitles a defendant in a criminal matter to the assistance of counsel in presenting a claim or contention that otherwise would be prohibited by this Rule. 16
  16. 16. Model Rules of Professional Conduct Rule 3.3: Candor Toward the Tribunal Advocate (a) A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer; (2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or (3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false. 17
  17. 17. Model Rules of Professional Conduct Rule 4.3: Dealing with Unrepresented Person In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client. 18
  18. 18. State-by-State Equivalent Rules Practitioners must also be mindful of equivalent State rules that run parallel to the Model Rules on a national level. 19
  19. 19. Applicable Bankruptcy Code Bankruptcy Code Section 101(14) The term ―disinterested person‖ means a person that— (A) is not a creditor, an equity security holder, or an insider; (B) is not and was not, within 2 years before the date of the filing of the petition, a director, officer, or employee of the debtor; and (C) does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor, or for any other reason. 20
  20. 20. Applicable Bankruptcy Code Bankruptcy Code Section 327 (a) Except as otherwise provided in this section, the trustee, with the court’s approval, may employ one or more attorneys, accountants, appraisers, auctioneers, or other professional persons, that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee’s duties under this title. 21
  21. 21. Applicable Bankruptcy Code Bankruptcy Code Section 328: Limitation on compensation of professional persons (a) The trustee, or a committee appointed under section 1102 of this title, with the court’s approval, may employ or authorize the employment of a professional person under section 327 or 1103 of this title, as the case may be, on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, on a fixed or percentage fee basis, or on a contingent fee basis. Notwithstanding such terms and conditions, the court may allow compensation different from the compensation provided under such terms and conditions after the conclusion of such employment, if such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions. 22
  22. 22. Applicable Bankruptcy Code Bankruptcy Code Section 328: Limitation on compensation of professional persons (Cont’d) (b) If the court has authorized a trustee to serve as an attorney or accountant for the estate under section 327(d) of this title, the court may allow compensation for the trustee’s services as such attorney or accountant only to the extent that the trustee performed services as attorney or accountant for the estate and not for performance of any of the trustee’s duties that are generally performed by a trustee without the assistance of an attorney or accountant for the estate. (c) Except as provided in section 327(c), 327(e), or 1107(b) of this title, the court may deny allowance of compensation for services and reimbursement of expenses of a professional person employed under section 327 or 1103 of this title if, at any time during such professional person’s employment under section 327 or 1103 of this title, such professional person is not a disinterested person, or represents or holds an interest adverse to the interest of the estate with respect to the matter on which such professional person is employed. 23
  23. 23. Applicable Bankruptcy Code Bankruptcy Rule 2014: (a) APPLICATION FOR AND ORDER OF EMPLOYMENT. An order approving the employment of attorneys, accountants, appraisers, auctioneers, agents, or other professionals pursuant to §327, §1103, or §1114 of the Code shall be made only on application of the trustee or committee. The application shall be filed and, unless the case is a chapter 9 municipality case, a copy of the application shall be transmitted by the applicant to the United States trustee. The application shall state the specific facts showing the necessity for the employment, the name of the person to be employed, the reasons for the selection, the professional services to be rendered, any proposed arrangement for compensation, and, to the best of the applicant's knowledge, all of the person's connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee. The application shall be accompanied by a verified statement of the person to be employed setting forth the person's connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee. 24
  24. 24. Key Bankruptcy Definitions Single-Asset Real Estate Case (SARE): Real property constituting a single property or project, other than residential real property with fewer than 4 residential units, which generates substantially all of the gross income of a debtor who is not a family farmer and on which no substantial business is being conducted by a debtor other than the business of operating the real property and activities incidental. Single Purpose Entity: A limited liability company or corporation that holds title to real estate and owes money to a lender as the result of a mortgage on the property, but which has no other assets or liabilities. 25
  25. 25. Key Bankruptcy Definitions Commercial Mortgage-Backed Securities (CMBS) Loan: A type of commercial real estate loan that is secured by a first-position mortgage on a commercial property. These loans are packaged and sold by Conduit Lenders, commercial banks, investment banks, or syndicates of banks. Because of the more flexible underwriting guidelines, CMBS Loans also allow CRE investors that cannot usually meet stringent conventional liquidity and net worth guidelines to be able to invest in commercial real estate. Automatic Stay: An injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the Bankruptcy Code, the stay begins at the moment the bankruptcy petition is filed. 26
  26. 26. Key Bankruptcy Definitions Adequate Protection: Relief created to protect the value of a secured creditor's interests and liens against diminution in value during the bankruptcy proceeding. The relief can be in the form of, among other things, periodic cash payments, interest payments, or a replacement lien on other property. Plan of Reorganization: The plan of reorganization outlines how the debtor will reorganize its business, administer its assets, make distributions to creditors and emerge from bankruptcy. In order to move forward with the plan of reorganization, it must be voted on by the various classes of creditors, satisfy the specific dictates of the Bankruptcy Code, and be confirmed by the Bankruptcy Court. 27
  27. 27. Key Bankruptcy Definitions Bad Faith Filing: Filing to delay creditors with no intent to follow through with the case Numerous factors can indicate that someone is trying to gain an advantage not intended in bankruptcy, and the court will look at all of them. The courts call this standard the ―totality of the circumstances such as the frequency and number of prior bankruptcy filings and dismissals, misrepresentations or omissions in the petition, the feasibility of a repayment plan, any failure to comply with procedures after filing the case, increasing expenses to qualify for Chapter 7 instead of Chapter 13 (such as by financing an expensive car), or any other egregious conduct. 28
  28. 28. Key Bankruptcy Definitions Secured Claim: a debt that you owe and a lien (also called a security interest) on a piece of property you own. If you don’t pay according to the terms of your contract, the lien allows the lender to recover the property, sell it at auction, and apply the proceeds to the account balance. For instance, a mortgage lender with a lien can recover real estate in a foreclosure action, and a vehicle loan lender with a lien can recover a car through repossession. Secured claims are often voluntary. For instance, if you agree to pledge an asset as collateral for the loan (a common practice when buying a house or car), you voluntarily give the creditor a security interest in your property. 29
  29. 29. Key Bankruptcy Definitions Secured Claim (Cont’d): Creditors can also obtain an involuntary lien against your property without your consent. For instance, a credit card company can get an involuntary lien after suing you in a collection lawsuit and winning a money judgment. When you fall behind on your taxes, statutory law gives the IRS the right to a tax lien against your property. A bankruptcy discharge (the order that wipes out debt) won’t get rid of a lien on your principal residence. It only eliminates your liability to pay the debt. Since the lien remains, the creditor can still foreclose or repossess the property if the loan doesn’t get paid. So if you file for bankruptcy and want to keep property securing a loan, you’ll have to continue making payments to the lender until you pay off the debt. 30
  30. 30. Key Bankruptcy Definitions Deficiency Claim: That portion of a claim secured by a lien on property that exceeds the value of the property. In this case, the creditor is granted a secured interest up to the value of its collateral, while any excess amount of its claim over the value of the collateral is classified as an unsecured claim. This unsecured portion of the claim is the deficiency claim. This is a particular problem for a secured creditor when the court assigns a low value to the creditor’s collateral, since this means that more of its claim is shifted into the unsecured claims classification. 31
  31. 31. What Roles do Single Asset Real Estate Cases Play in Bankruptcy Cases? • Narrower criteria to reorganize • CMBS credits involve single-purpose entities • Adequate protection to maintain stay with equity cushion to propose as plan • Improper venue for a two-party dispute 32
  32. 32. Sides of the Matter • Debtor: Buying more time to work out a resolution with lender; restructuring plan could in fact be viable • Lender: Does the claimed equity cushion exist? Am I receiving adequate protection? Can the Debtor confirm a plan under code? • Judge: Is this more than a two-party dispute? 33
  33. 33. Ethical Situation Case Studies 34
  34. 34. Eleventh Hour Filing Steven is an aggressive opportunistic real estate investor. He believes he knows a good buy when he sees it and has a strategy to offer sellers a deep discount to their asking price, in exchange for closing quickly. Recently Steve got a little overzealous with this buying and decided that to fund the purchase of another building, he just had to have, he would stop paying the mortgage on another property to replenish his cash. In looking at this portfolio, he picked the property that was generating some income, had a high loan-to-value (thus, he was paying more interest) and was going to need some capital investment, or ―CapEx‖, as the roof was starting to leak, so thought ―he would play the game as long as he could‖ and hired an attorney to help him drag things out. As part of this strategy, he filed for bankruptcy the morning of the foreclosure sale. Are there ethical issues in play here? Is this shady or shrewd? 35
  35. 35. Ownership Transfer Thomas is sole owner and CEO of Lever Investment Corporation, a real estate holding company focused on acquiring and managing retail strip centers across the Midwest. Thomas is a big fan of using financing, or leverage, to expand his empire and will gladly pay ―pay interest all day‖ if it means he can buy another building. To achieve this, Thomas is a big fan of taking out CMBS loans, as the underwriting is more flexible, and therefore each of his buildings is held in a separate LLC. Unfortunately, Thomas got a bit too exuberant in his last purchase and failed to take into account what the competition from new construction in the area would mean to him. At first he started discounting rent, but when that did not stem his vacancy decline, he began upgrading the property. As typical, he didn’t want to tie up too much cash in one asset, so he decided to stop paying his bank in an effort to self-fund the CapEx investment and figured he would work something out with them later, once he got the building stabilized. The bank initially showed some patience, as they thought the upgrades were improving their collateral, but once he was a year behind and they had covered his real estate taxes, they felt no choice but to accelerate the foreclosure process. At this point Thomas retained an attorney who explained to him that he would have limited options to restructure, given this would be a Single-Asset Real Estate case, given the property sits in a single- purpose entity. Thomas saw this as an easy fix—he just transferred ownership of the property to one of this other formerly single-purpose LLCs and while, he was at it, did the same for a third property he wanted to employ the same ―self funding‖ strategy with. Are there ethical issues in play here? Is this asinine or astute? 36
  36. 36. Bad Boy Act Abe is a physician and ―the man‖ when it comes to cataract surgery in Phoenix, but a first-time real estate investor. He was tired of hearing stories in his country club’s locker room of members doing well buying and selling office properties, particularly medical office, and decided he wanted a piece of the action. He hired a commercial broker to find him some options and a few months later got an offer accepted on a building, but it was for a little more than he wanted to pay. As he was shopping for financing, he was finding that given the property’s current Net Operating Income, he would need to bring more cash to the deal than he really wanted. Abe decided that he real issue here was that the property was offering below market rent and given several of the tenant leases were expiring, he just assumed that he would be able to get more rent for these spaces, so he submitted a rent roll to his preferred lender that included this assumption. The bank funded the loan for the property under a single-purpose entity that Abe owned and he personally guaranteed the loan as well. Unfortunately, his assumptions did not pan out and the property was not cash flowing. As the commercial litigation unfolded, the bank realized Abe had lied about the rent roll and filed criminal bank fraud charges against him, which led to a felony conviction. This was a loan covenant violation which then triggered a clause that the loan immediately became due in full. Abe knew he was underwater on this deal so he refused to sell and filed bankruptcy as the foreclosure date drew near to give himself time to figure something out. Are there ethical in play here? Is this clever or cagey? 37
  37. 37. Single Asset, Among Many Betsy and Eric are married and live in the historic Chicago Gold Coast neighborhood. Betsy has built a successful company that enabled her to not only spend $5 million a rare 6,000 square foot near home as their primary residence, which appraised at $3.1 million, but also buy luxury homes in Palm Beach, Vail, and Napa for a collective $25 million using just $10 million in debt. When her business took a downturn following a worldwide pandemic, they stopped paying the mortgage or taxes on the Chicago home, figuring they would just retire and spend time at the other three if they eventually lost it—but the were going to fight to keep it. Their loan servicer continued the pay the taxes and with the help of a savvy attorney, they were able to delay being foreclosed upon. Along the way their attorney threatened to ―tie the property up in bankruptcy, if they do not work something out‖ with the bank and ultimately this is what they did. The bank is out of the money, as they overvalued the home during underwriting, but are seeking to recover as much as they can. Are there ethical issues in play here? Is this brilliant or bogus? 38
  38. 38. Notable Case Law In re: Intervention Energy Holdings, LLC, Case No. 16-11247 (KJC) Background: Creditor that had been granted a single common unit in limited liability company (LLC) moved to dismiss Chapter 11 case filed on behalf of the LLC on ground that, pursuant to amended limited liability company agreement, unanimous consent of all unit holders was required for commencement of bankruptcy petition on LLC's behalf. Holding: The Bankruptcy Court, Kevin J. Carey, J., held that agreement between limited liability company (LLC) and creditor to which it was indebted, as prerequisite to creditor's forbearance in not exercising its rights in connection with LLC's default, whereby creditor was granted a single common unit interest in LLC and limited liability company agreement was amended to require unanimous consent of all common unit holders for commencement of bankruptcy case on the LLC's behalf, was void as against public policy. 39
  39. 39. In re: Sundance Self Storage-Eldorado LP, Debtors Synopsis Background: Order to show cause was entered to require counsel to Chapter 11 debtor to demonstrate why court should not reconsider the amount of compensation previously awarded and why he should not be sanctioned for violating Bankruptcy Rule. Holdings: The Bankruptcy Court, Robert S. Bardwil, J., held that: 40
  40. 40. In re: Sundance Self Storage-Eldorado LP, Debtors 1. Attorney who had previously represented debtor in prior case, and was owed $3,000 in fees for his services in prior case, lacked the "disinterestedness" required for employment as debtor's counsel; 2. Attorney held a "materially adverse" interest, and was not disinterested, as result of his concurrent representation of debtor's principal in his individual Chapter 13 case; 3. Attorney was duty-bound, once principal consulted attorney about the various responses that he was contemplating in response to the UST's dismissal/conversion motion, to inquire into the details of the responses contemplated and their possible consequences to Chapter 11 estate; and 4. Attorney violated obligation to disclose all connections with any party in interest, and could be denied all compensation on that basis as welt. 41
  41. 41. About the Faculty 42
  42. 42. About The Faculty David Levy - david.levy@nrc.com David Levy is Vice President of Business Development for NRC Realty & Capital Advisors. NRC conducts structured sales, sealed bid sales, and auctions of all types of real estate and real estate-based businesses. NRC is distinguished for being the largest broker of gas stations and convenience stores in the U.S. The firm also provides financial advisory services with a focus on the gas station and convenience store and franchise restaurant sectors. NRC’s clients include corporations, small businesses, banks, private equity, hedge funds, non- traditional lenders, receivers, trustees, investors, and more. The firm has experience in consensual sales of premium, surplus or non-strategic assets, as well as those involved bankruptcy, restructuring, and other distressed situations. NRC has sold $1.5 billion in commercial and residential real estate assets in its 26-year history. Mr. Levy has an MBA from Miami University and holds the prestigious CCIM designation. 43
  43. 43. About The Faculty Christopher Horvay - chorvay@sfgh.com With more than 36 years experience, Christopher J. Horvay has represented senior creditors and asset-based lenders in complex litigation, workout and bankruptcy matters across the country. His practice also involves the representation of asset-based lenders in the documentation of complex loan transactions and in litigation disputes as well as the representation of creditor committees and liquidation trustees in litigation relating to fraudulent conveyances. Chris has consistently been recognized as an Illinois Super Lawyer since 2006, as well as an Illinois Leading Lawyer for the last two years in commercial bankruptcies and workouts. Chris’s recent creditor representations include senior secured lenders in Clark Retail Enterprises and United Airlines, significant landlord interests in K-Mart Corporation, and as special counsel to plaintiffs in Price v. Phillip Morris. He also served as debtor’s counsel in a number of significant business bankruptcy cases, including Ben Franklin Stores in the Northern District of Illinois. Chris has represented numerous asset purchasers, including Newport News, Inc. and Spiegel Catalog, Inc., and sellers in transactions involving troubled companies as well as assignees for the benefit of creditors in out-of-court liquidations. He recently defended former directors and officers of troubled companies in litigation brought against them by bankruptcy trustees. Chris has undertaken a leadership role in the Turnaround Management Association’s Chicago/Midwest chapter since its inception. He previously served as a TMA National Director from 1999 through 2002, as well as president of the Chicago/Midwest chapter in 1997 and 1998. In 2004, Chris was recognized by the Chicago chapter as its Educator of the Year. From 2014 through 2016, he has served as President of the Chapter’s Scholarship Foundation Board. In November, 2016, he received the Chapter’s Legend Award for outstanding service to the Chapter and the profession. 44
  44. 44. About The Faculty Michael Kind - michael.kind@lockelord.com Michael Kind is an Associate in Locke Lord’s Litigation Department and a member of the Bankruptcy, Restructuring & Insolvency and the Business Litigation & Dispute Resolution Practice Groups. Michael has represented creditors, debtors, and trustees in a variety of bankruptcy matters, adversary proceedings, and other disputes. Michael’s bankruptcy experience includes defending and obtaining relief from the automatic stay, resolving claims disputes, litigating claim priority disputes, contesting disclosure statements and plans of reorganization, drafting first-day and other dispositive motions in Chapter 11 debtor representations, and litigating appeals of contested bankruptcy matters. Michael has also represented defendants in a variety of bankruptcy adversary proceedings and contested matters such as fraudulent conveyance and general fraud litigation, preferential transfer litigation, contract disputes, insurance disputes, and fiduciary duty litigation. Michael has also counseled creditors such as insurance companies, landlords, and media agencies with special bankruptcy-related and intellectual property issues. He has also advised clients on the bankruptcy implications of various business transactions and litigation strategies. Michael’s practice also includes experience in complex commercial litigation, focusing on breach of contract, consumer protection, fraud, business tort, post-judgment proceedings, and other disputes in state and federal court. He also represents banks and borrowers in commercial foreclosure proceedings and advises landlords with respect to commercial lease agreements. 45
  45. 45. About The Faculty Michael Rosow - mrosow@winthrop.com From routine banking matters to large, complex litigation, Mike brings a wealth of unique experience to Winthrop & Weinstine’s Creditors’ Remedies and Business & Commercial Litigation groups. Though the heart of Mike’s practice is focused on representing banks and other financial lending institutions, he is a go-to attorney for litigation matters dealing with a strong or complex financial component in the areas of bankruptcy, banking, real estate, contracts, and other commercial matters. Clients appreciate Mike’s experience because he intimately understands the banking industry and its regulatory environment. He is well-versed in all types of collection matters and is able to quickly and efficiently identify possible solutions and moves swiftly to resolve issues, containing costs for the client. Because of his in-depth and ―big case‖ experience, Mike is very comfortable in front of a judge or jury, and is able to take a matter from cradle to grave. What is unique about Mike’s practice is that his knowledge and experience in banking matters has translated well to complex, financial litigation. His ability to simplify complex financial cases and limit them to the core facts is one that works well in a courtroom. Mike excels at heavily litigated bank disputes, including lender liability claims, counter claims against banks, claims of coercion, and fraudulent inducement. He frequently works on cases involving mortgage foreclosures, receiverships and claim and delivery, including cases involving entities that have gone through bankruptcy or have issues associated with a bankruptcy filing. 46
  46. 46. About The Faculty Mark Silverman - msilverman@dykema.com Mark Silverman is a member of Financial Services Litigation Group and is a co-team leader of the Firm’s Commercial Mortgage-Backed Securities Special Servicer Group. His practice covers a wide range of complex commercial litigation, lender’s liability defense, banking, fraudulent conveyance and general fraud litigation, class action litigation, contract disputes, commercial foreclosures, commercial real estate transactions, post-judgment collections proceedings, and general business disputes. Mark represents banks, credit unions, large CMBS special servicers, purchasers of non-performing commercial real estate and C&I loans and investors in loan enforcement litigation and commercial foreclosure actions. Mark also has experience helping Financial Technology (Fin Tech) companies navigate complex litigation relating to a broad range of issues, including the enforcement of Terms of Service Agreements, Merchant Agreements, and Uniform Commercial Code issues, among others. 47
  47. 47. Questions or Comments? If you have any questions about this webinar that you did not get to ask during the live premiere, or if you are watching this webinar On Demand, please do not hesitate to email us at info@financialpoise.com with any questions or comments you may have. Please include the name of the webinar in your email and we will do our best to provide a timely response. IMPORTANT NOTE: The material in this presentation is for general educational purposes only. It has been prepared primarily for attorneys and accountants for use in the pursuit of their continuing legal education and continuing professional education. 48
  48. 48. ABOUT DailyDAC DailyDAC.com is the leading source of information about assignments, article 9, bankruptcy, receiverships, out-of-court workouts and vulture investing, designed for business owners and vulture investors. Visit us at www.dailydac.com. Premium Public Notice Service DailyDAC’s Premium Public Notice Service helps market asset sales on behalf of fiduciaries (e.g., Chapter 11 debtors- in-possession and committees, trustees, receivers, assignees), secured lenders selling collateral under UCC Article 9, and auctioneers to a very large and self-selected group of potential bidders and their advisors. The Service also assists with noticing other events, deadlines, and milestones – including tombstones and other press releases. Our free weekly newsletter, DailyDAC contains our latest bankruptcy article, current Public Notices and all opportunistic deals added to our proprietary database that week. Sign up at: https://www.dailydac.com/dacyak-weekly-newsletter-signup/
  49. 49. About Financial Poise 52 Financial Poise™ has one mission: to provide reliable plain English business, financial, and legal education to individual investors, entrepreneurs, business owners and executives. Visit us at www.financialpoise.com Our free weekly newsletter, Financial Poise Weekly, updates you on new articles published on our website and Upcoming Webinars you may be interested in. To join our email list, please visit: https://www.financialpoise.com/subscribe/

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