1. Walk It Off: When Workouts Don’t Work Out
An Exploration of Litigation and Bankruptcy
GreenPearl Midwest: Beyond Distress
May 12, 2011
Chicago Station Urban Condominium Case Study
Project Background:
 150 unit urban condominium development that is 75% sold.
 25% of the loan is outstanding and is 12 months past its maturity.
 Multiple short term extensions have been granted.
 20% of the units are only framed and need to be complete.
 Sales are at a standstill.
 Borrowers have stopped supporting loan and are no longer cooperative despite
their personal guarantees.
 Taxes and condominium assessments are not being paid.

2. Hotel/Condo/Retail Case Study
Asset
 Hotel – 200 Rooms, National Franchise, third party management, upscale
property
 100-one and two bedroom units with owner use restriction of 30 days per annum
 Retail Space – 15,000 square feet of class A, separate building
 Land – five acres, owned fee simple
Loan
 Type: Construction/mini perm
 Term: 36 months
 Loan to cost – 70%
 Loan Past Due – 12-months
 No loan payments – past 6-months
 Personal Guarantees
 Management Contract subordinate to loan
Developer
 Limited Liability Company = 20% equity
 Managing Member – Corporation
 Mezzanine Investor – 10% equity
Overall Project Status
o Appraised value is only 90% of Loan Principal
o Loan is past due 12-months
o No loan payments for the past 6-months
o Franchise is in default
o Property taxes and transient occupancy taxes are in arrears
o Hotel occupancy – 50%; ADR below projections; NOI position before
debt service
o Condominiums – 25% sold, owners are threatening a lawsuit related to
false marketing materials
o Retail – 50% leased, no cash available for tenant improvements
o Notice of default has been filed
o Developer is threatening to file bankruptcy if lender does not extend the
loan and adjust the interest rates.