Case Study Shopping Center

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Rescued Shopping Center  

  • $5.9 million bankrupt shopping center loan

Client quote. “Our bankruptcy attorney had accomplished nothing in three years. We were about to lose our everything. The CCF team stepped in and turned everything around. They simply got the job done, using a mix of expertise that I had never before seen under one roof. They are extraordinarily effective. In my 20+ years as a developer, I have never seen an organization with their resources and impact.” K.W., 2010.

The Challenges.

  1. A moderately sized community shopping center was in bankruptcy for over three years.
  2. A recalcitrant former partner was sabotaging previous refinance efforts, possibly collusion with the bank.
  3. A receiver had injured the shopping center with weaken new leases that reduced the rents and had taken large chunks of cash out of the center.
  4. The owner was within 30-hours of seizure by a very hostile bank and losing all of his assets from other properties as well—because of an arrogant inattentive bankruptcy attorney who had accomplished nothing in more than 18 months.

Action plan. CCF came in, stopped the seizure.

  1. CCF came in, stopped the seizure by “encouraging” the existing bankruptcy attorney to make new appropriate motions with the court.
  2. Analyzed the income and expenses of the property and saw that the center was viable.
  3. Immediately caused new negotiations to be opened with the bank.
  4. Fired the existing bankruptcy attorney and brought in its own associated bankruptcy counsel,
  5. Who arranged a new workout plan,
  6. CCF provided mezzanine DIP financing to allow the client to make short-term payments required under the plan.
  7. Helped the client collect monies owed by existing tenants.
  8. Find a replacement for a difficult major tenant.
  9. Reviewed leases and made recommendations to make them stronger for better and more timely rental, CAM and real estate tax payments.
  10. Assisted client in reorganizing the management of the shopping center.
  11. Positioned the shopping center for refinancing and removal from the old bank lender.

Results. CCF came in, stopped the seizure. Then in fewer than three months, CCF provided mezzanine DIP financing and reorganized the entire bankruptcy proceeding, with the existing lender refinancing the loan for a three-year term, allowing time to do an orderly permanent refinance.

Skill sets employed:

  1. Mortgage financing,
  2. Market analysis of real estate values and uses—particularly in shopping centers,
  3. Banking regulations and law,
  4. Bankruptcy law,
  5. Civil prosecution,
  6. Working with banks and regulators,
  7. Retail lease structures and negotiation,
  8. Rent collection,
  9. Private investigations,
  10. Working with the press for maximum media coverage,
  11. Property management, and
  12. Not so gentle negotiation.

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