Workout matters involving financial institutions, commercial borrowers, banks, and real estate developers can be extremely complicated. This is why it is essential to retain a commercial loan workout litigation firm that has experience in all aspects of loan workout situations, such as refinancing, loan modification, negotiation, and litigation.
Commercial Loan Workout Litigation
Knowing when to get legal help is half the battle with commercial loan workout litigation. Without retaining the right firm, banks and financial institutions in need of assistance may become overwhelmed or frustrated by attempting to deal with these complex issues on their own. The right law firm can make a difference by managing these concerns at the outset of the dispute so that they do not evolve into more complex and expensive legal conflicts. Forming a relationship with the right law firm can be extremely helpful when an imminent legal issue emerges. Developing this relationship allows the law firm to step in as soon as possible to work toward a meaningful outcome.
While forming a relationship with a firm well in advance allows for a stronger firm understanding of the company’s needs, there are some situations where a bank or business may need representation immediately. When time is of the essence, hiring the right attorney becomes all the more important.
A knowledgeable law firm will help financial institutions, banks, businesses, and others with issues associated with:
- Loan review
- Loan workouts
- Loan documentation
- Loan restructuring
- Loan modification
- Loan forbearance
- Loan-related litigation
- Mortgage modification
Some most common issues involved in disputes of this nature include:
- Requests to execute judgment against personal or real property
- Seeking the appointment of a receiver
- Confessing judgment
- Prosecuting any mortgage foreclosure action
- Prosecuting an action on guaranty note or another instrument
Hiring a knowledgeable law firm is essential in this situation to protect the interests of the bank or financial institution. The term workout is typically used to refer to any post-default or pre-default negotiations or consensual actions undertaken by loan parties in order to resolve an existing default or to prevent an imminent default. This is usually initiated as a precursor to litigation to avoid bankruptcy proceedings.
The majority of loan workouts are negotiated in the context of an impending borrower bankruptcy. A workout, however, might also be negotiated through one or more parties pursuing remedies against other parties or instituting litigation against other parties, such as the lender. It is essential to retain a law firm that has experience in these complex matters as soon as possible in order avoid other challenges. The issues involved in a commercial loan workout litigation situation frequently involve enhanced knowledge of the law.
When representing banks, it is often the goal of the law firm to maximize lender recovery, while also directing a borrower to repay the loan or refinance the loan as soon as possible. There are many factors involved in this kind of approach, but an attorney may also be involved with:
- Implementing a workout plan
- Establishing strategic objectives
- Reviewing loan documentation
Some other services that a commercial loan workout attorney can assist with may also help to prevent future litigation, including:
- Drafting collateral turnover agreements
- Drafting deeds in lieu of foreclosure
- Drafting forbearance agreements
Litigation in the form of commercial loan workout issues may deal with receiverships, defending third party or lender liability claims, and other credit collection matters.
What to Look For in a Commercial Loan Workout Firm
Aside from experience in the field, it is important to know how to vet a law firm offering commercial loan workout services. Choosing the right firm can be a critical step for protecting immediate interests and setting up procedures and structures to protect the financial institution or business down the line.
The law firm chosen should have a proven track record in this field and offer the resources and personal attention necessary to achieve outcomes. The firm should also project confidence and a deep understanding of the complex issues involved in these kinds of transactions and issues.
If you need assistance with current or potential future commercial loan workout concerns, make the effort today to schedule a consultation with an experienced law firm. Knowing options well in advance allows for the proper partnership between a business and law firm. With so much on the line for your company in a commercial loan workout situation, the relationship with the right law firm is vital. Contact KPPB LAW for more information.
