Defaulted Loans and Workouts
The Maslon Financial Services Team skillfully advises banks, asset-based lenders and other financial service providers about their rights in connection with defaults by corporate borrowers and guarantors. Our Financial Services Team lawyers view workouts as the process of maximizing lender recovery while directing a borrower to refinance or repay the loan as soon as practical. In each case, the best approach will depend on a host of factors, including the integrity and competency of management, refinancing alternatives, the determination of the value of collateral, the dependence upon insiders to obtain recoveries and other loan structure or documentation problems.
Maslon lawyers work closely with their clients in reviewing loan documentation, establishing strategic objectives and implementing a workout plan. Maslon has experience advising lenders about appropriate responses to borrower fraud, accusations of lender liability, environmental risks, regulatory restrictions in the borrower's industry, competing creditor claims and other pitfalls they may face during the workout process.
In a workout setting, Maslon has substantial experience in drafting independent contractor agreements, collateral turnover agreements, forbearance agreements, deeds in lieu of foreclosure and other documents that facilitate the payment of a loan through the liquidation of collateral or the transition of a loan to another lender. Maslon's litigation support in this area is extensive.
- "FDIC Receivership and Bank Litigation: What Litigators and Their Clients Need to Know," Jason Lien & Julian Zebot (published in October 2010 Issue of Pratt's Journal of Bankruptcy Law)