Thursday, Feb. 27 | 1–5 p.m.

Location:

The Collaborative in Capella Tower
225 South Sixth Street
Minneapolis, MN 55402

Panel 1 | State of the Credit Markets

This panel will discuss current trends, challenges, and opportunities that are shaping the landscape of credit markets. Key topics will include the impact of changing capital requirements, interest rates, inflation, and the emergence of private lenders on borrowing costs, credit risk and default trends, and the evolving landscape of borrowers’ access to credit.

• Moderator:
  • Erin Snyder, Associate, Maslon LLP

• Panelists:
  • Hemal Gundecha, SVP & Senior Credit Director, Bremer Bank
  • Michael Lebens, SVP & Corporate Banking Leader, Associated Bank
  • Mark Klos, Partner, Maslon LLP

Panel 2 | Hot Topics in Distressed Loans

This panel will discuss the current state of the market, current trends in workout transactions, the status of various high profile enforcement actions, and panelists' thoughts about the coming 12 to 18 months as it relates to distressed loans. Most workouts are conducted out of court, and panelists will describe what we can expect to see in the near future. The panel will also share their thoughts about state court enforcement actions and bankruptcy proceedings in the current environment.

• Moderator:
  • Michael Rosow, Partner, Maslon
• Panelists:
  • Barry Fife, EVP and Chief Credit Officer, Choice Bank
  • Darin Kragenbring, SVP and Relationship Manager, U.S. Bank
  • Jason Reed, Partner, Maslon

AGENDA

1–1:30 p.m. | Registration and Networking

1:30–2:30 p.m. | State of the Credit Markets

2:30–2:45 p.m. | Break

2:45–3:45 p.m. | Hot Topics in Distressed Loans

4 p.m. | Networking Reception

Continuing Education:

Maslon will seek approval with the Minnesota State Board for Continuing Legal Education for 2.0 hours of standard CLE credit.

Questions? Please contact us at info@maslon.com.

For more information, go to Ethical Issues in Real Estate-Based Bankruptcies.

Michael represents clients in loan workouts, creditor remedies, and bankruptcy; financial services litigation; and real estate litigation. He enjoys tackling highly complex cases that require his zealous advocacy in the courtroom, as well as completing transactional work in partnership with banks and other financial institutions to ensure they accomplish their business goals.

Michael has deep experience guiding workout professionals to implement collections processes and determining how best to enforce their rights as creditors. He also works on the collection of unsecured notes, the enforcement of secured loans, and the acquisition of assets of distressed companies.

In addition, Michael continues his service on the global trustees board, joining Partner Amy Swedberg, now in her second year of a two-year term. TMA is a professional community that seeks to strengthen the global economy by working to save distressed businesses, assist management to navigate off-plan events, and help healthy companies avoid similar pitfalls.

To learn more, go to: Turnaround Management Association.

Michael represents clients in loan workouts, creditor remedies, and bankruptcy; financial services litigation; and real estate litigation. He enjoys tackling highly complex cases that require his zealous advocacy in the courtroom, as well as completing transactional work in partnership with banks and other financial institutions to ensure they accomplish their business goals.

Michael has deep experience guiding workout professionals to implement collections processes and determining how best to enforce their rights as creditors. He also works on the collection of unsecured notes, the enforcement of secured loans, and the acquisition of assets of distressed companies.

In this vital resource for bankruptcy attorneys, Jason and Amy share their expertise on claims, including types of claims, filing a proof of claim, allowance of claims and objections to claims, post-petition claims, and subordination of claims.

For more information or to order, go to: Minnesota CLE – Bankruptcy Practice in Minnesota Deskbook.

Jason focuses his legal practice on corporate trustee representation, issues relating to corporate trust litigation, and bankruptcy concerns. His varied bankruptcy practice includes representation of both secured and unsecured creditors as well as representation of creditors' committees, in addition to defending preference litigation. Jason's practice also includes commercial financing transactions such as commercial lending and asset-based lending. Prior to joining Maslon, he clerked for the Honorable Robert Littlefield, Jr. at the United States Bankruptcy Court for the Northern District of New York. He has been recognized since 2019 on the Minnesota Rising Stars list as part of the Super Lawyers selection process.

Amy represents lenders and other commercial creditors, asset purchasers, indenture trustees and adversary proceeding defendants with creditor rights and bankruptcy issues. Recognized as a Minnesota Super Lawyer and as a 2020 and 2022 Leading U.S. Bankruptcy & Restructuring Lawyer by Lawdragon 500, she is an experienced litigator in the bankruptcy courts in Minnesota and other jurisdictions. Amy also assists lenders, bankruptcy trustees, and receivers in commercial real estate foreclosures, litigating fraudulent transfer claims, recovering assets, and negotiating workouts. Amy's experience includes the representation of creditors and asset purchasers in major Chapter 11 bankruptcies, including Delta Air Lines, Petters Company, Barney’s, Granite City, Polaroid, and Toys "R" Us.

• Assess the state of the deal by asking the following questions:
• What types of defaults exist (payment, covenants, other liens, taxes)?
• What type of collateral secures the obligation or loan (accounts, inventory, equipment, real estate, improvements, fixtures, developed property, rental property, owner occupied)?
• What is the value of the collateral? How recent is the last valuation? Is there insurance on the collateral?
• What is your lien priority? Consider statutory (superpriority) liens in addition to consensual liens. Are there any competing interests that may have rights to or possession of your collateral (e.g., landlords, warehousemen, consignors, etc.)?
• What is the status of the loan and/or collateral documentation? Has it recently been reviewed for deficiencies, needed updates, continuation of liens?
• Are existing financial covenants properly structured/defined? Are they measuring the correct financial metrics of the borrower?
• What sources of recovery exist other than the collateral, such as a guaranty or co-borrower? Have such entities been recently evaluated in terms of creditworthiness?
• Does the borrower’s business plan make sense, or do they have an alternative plan to alleviate the default?

2. ENGAGE

• Where do you want the deal to go? Lender control over a deal begins with a notice of default and enforcement of remedies. Consider including the following in a default notice:
• Statement of relevant defaults and timeframe to cure such defaults
• Acceleration of debt, if necessary
• Implementation of a default rate, if available
• Advising the borrower of remedies available to lender and potential for lender to recover fees (late fees, court fees, legal fees for collection)
• Request for information needed to assess situation and extent of defaults (updated financial information, information on litigation, etc.)
• Reservation of rights: indicate that lender is not waiving any remedy by simply providing notice of all currently known defaults and that delay in prosecuting other defaults and remedies does not constitute a waiver of either

3. RECORD

• Create a clear document trail with borrower regarding default and workout agreements. A forbearance agreement can be a strong start and should contain at least the following:
• Acknowledgments by borrower (amount of debt; enforceability of security interest; existence of defaults; no defenses, setoffs or counterclaims; lender’s right to enforce; and that documents are still in effect)
• Release of claims against lender and related entities
• Provisions for payments and related deadlines, along with acknowledgment that time is of the essence
• Provisions providing credit enhancements (adding collateral, guarantors, or other signatories)
• Provisions related to additional lender’s rights (access to collateral, inspection of books and records, audits, budgets, etc.)
• Consider charging a forbearance fee or adding new affirmative or negative covenants of the borrower or guarantors that are not in the loan documents
• Termination of forbearance agreement upon forbearance defaults
• Acknowledgment by borrower that they were represented by counsel in negotiation of forbearance and waiver of jury trial

4. REVIEW

• If workout negotiations fail, consider the following other remedies:
• UCC Article 9 public/private foreclosure sale
• UCC Article 9 partial/full satisfaction of debt agreement
• State court receivership/assignment for benefit of creditors (ABC)
• Deed in lieu of foreclosure
• Deed in escrow
• Sale of loan
• Replevin or foreclosure proceedings/self-help repossession
• Composition agreements/contract with creditors to accept pro rata settlement

We Can Help
Maslon’s Financial Services team is prepared to help with any of the foregoing, including initial reviews of loan files for potential pitfalls. Please contact us if you have questions or would like assistance.

Ana represents financial institutions serving as indenture trustees and in other representative capacities in connection with municipal and corporate bonds and mortgage-backed securities. Her practice includes counseling indenture trustees on issues relating to the administration of the trustee’s duties and powers, including after the occurrence of an event of default. Ana also has extensive experience representing indenture trustees in trust instruction proceedings. Prior to joining Maslon, she practiced in the finance and restructuring group of a large law firm.

Brian has extensive experience representing banks, insurance companies, and other capital providers in all forms of commercial financing transactions. These include the areas of general commercial lending and leasing, asset-based lending, mezzanine/second-lien loans, real estate term and construction financing, indenture trustee representation, loan syndications, project finance, and chattel paper warehouse financing. Brian has also served as lead counsel on numerous transactions involving the structuring and documenting of syndicated secured loans, management contracts, and other commercial agreements with Indian tribes located in the United States and Canada.

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TOPICS:

• Most Recent
• Corporate
• Mergers & Acquisitions
• Labor & Employment
• Product Liability Litigation
• Construction
• Insurance Coverage
• Cybersecurity
• Estate Planning
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