Interest rates remain high, and for many markets and asset classes, prices have yet to fall. However, there’s at least one way real estate investors can buy a property at the right price in this cycle: Distressed sales.

“It’s a main mechanism for price correction,” said Matthew Scoville, a New York-based attorney and partner at Hunton Andrews Kurth who has represented both lenders and real estate developers. In many cases, distressed sales allow investors to acquire properties that would otherwise not be available. “Opportunities are the name of the game,” he said.

Several relics of the 2008-2010 financial crisis have returned to the commercial real estate sector as distress in the market picks up and lenders and borrowers look for solutions to loans that are in or near default.

The Second Circuit released a new decision this week in Sears regarding bankruptcy valuation methodologies and the entitlement of second lien debt holders to adequate protection. Among other interesting aspects of the ruling, the Second Circuit affirmed the Bankruptcy Court’s adoption of a "net orderly liquidation value" for the debtors’ inventory as of the petition date (rather than looking to the actual values obtained by the debtors during the case).

For a decade or more, restructuring professionals have predicted the coming of a bankruptcy boom. This may be the year those predictions finally come true. Inflation, interest rates, supply chain issues, global conflict and domestic politics have created a challenging macro environment. At the same time, dry powder abounds, with new distressed debt funds cropping up daily. Will this result in a bankruptcy tidal wave, or an increase in workouts and distressed M&A? Perhaps all of the above.

Lender liability typically refers to the situation where a lender exercises such a high degree of control over the day-to-day activities of the borrower that it becomes exposed to claims that otherwise would be asserted against the borrower. A recent decision by a New York Supreme Court judge determined that lenders may be exposed to liability even in the absence of control. This result, if upheld, may gain newfound importance in the COVID-19 era where lenders may turn to courts to help them protect their assets.

Landlords are receiving a deluge of requests to provide rent relief to commercial tenants whose operations have either been closed or substantially restricted as a result of state and local governments’ COVID-19 stay-at-home orders and related restrictions. Some tenants are using the threat of a bankruptcy filing as leverage to obtain these concessions. Meanwhile, landlords are facing their own challenges with mortgage lenders and servicers as they try to service real estate loans with limited available cash.

Goulston & Storrs bankruptcy attorney Doug Rosner recently collaborated with Thomson Reuters to create a three-part video series regarding alternative solutions to the financial problems of distressed companies. This summary highlights the key elements to a successful out-of-court restructuring (part two of the series).

Goulston & Storrs bankruptcy attorney Doug Rosner recently collaborated with Thomson Reuters to create a three-part video series regarding alternative solutions to the financial problems of distressed companies. This summary highlights the advantages and disadvantages of out-of-court restructuring as an alternative to Chapter 11 bankruptcy reorganization (part one of the series).

The COVID-19 pandemic has forced big-name brands to pursue unique strategies to secure fiscal relief.

Since the early days of the COVID-19 crisis in the U.S., it has been a recurring theme to turn on the news and see that yet another big-name retailer is rumored to be on the brink of filing, or has already filed, for bankruptcy.