Real estate lenders and borrowers everywhere are trying to figure out what to do with properties that are either sitting vacant or underperforming pre-pandemic expectations. In New York, a number of mezzanine foreclosures have been pursued with varying degrees of success when challenged in court. Some lenders have been shopping their loans, mostly at discounts to par that are not large enough to create substantial deal flow in the marketplace.

On Jan. 19, 2019, the U.S. Court of Appeals for the Fifth Circuit vacated a bankruptcy court decision awarding Ultra Petroleum Corp. noteholders $201 million in make-whole payments and $186 million in post-petition interest. Under the note agreement, upon a bankruptcy filing, the issuer is obligated for a make-whole amount equal to the discounted value of the remaining scheduled payments (including principal and interest that would be due after prepayment) less the principal amount of the notes.

On Jan. 17, the U.S. Court of Appeals for the Second Circuit vacated the decision of the District Court for the Southern District of New York in Marblegate Asset Management, LLC v.