The economy has created an opportunity to find creative solutions. The banks are highly motivated to turn problems into performing loans.
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Los Angeles, CA (Vocus) February 6, 2010
Los Angeles attorney Jerome S. Cohen has successfully resolved a case (Case No.:USBC CDCA 1:08-bk-16828-MT) involving 7 commercial properties in California and New York. “Unfortunately, the economy has created many cases like this,” said Mr. Cohen. “Many successful investors have found themselves unable to service debt due to vacancies, tenant defaults, and other problems.” In this case, the client had built a large, valuable portfolio of properties, with financing from 9 different banks, including JP Morgan Chase, CitiMortgage, IndyMac, and Union Bank. “The economy has also created an opportunity to find creative solutions,” said Cohen, “The banks are highly motivated to turn problems into performing loans.”
As part of the settlement, the US Bankruptcy Court reduced the loan principal by over $2.5 million, and reduced the interest rates on the remaining balances, enabling the investor to keep the properties, which will now generate positive cash flow. This was accomplished using provisions of the Bankruptcy Code that allow “stripdown” of under-secured mortgages, and “cramdown” procedures to force the result upon all creditors. When so many creditors are involved, this can be a very complex effort. The court expressed its admiration for the quality of the work done by Cohen’s firm, especially given the number of banks involved.
For another client, who held only a ten percent interest in a company, Cohen obtained court orders ousting the ninety percent holder and installing Cohen’s client as business manager. Playing key roles in this resolution were associates Elaine V. Nguyen and Scott P. Layfield. Ms. Nguyen is an alumnus of UC Hastings College of Law in San Francisco, and has served with the US Department of Justice and with the US Bankruptcy Court in addition to private practice in bankruptcy law. Mr. Layfield is a graduate of Pepperdine University Law School, and specializes in Chapter 11 law.
Jerome S. Cohen has been practicing bankruptcy law twenty years, and is Board Certified in business bankruptcy, a certification held by very few. The practice represents both debtors and creditors in Chapter 11 proceedings, and encourages those with assets to protect to request a consultation to determine the best strategy for protecting them.
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