Our Client’s Challenge
Our client held what appeared to be a strong position from a corporate borrower with two loans secured by three parcels of real property and guarantees of the husband and wife who owned the company. Unfortunately, the couple were in a bitter divorce, the state held numerous separate agency liens, and several judgment creditors had claims.
Our solution was to commence a judicial foreclosure against the primary corporate borrower and its operating site. This put all other creditors in a defensive position and forced them to resolve their priorities, if they held them, and acknowledge our client was clearly in first position on the major parcel. A second business site was foreclosed on by the first lender on that tract, leaving the third parcel for our client. The husband and wife had owned this as a vacation parcel. Through a receivership, we ultimately were able to facilitate a sale of the vacation parcel and our client recovered its principal.
Tags: Bankruptcy and Creditors’ Rights, Financial Services