Distressed Situations

Economic fluctuations are inevitable, and companies can experience distress at virtually any point along the boom-and-bust cycle. When businesses, their creditors, and other parties are faced with complex and time‑sensitive decisions involving the purchase, sale, or restructuring of assets and liabilities, they need access to strategic, multidisciplinary counsel with a 360‑degree view of the challenges—and opportunities—at hand.

HOW WE HELP

Members of Seyfarth’s Distressed Situations team bring to the table diverse experience in bankruptcy, real estate and real estate litigation, construction, corporate, tax, litigation, environmental, labor and employment, and wage and hour matters. National in scope, this interdepartmental group works with, among others, lenders, borrowers, landlords, tenants, investors, developers, owners, contractors, guarantors, and real estate brokers to address the full spectrum of issues that can arise not only in times of stagnation and decline, but also during periods of growth and expansion.

OUR SERVICES

Bankruptcy & Workouts. Our team advises a wide range of clients to help mitigate risk posed by insolvency, to cope with the legal and procedural complexities resulting from a bankruptcy filing, and to maximize financial outcomes. On the litigation front, we help parties to pursue and protect their rights in enforcement, avoidance, and bankruptcy actions. The Distressed Situations team also offers deep expertise to clients across a broad array of industries involved in Chapter 11 reorganizations, Section 363 sales, UCC Article 9 foreclosures, receiverships, and assignments for the benefit of creditors.

Construction & Development. Our Distressed Situations team gives clients access to LEED-certified professionals, licensed architects and engineers, and former construction industry professionals. In distressed asset matters, our construction attorneys assist with project completion issues, delay and other contract claims, defective design and construction claims, performance bond liability claims, warranty claims, lender liability claims, and mechanic’s lien claims.

Environmental. Environmental hazards—including soil and water contamination, abandoned equipment, and asbestos, mold, and lead-based paint—are often a significant concern with distressed properties. Our team helps clients identify, assess, and manage the environmental risks, as well as evaluate, balance and transfer risk using remediation agreements, indemnities, prospective purchaser agreements, covenants not to sue, and comfort letters.

Labor & Employment. Our team helps clients navigate the myriad labor, employment, and benefits issues that can accompany a distressed situation, including negotiating mergers and acquisitions and other transaction terms, bargaining with unions over labor agreements, revising employment policies, and terminating or revising pension or other benefit plans.

Mergers & Acquisitions. Purchases and sales of distressed businesses and assets whether in or out of court—face myriad requirements and challenges. Well-versed in the nuances of distressed buyouts, our team helps clients strategically assess options, evaluate exposures to minimize risk, negotiate with lenders, align opportunities for investors, expedite execution, and overcome post-closing challenges. Throughout all stages, we take a cohesive cross-departmental approach in order to seamlessly address virtually every issue arising in a distressed transaction, including tax, real estate, labor and employment, employee benefits, intellectual property, privacy and data security, environmental, and antitrust matters, among others.

Real Estate & Finance – Litigation. We represent real estate lenders, developers, owners, landlords, tenants, contractors, guarantors, real estate brokers, and related professionals and investors who may be affected by changes in the value of property or of another party to a real estate transaction, or by changed demand for space. We counsel clients regarding strategic planning for real property-related interests, both before and during distressed crises, and use litigation as a tool when necessary, whether to foreclose a loan, obtain a judgment on a guaranty, terminate a tenancy, or enforce rights of landlords, lenders, borrowers, real estate brokers, or other creditors in bankruptcy proceedings or out-of-court restructurings.

Real Estate & Finance – Transactional. Whether representing a lender or a borrower, a landlord or a tenant, an investor or a developer, our experienced national Real Estate team can assist with all aspects of a distressed real estate asset. Our attorneys have extensive experience with CMBS and portfolio loan workouts (from pre-negotiation agreements to forbearance agreements and including loan modifications and restructurings), lease restructures, loan sales and purchases, foreclosures, deeds in lieu of foreclosure, non-judicial foreclosures, and management and sales of REO. Our Real Estate attorneys also work side-by-side with our Litigation, Bankruptcy, and Construction attorneys on matters such as receiverships (including receiver sales), judicial foreclosures, and construction matters (including payment claims, mechanic’s liens, and project completion issues).

Structured Finance. Our team advises investors, issuers, and sponsors on all aspects of asset-backed and structured finance stressed and distressed situations. We work with clients to both protect their equity positions and acquire distressed issuers and assets, analyzing transaction structures and documentation to identify risks and opportunities. Our work encompasses negotiating standstill and lock-up agreements, advising clients on the rights attached to different parts of the capital structure (from purchase rights through to voting lock-outs), acquiring issuers versus assets, and negotiating and executing consent solicitations, exchanges, and amendments. Our team includes attorneys that have led award-winning transactions in the US, Europe, Asia, and the Middle East, including stressed and distressed situations involving conventional and Islamic structures.

Tax. We guide clients through the tax implications associated with distressed debt and arrange the most efficient structures to minimize tax exposure and prevent future litigation.

Wage & Hour Compliance. Our Distressed Situations attorneys represent clients throughout the country in Fair Labor Standards Act (FLSA) and other wage and hour cases before state, federal district, and federal appellate courts, and in federal and state administrative audits.

THE SEYFARTH EXPERIENCE

We lead clients through financial distress, insolvency, debt restructuring, loan defaults, and asset purchases or sales to emerge in a stronger position on the other side. Our attorneys take a comprehensive, proactive approach aimed at maximizing value for buyers and sellers, restructuring debt in creative ways that benefit both lenders and borrowers, and successfully protecting and enforcing clients’ rights in and out of the courtroom.