Capital Restructure Group

Chapter 11 Real Estate Turnaround Specialists

Capital Restructure Group (CRG) consists of turnaround specialists and chapter 11 consultants who restructure and refinance debt through our own debt, equity and joint venture fund.

CRG consists of dozens of Associates statewide who specialize in the Chapter 11 reorganization field. The Principals of Capital Restructure Group have a collective 115 years of real estate investment, development and finance experience and are experts in the restructure of and refinance of business and real estate debt through negotiating CMBS loan modifications, commercial real estate loan modifications, note reductions and loan extensions. The primary focus of the organization is the restructuring of debt and the negotiation of note reductions, strip downs and cram downs through the federal bankruptcy court. Our principals sit on the Advisory Board of Capital Underwriters Fund, a bankruptcy specific fund that specializes in all aspects of chapter 11 real estate debt, equity, and joint venture financing. We are therefore more than consultants, we bring the financing to the table that you need.

The principals of CRG have written hundreds of chapter 11 reorganization plans and are experts in the techniques that should be deployed on your behalf to maximize the opportunities gained over your creditors once a chapter 11 has been filed. Through our knowledge of the bankruptcy forum, we create opportunities that would otherwise not be available to you, and apply maximum pressure to your lenders opening up possibilities to buy your loans out at a discount.

In addition to consulting to property owners in chapter 11, our principals have walked in your shoes, having restructured the debt on their own projects through chapter 11 and understand the process from the property owners perspective.

Why CRG

The most common mistake a partnership makes when filing chapter 11 is “turning the keys” over to the bankruptcy attorney without providing the attorney with the tools and the direction they need to maximize the potential for a successful reorganization. As experts in all facets of chapter 11 reorganizations and the techniques required to maximize the leverage over your lenders and with funding capabilities in hand, CRG takes a front seat at the negotiating table for you and drives the process forward. On a day to day basis, CRG interfaces with your legal counsel: We act as your alter ego, formulating strategies with counsel as businessmen for businessmen and provide your attorney with the financing tools and strategies he needs to fight the battle in court. This enables your counsel to maintain laser focus on the legal issues while we work through the business and financing issues with you and your lenders.

Every chapter 11 can utilize outside financing, if for nothing else than for additional leverage over your lenders. It is our experience that once in chapter 11 many lenders won’t seriously negotiate with a borrower unless there is the possibility of an exit strategy. CRG brings that capability with it to the negotiating table for you and drives the negotiating process forward.

It is our belief that a chapter 11 should come down to negotiating with your lender from a position of strength. We bring the strength to the table by going direct to your lender’s business people with our fund in hand to negotiate on your behalf. Our negotiations don’t require the lenders counsel to be present so you are not paying their bill as we explore the many options that open up to you in a chapter 11. We streamline the process saving you time and money.

In the alternative, when negotiations with your lender are initiated through attorneys, you are paying your attorney to speak with the lenders attorney (whose bill you are also paying) and you end up negotiating through very highly paid intermediaries. It’s as if you are negotiating with your lender by voicemail. Not surprisingly, lenders attorneys are predisposed to running up billable hours and they do just that. The costs of our services are a fraction of those fees charged by attorneys and we can save you substantial monies through the course of a chapter 11.

How Does CRG Work

When we enter a chapter 11, we do so to accomplish one objective: The successful restructure or refinancing of your debt on terms most advantageous to you. One of the most effective negotiating tools to accomplish this objective is the plan of reorganization. Having written hundreds of them, CRG utilizes the reorganization plan to apply maximum pressure to the lenders to renegotiate the terms of your loans and or sell at a discount.

The very fact that through the plan of reorganization, a bank can have their loan (often which is due) forcibly restructured in-place over their objections affords opportunities to buy their note at a discount and create equity. A bank does not want to carry a loan on its’ books whose borrower has filed chapter 11 and has impaired credit. As previously noted, CRG underwrites for Capital Underwriters Fund and that fund specializes in taking out lenders who find themselves in the uncomfortable position of potentially having their debt forcibly restructured by a federal bankruptcy judge. CRG therefore opens up a range of financing possibilities for you as the chapter 11 proceeds. Our underwriting document for Capital Underwriters Fund is the disclosure statement and reorganization plan which you need to file to emerge from chapter 11 anyway, and we write them at a fraction of the typical cost.

There is even more opportunity: If your loan balance is more than your property’s value, you still have tremendous leverage over your lender. Because in a chapter 11 a property owner can petition the court to determine the present value of a real estate asset and strip the secured loan down to the present value of the real estate, the court can require the bank to reduce and to rewrite the existing loan at a 100% loan to value. The regulators treat this new loan as nonconforming and force the bank to set aside reserves and reduce the loan on their books to at least 75% of the rewritten amount, creating the negotiating leverage to cash out the bank at or near 75% loan to value, thereby providing an opportunity to create equity..

Does my property meet the criteria necessary for a successful restructure of my debt or financing by one of the CRG Funds? 

Each real estate project has a unique set of facts that may or may not work to your advantage. In order to obtain a successful restructure, CRG analyzes each project and can assist the client in structuring the facts to best leverage the lender. What this means is that in the negotiations with your bank, we lay out which voting class will support us (a voting class is a group of creditors that can approve a reorganization plan that restructures your secured debt over the objection of your lender) and utilize the fact that we can successfully restructure the secured debt through a plan of reorganization to maximize the leverage over your bank and force them to the table.

To have CRG evaluate the options for restructuring your real estate loan, contact us by phone or e-mail us the following information and we will contact you to discuss your project.  All information is kept in strictist confidence.

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