Restructuring Debt Outside Chapter 11

October 14, 2015 4:17 pm Published by Comments Off on Restructuring Debt Outside Chapter 11

Restructuring Debt Without Filing Chapter 11

The Principals of Capital Restructure Group (CRG) have a collective 115 years of real estate investment, development and finance experience and are experts in the restructure of real estate debt through negotiating CMBS modifications, commercial real estate loan modifications, business loan modifications, note reductions and loan extensions. CRG utilizes the leverage afforded by its knowledge of the Federal Bankruptcy System to apply pressure to the creditors to renegotiate the terms of your loans, preferably without the need to file a chapter 11.  In the event a chapter 11 should be filed, CRG is a chapter 11 bankruptcy consulting, finance, and underwriting firm that consist of dozens of Associates nationwide who specialize in the real estate bankruptcy field. The costs of our services are a fraction of those fees charged by attorneys, and we can save you tens of thousands to hundreds of thousands of dollars in legal fees whether you file a chapter 11 or not.


The most common mistake a company makes when opening negotiations to restructure debt is “turning the keys” over to the attorneys and having the negotiations run by legal counsel. As experts in all facets of debt restructure and the techniques to maximize the leverage over your lenders, CRG takes a front seat at the negotiating table for you. If 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 messengers. It’s as if you are negotiating by voicemail.

Our experience is that lender’s attorneys have large retainers paid by a financial institution and you end up fighting a counsel who has a printing press direct from the mint that pays like clockwork. Lenders attorneys are predisposed to run up billable hours and not surprisingly, they do just that.
CRG on the other hand goes direct to your lender’s business people without the need for their attorney to be present and negotiates on your behalf. Ask yourself a simple question: Would you have your attorney negotiate the acquisition of your property for you or your construction or permanent financing for you? If the answer is no, why would you turn the keys over to legal counsel to restructure your debt? CRG directs the strategy of the negotiations as businessmen for businessmen: CRG has excellent relationships with attorneys and is accustomed to interfacing with legal counsel, streamlining the process and saving you time and money.

How do the negotiations work?

CRG has written hundreds of chapter 11 reorganization plans and we are experts in the techniques utilized to make lenders negotiate the rational restructure of real estate debt. Because we know the leverage, parameters and flexibility of chapter 11, we bring that knowledge with us to the negotiating table for your benefit prior to any chapter 11 filing. The fact that in a chapter 11, a bank can have their debt forcibly restructured over their objections (known as a cramdown) and can even have their loan reduced to the present value of the real estate that secures the loan (know as a stripdown) is a powerful advantage that property owners have over their lenders and one that CRG thoroughly leverages in bank negotiations.

A bank or financial institution does not want you to understand the tools available to you under chapter 11 reorganization. CRG knows these advantages and will utilize the most effective methodology for you prior to any chapter 11 filing.

An excellent visual as well as written outline of negotiations is at this link…  what’s best for you

Does my business or my property meet the criteria necessary for a successful restructure of my debt?

Each business or 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 before any negotiations take place with your bank, we structure a voting class (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. In the event a chapter 11 should be filed, we have already pre-packaged your creditors to assure a friendly vote when the time comes to approve a plan.

What else do I need to know?

The very fact that 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. CRG exclusively underwrites loans for private funds specializing in financing businesses and real estate projects that have filed chapter 11 or whose owners are credit impaired in order to take out lenders who find themselves in the uncomfortable position of being restructured. There is even more opportunity: 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 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.


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This post was written by chbfidd1

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Refinancing, discounting and restructuring Ch-11 debt is our business & we’ve been doing it in Ch-11 reorganizations nationwide for 25 years. Call us. We have the resources, the knowledge, the influence with the banks and the capital you need. We are the solution. We guarantee it

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