United States: Distressed Investments

Ice Miller's Distressed Investment Group advises investment funds, private and institutional investors, lenders, private equity firms, operators and other interested parties in all aspects of strategic distressed investing and operations.

The Distressed Investment Group is comprised of attorneys experienced in corporate restructuring, finance, real estate, mergers and acquisitions, corporate, tax and other practice areas. We focus on distressed investment strategies and transactions, including bankruptcy and in-court restructurings, out-of-court restructurings, and other insolvency-related transactions. Our attorneys have significant experience advising clients on loan-to-own strategies, debt restructurings, debtor-in-possession and exit financings, claims trading, distressed real estate acquisitions, section 363 sales, rescue capital deployment and other investment situations.

Our interdisciplinary approach brings to bear a deep bench of practitioners who represent clients across a broad cross-section of industries and sectors, including real estate, health care, retail and hospitality, among others, and provides us with a unique edge over our competitors. Our primary objective for every client is to maximize the return on each investment in the most efficient and effective manner possible.

Bankruptcy Transactions

We represent sophisticated private equity, hedge fund, strategic and institutional investors, as well as other businesses and individuals, in distressed merger and acquisition activities, including section 363 sales (whether as a "stalking horse bidder" or auction participant) and acquisitions consummated by chapter 11 reorganization plans. We advise clients in developing and implementing investment and financing strategies, including "loan-to-own" and credit bidding that would allow the lender to emerge with equity pursuant to a confirmed plan of reorganization, as well as advising investors on bankruptcy claims trading investment strategies.

Ice Miller represents lenders in complex financings, including debtor-in-possession and exit facilities. We provide advice on transactions on and across the debtor's capital structure, including senior and junior secured debt, term, revolving and bridge loans, and subordinated mezzanine or other subordinated debt. Our interdisciplinary approach and deep experience in lender financing and bankruptcy enables us to handle all issues that arise in distressed transactions.

Transaction Financing

In addition to representing lenders in complex financing transactions, we frequently serve as bond counsel, issuer's counsel, bank counsel and underwriter's counsel in a variety of taxable and tax-exempt municipal financings involving hospitals, health systems, senior living providers, single- and multi-family housing projects, airports, 501(c)(3) organizations, state and local governmental issuers and municipal power agencies. We assist in all phases of the borrowing process, including advice on permissible financing structures and federal tax and securities matters, preparing financing and disclosure materials and assistance with post-issuance compliance matters. When issues of insolvency and financial covenant compliance arise, we work with borrowers, investors, bondholders, trustees and other market players to navigate the required waivers, forbearances and restructuring either under the Bankruptcy Code or out of the court. We leverage our nationally recognized municipal finance practice as an integral component of our multi-disciplinary team to help clients capitalize on distressed opportunities. Further, our strong relationships with financial advisory firms, financial institutions and industry groups in the municipal market provides us with a network of information and resources to best serve our clients.

Out-of-Court Transactions

In certain circumstances, a distressed investment strategy may be pursued in an out-of-court transaction, consisting of a workout, debt or operational restructuring, refinancing, acquisition, or recapitalization. Our attorneys are experienced in determining the feasibility of out-of-court restructurings, with a keen understanding of capital structure and existing creditor, intercreditor, and lender relationships. We take a creative, strategic, and multidisciplinary approach, providing comprehensive advice on the restructuring process, structuring the transaction, managing corporate governance consistent with fiduciary duties and applicable law, and considering tax and other restructuring implications.

Distressed Real Estate

Our Distressed Investment Group has significant experience representing private and institutional investors, including private equity real estate funds and REITs, developers and operators in the acquisition, redevelopment and operation of distressed real estate across various asset classes. We have significant experience in assessing the target's capital structure, including its outstanding debt and equity securities and structured finance securities, such as commercial mortgage backed securities (CMBS) in the real estate sector.

We also represent secured and unsecured creditors, acquirers, and other clients in chapter 11 cases, defaulted-loan litigation, workouts, debt and equity restructurings and recapitalizations, note purchase loans, foreclosures, deeds in lieu of foreclosure, Article 9 sales, assignments for the benefit of creditors, and receiverships. With significant experience and depth in distressed investing, we are well-suited to provide creative, cost-effective and strategic advice for the consummation of successful transactions in the distressed real estate market.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.