Distressed Assets and Opportunities

Contact: Matthew G. Summers, John D. Sadler, Chrissey L. Barba

Whether the representation is of a commercial landlord, an asset purchaser, a secured lender, an unsecured trade creditor, a large corporation, an officer or director, a debtor, a committee, indenture trustee, bondholders, or litigation defendant, we have the skill and depth of experience to represent clients efficiently and effectively and to develop creative solutions to the intractable and emergent problems often present in troubled debt, insolvency, and bankruptcy matters. 

Our bankruptcy and restructuring teams in Delaware, Philadelphia, and Denver are ranked by Chambers USA, and members of the bankruptcy team are ranked by the Legal 500 for our work in Chapter 9 bankruptcy cases and municipal insolvencies. The team includes fellows of the American College of Bankruptcy. And Ballard Spahr is one of the only firms in the country to have a leading national practice representing landlords in tenant Chapter 11 cases.

Our breadth of experience gives us perspective on the drivers of all constituencies in bankruptcy cases and distressed situations, including loan workouts and enforcement, and helps us achieve outstanding results and maximize recoveries, whether through litigation or negotiation—inside or outside of a formal insolvency proceeding.

While our entire team is experienced in creditors’ rights matters, several members of our team focus exclusively on such matters. We also defend lenders and other parties against lender liability, preference, fraudulent transfer, and—together with our first-class Delaware Chancery Court litigators—breach of fiduciary duty claims.

Our representations span major American industry sectors—including retail, real estate, technology, telecommunications, cryptocurrency, energy, shipping, health care, automotive, entertainment, finance, aviation, oil and gas, and municipalities—and are national in scope.  We regularly appear in state, federal, and bankruptcy courts across the country.

Because many of the issues involved in bankruptcy, restructuring, and creditors’ rights matters often require industry-specific skills, we routinely work with colleagues in our public finance, real estate, commercial finance, health care, energy and utilities, housing, higher education, securities, investment management, M&A, tax, government relations, media, environment and natural resources, labor and employment, cryptocurrency, and tax practices. 

Our experience includes:

• Representation of traditional and non-traditional lenders, including financial institutions, finance companies, private equity, special servicers, trustees, and bondholders
• Representation of S&P 100 corporations in all aspects of bankruptcy cases filed across the country by their vendors, customers, and contract counterparties and bankruptcy-related litigation
• Transactions involving troubled, defaulted, or underperforming commercial debt
• Asset acquisitions and dispositions and other distressed M&A
• Intercreditor disputes
• Matters involving secured, unsecured, mezzanine, syndicated, senior, and subordinated debt, preferred equity, and joint venture investments
• Out-of-court workouts, restructurings, and forbearances
• Enforcement through judicial and non-judicial remedies, including foreclosures of real estate and personal property, UCC proceedings, and deficiency judgments
• Sales and dispositions of collateral, loans, and participation interests
• Defense of lender liability claims
• Defense of preference, fraudulent transfer, and breach of fiduciary duty claims

Contact: Dominic J. De Simone, Bart I. Mellits, Steve P. Mehr

We advise clients in all aspects of troubled real estate investments, loans, and projects—across locations, financing structures, and property types. We established our Distressed Real Estate team well over a decade ago to guide clients—including lenders, investors, developers, landlords, tenants, servicers, trustees, and receivers—through market downturns and other adverse events that put stress on real estate assets.

We were out front in advising clients during the Great Recession—including handling some of the most significant litigation of the period—and over the years have built on that experience to help clients anticipate and resolve problems and to capitalize on opportunities that arise when market challenges mount—as we did during COVID-19 shutdowns.

As rising interest rates and other economic factors exert stress on the sector, we are assisting clients with a variety of matters, including loan restructurings and workouts, senior/subordination debt transactions, guaranty evaluation and enforcement matters, receivership actions, “conversion-of-use” strategies, foreclosures and deeds-in-lieu of foreclosure, liquidations, asset distributions, and intercreditor matters, including loan audit, buyback and put-back claims as well as REO matters. We also handle landlord and tenant disputes, lease restructuring and enforcement, and tenant bankruptcies. Our construction team handles all aspects of distressed projects, including mechanics liens and construction disputes and claims. And we advise on opportunities related to investing, rescue capital transactions, distressed loan purchases, and bankruptcies.

With many employees leaving offices for remote working arrangements, declines in office occupancies, rental rates, and demand for office space have created a unique set of challenges for office properties that, when combined with higher interest rates and operating costs, pending loan maturities and constrained capital, have created a perfect storm of distress for many of these assets. Our cross-disciplined team of real estate, finance, leasing, enforcement, and bankruptcy lawyers have the experience and strategic thinking necessary to analyze the most complex and demanding of situations and structures, to help clients protect their interests, and to develop and implement clear and effective resolution plans.

The experience of our Distressed Real Estate team spans project types: from shopping centers, malls and other retail properties, to office complexes, hotels and resorts, warehouse and industrial properties, and the spectrum of multifamily residential and mixed-use developments.

With offices in key metro centers nationwide, we understand the regional issues, local laws and political climate, and distinct characteristics of each market—with the resources and scope of a large, national firm to draw upon.

Contact: Gregory L. Seltzer, Kimberly W. Klayman, Scott A. Coleman, Scott L. Diamond

There are few situations more alarming to participants across the capital markets than distress in the banking system. Days before Silicon Valley Bank was closed by regulators and put into FDIC receivership on March 10, 2023, we formed a task force to address client questions and provide strategic guidance on immediate concerns and long-range planning issues.

This task force builds on the firm’s years of experience advising clients on financial institution distress and counterparty risks. It comprises attorneys across legal specialties who can advise on:

• Emerging companies and venture capital
• M&A and private equity transactions
• Counterparty issues involving credit facilities and derivative contracts
• FDIC receiverships
• SIPC proceedings
• Bankruptcy, restructuring, and asset recovery
• Banking regulation and enforcement
• Employment and payroll issues
• Bond law
• Bank M&A
• Lender defaults within syndicated credit facilities
• Banking distress and project finance

Emerging Companies and Venture Capital | Mergers and Acquisitions I Private Equity | Banking and Financial Services | Bankruptcy and Reorganization | Consumer Financial Services | Commercial Finance | Public Finance | Real Estate Finance | Finance | Business and Transactions

Contact: Gregory L. Seltzer, Kimberly W. Klayman

We advise venture capital funds, angel investors, corporate investors, and other groups and individuals that invest in emerging companies. We are regularly called upon to evaluate potential investment opportunities, assist with due diligence investigations, and negotiate financing terms. We also work with portfolio companies in advising on and structuring venture investments.

In addition, we advise emerging companies in navigating issues related to market volatility, such as loan refinancing, angel and seed financing, employment and executive compensation issues, company acquisitions and sales, revenue enhancement strategies, and changes to corporate structure. We are well positioned to assist with distressed deals, including bridge loans and similar investment vehicles, during times of market changes.

Our services include:

• Angel and seed financing
• Venture capital financing
• Employee benefits and executive compensation
• Labor and employment
• Licensing
• Strategic partnership agreements
• Tax
• Mergers and acquisitions
• Public offerings and securities matters
• Business combinations with SPACs (special purpose acquisition companies)
• Product commercialization
• Federal, state, and local regulatory compliance
• Corporate governance

Business and Transactions | Litigation | Emerging Companies and Venture Capital |  Blockchain Technology and Cryptocurrency | Employee Benefits and Executive Compensation | Fintech and Payment Solutions | Investment Management | Manufacturing and Consumer Products | Mergers and Acquisitions | Privacy and Data Security | Private Equity | Real Estate Finance | Securities and Capital Markets | Securities Enforcement and Corporate Governance Litigation | Tax

Contact: Philip E. Legendy

Amid a flood of chapter 11 bankruptcy filings in the post-pandemic landscape, the health care industry is particularly affected, and the need for experienced counsel is paramount. Health care providers, especially those located in rural and inner city areas and in the senior living sector, are experiencing pressure from a confluence of factors. Ballard Spahr is uniquely poised to assist distressed health care clients in navigating all aspects of their heavily regulated business.

Ballard Spahr has represented debtors in distress, lenders, trustees, bondholders and other creditors, and purchasers of assets. With offices across the United States, we leverage the capabilities and knowledge of our Real Estate, Finance, Business and Transactions, Intellectual Property and Litigation departments to assist clients in all jurisdictions.

Contact: William C. Rhodes, Matthew G. Summers

We are a top national firm for public and project finance, with experience representing clients on every side of a financing transaction. Our work is informed by deep, decades-long experience with national and regional markets and debt structures, coupled with an understanding of securities law issues and in-depth experience in restructurings, work-outs and both Chapter 9 and 11 bankruptcy cases.

Our interdisciplinary team is structured to address any need that might arise during a creditor recovery representation. It includes lawyers with specific experience in public and project finance, commercial lending, private equity, P3 transactions, municipal bankruptcy and restructuring, tax and tax credits, public sector labor, housing and community development, government relations, non-profit organizations, real estate and construction, and litigation.

Our robust buy-side bond practice blends lawyers with transactional and workout experience to advise clients on matters involving troubled municipal bond issuances and recoveries. We represent investors and indenture trustees; advise on structured financings with lockboxes, pledges of revenue streams, and other enhanced creditor protections; and counsel institutional investors in primary offerings. We represent indenture trustee and bond investors in waivers and forbearances, workouts and restructurings, and the exercise of remedial rights. We offer our clients tactical and strategic experience executing sophisticated workouts, restructuring, and creditor remedies, both in and out of court.

We leverage our broad public sector practices to advise municipal bond investors to assess recovery strategies when confronting municipal financial distress caused by increasing costs and demand for public services, declining revenue bases and state funding, and a restrictive regulatory environment.

We have pursued remedial rights and litigated on behalf of indenture trustees and bondholders in many of the recent municipal bankruptcy filings in the United States. Our bankruptcy attorneys have hands-on experience in some of the nation’s landmark Chapter 9 cases. We understand state and local laws governing distressed municipalities and their interplay with Chapter 9 of the Federal Bankruptcy Code.

Contact: Jeffrey A. Fickes, Chad A. Stewart

Depressed values present opportunities to acquire troubled companies and assets across industries, asset classes, and capital structures—both in and outside of bankruptcy. We have significant experience representing clients that invest in troubled, distressed, challenged, underperforming, and turn-around businesses, situations, and opportunities.

We have handled transactions for clients on all sides of transactions involving distressed companies and asset classes, including through Chapter 11 sponsorships, Section 363 sales, out-of-court sales and acquisitions, carve-outs, restructurings and recapitalizations. 

We work closely with clients to structure and execute transactions that maximize value, avoid pitfalls, and meet long- and short-term business goals. Our clients include private equity and strategic investors, distressed companies, owners, lenders, debtors, and creditors.  

Our multidisciplinary approach to staffing transactions ensures that every facet of a deal is covered, drawing upon the collective talents of colleagues in areas including tax, employment and benefits, intellectual property, information technology, real estate, finance, environmental, insurance, bankruptcy, securities, and antitrust.

Contact: Raymond A. Quaglia

Ballard Spahr is top-ranked nationally for our work in lending and banking and financial services. We bring experience, and an interdisciplinary approach, across a broad field of practice areas to deliver effective and seamless service across all facets of loan administration and servicing with respect to non-performing or distressed loans. 

Our Commercial Loan Servicing Team assists clients throughout the lifecycle of a loan. We advise lenders, agents, master servicers, and special servicers; loan assumptions and equity transfers; modifications, releases, and defeasances; agent and intercreditor matters; workout, restructuring, and borrower and guarantor enforcement matters; and REO transactions.  

We have negotiated and closed numerous sales and acquisitions of performing and non-performing loans and loan portfolios. We have extensive experience representing construction lenders in all aspects of constructing lending, including budget, project development, contracting and mechanics’ lien, and out-of-balance matters. 

We also are a leader in representing special servicers in all aspects of loan servicing involving distressed loans, including restructuring, enforcement, and foreclosure matters. Our interdisciplinary team includes tax lawyers with extensive experience in REMIC-related tax issues arising from loan modifications and enforcement actions, including issues associated with A/B loan splits.

We also advise on pooling and servicing agreements, discounted payoffs, deeds-in-lieu of foreclosure, forbearances, and reinstatements.

With offices throughout the United States, including key Eastern and Western locations, we understand each area’s regional issues, local laws, political climate, and distinct market characteristics. That perspective, combined with our vast experience in real estate, finance, tax, litigation, receivership matters, and bankruptcy, gives us the skills and insight needed to help clients in all facets of loan servicing and administration.

Contact: William C. Rhodes

Ballard Spahr is top-ranked nationally for project finance, and we’ve been helping clients navigate choppy market conditions for decades. Our Distressed Project Finance team brings the legal skill, industry acumen, and tactical experience to get things back on track—from financing and restructuring options to development and operational challenges, to exercising remedial rights, workouts and litigation strategies.

We have helped finance many of the largest and most complex energy, manufacturing, and infrastructure projects in the nation, including public-private partnerships, government projects, and private development. And we have the experience to jump in at any stage of development and operation.

We represent developers, contractors, project companies, guarantors, investors, sponsors, lenders, municipal issuers, underwriters, and bond purchasers in bond-financed projects. We also advise trustees, investors, sponsors, and lenders in purchases or investments involving projects in distress.

As a multi-practice, national firm, our project finance lawyers collaborate with colleagues in tax, bankruptcy and restructuring, construction and development, real estate, environmental regulation, tax, labor and employment, governance and ownership, and government relations to devise a comprehensive strategy for bringing projects back into alignment.

Services include:

• Representation of institutional investors in primary offerings
• Covenant compliance
• Construction completion, cost over-runs, and operational delay issues
• Alternative feedstock supplies
• Offtake substitutions
• Waivers, forbearances and exercise of remedial rights
• Litigation
• Foreclosures and step-in rights
• Asset re-positioning and dispositions
• Tax and reissuance advice

Contact: Karla M. Vehrs, William P. Wassweiler

If the predicted wave of distressed debt obligations makes landfall, we stand ready to assist master trustees, bond trustees, collateral agents, master and special servicers, paying agents, and loan agents in commercial loan workouts, bankruptcies, receiverships, bond restructuring, litigation, and enforcement.

We have represented clients in both transactional and litigation matters across a spectrum of asset classes, roles, and markets. We provide corporate trust and agency legal services in structured finance, public finance, real estate and project finance, corporate debt, syndicated lending, and other capital markets transactions, including secondary market taxable and tax-exempt trust and custodial structures.

Our corporate trust litigators have extensive experience litigating cases in state and federal courts across the country. We frequently draft and litigate Trust Instruction Petitions under the Minnesota Trust Code to obtain court-ordered direction, liability protection, and finality for all parties involved.

Our work includes

• Representing investors and corporate trustees on matters involving bond defaults, trust instructions, and related litigation
• Pursuing claims on behalf of investors and trustees to enforce loan and bond obligations and to recover funds and assets from borrowers, including claims for fraudulent transfers
• Representing master and special servicers, paying agents, and trustees in structured finance matters involving defaulted debt obligations, mortgage-backed securitizations, and disputes arising out of pooling and servicing agreements
• Advising on forbearances, foreclosures, receiverships, and other remedial rights
• Counseling on workouts, restructurings, bankruptcy, and creditors’ rights
• Assisting with monetizations and dispositions of trust estate collateral

Contact: Matthew G. Summers

Ballard Spahr was among the first national law firms to form a multi-disciplinary Blockchain Technology and Cryptocurrency team and has worked closely with our clients during the explosive growth of cryptocurrencies such as Bitcoin and Ether, and in the realms of decentralized finance (DeFi) applications, and distributed ledger technology.

As a result of our deep experience with the cutting edge bankruptcy and insolvency issues that the cryptocurrency industry presents, Ballard Spahr is positioned to help clients not just hold and survive the current Crypto Winter—but also assist clients in capitalizing on the unique opportunities the current cryptocurrency market downturn provides. 

We leverage the resources of our leading consumer financial services, bankruptcy and restructuring, commercial litigation, commercial finance, white-collar defense, corporate, and tax practice groups to navigate the current downturn and find practical solutions that work within the unique contours of the cryptocurrency industry.

We provide advice on strategic alternatives, restructuring, bankruptcy, regulatory developments, and protecting customer digital assets. We counsel clients on fiduciary duties in the zone of insolvency, guide creditors of insolvent cryptocurrency companies looking to maximize recovery, and help minimize customer risk in the event of a bankruptcy. Our experience in the industry and understanding of these issues is unparalleled.