Boutin Jones INC., Attorneys at Law

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Practices

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Banking, Bankruptcy and Creditors’ Rights

The firm has assembled a multi-disciplinary team of real estate, finance, litigation and bankruptcy attorneys with special expertise in advising and assisting institutional and private lenders at all stages of the credit relationship, including the negotiation and documentation of commercial and real property secured loan transactions, participations, note sales, loan modifications, workouts, enforcement actions, insolvency proceedings, receiverships, foreclosures and OREO disposition. The team consists of highly regarded and experienced attorneys, each of whom has practiced in the areas of real estate finance, bankruptcy and commercial litigation for many years.

Commercial and Consumer Finance

Our expertise is not limited to real estate finance.  Our team has significant experience in the negotiation, documentation and closing of commercial and consumer finance transactions, including secured and unsecured revolving lines of credit, secondary financing and the regulatory framework for consumer and commercial finance transactions.

 

Complex Lending Transactions

We have extensive experience in the documentation and negotiation of secured and unsecured credit facilities, including real property and mixed collateral secured loans for the acquisition, development, construction and refinancing of a wide variety of real property assets and projects. We are highly experienced in the nuances of California real estate lending law and the importance of careful loan structuring. In addition to representing lenders in connection with loan originations, we represent numerous clients in loan participations, the acquisition and disposition of outstanding loans, and the packaging and disposition of loan portfolios.

 

Creative and "Outside the Box" Thinking

We pride ourselves on being careful, thorough and inventive in seeking good business solutions for our clients. What our clients can do, and what our clients should do, are often not the same. Our job is to advise and support our clients by identifying, recommending, and taking the actions best suited to the resolution sought by our clients. Our transactional lawyers are accomplished in complex, significant acquisitions and dispositions, and the risks and benefits associated with most types of secured loan collateral. We add “deal sense” to the mix of advice and strategy we provide to our clients.

 

Diversified Expertise

Our clients benefit from having a cohesive team of dedicated litigation, transactional and insolvency specialists under one roof. Our significant experience in negotiating, documenting and, when necessary, enforcing commercial loans provides a reservoir of knowledge on which to base sound problem-loan advice. Our equally significant experience in the acquisition, operation and disposition of master development projects, commercial office projects and other commercial transactions makes us able to provide unique advice and insight into workout or recovery strategies. We also understand title insurance, representing some of the nation’s largest title and escrow companies, and their insureds, in a variety of litigation and non-litigation contexts.

Individual and Portfolio Loan Sales

We have significant experience in the sale of loan participations, individual loans and loan portfolios. Among other transactions, we represented the State of California in negotiating and documenting two portfolio sales of the CIWMB’s mixed-collateral “Recycling Market Development Zone Loan Program” and we represented a private investor in the acquisition and disposition of a 453-asset portfolio of performing and non-performing loans.

 

Loan Document Review and Preparation

Complexities in the loan enforcement process have caused many lenders to revisit their use of internally-generated “form” loan documentation. The cost-effectiveness of internally-generated form documentation often proves illusory when problems arise. We have developed loan documents for a variety of transactions with a view to the nuances of California practice, and we frequently assist clients with cost-effective document alternatives to better protect the lender’s interests.

OREO Property - Acquisition and Disposition

We have extensive experience in major, complex real estate acquisitions and dispositions, and routinely assist lenders with foreclosures and the subsequent disposition of real estate assets. We handle all aspects of the disposition of OREO assets, as single asset sales or as part of a portfolio, in single-buyer sales and through the packaging of assets and private/public auction process.

 

Our Bankruptcy Practice

The firm also represents creditors (including secured, unsecured, lease and executory contract parties), trustees, committees and court appointed fiduciaries in all aspects of the bankruptcy process. We have significant experience in handling litigation, defense, and enforcement in complex bankruptcy and insolvency matters. Our experience runs the gamut from relief from stay, adversary proceedings concerning preference and fraudulent transfer actions, matters of administrative, claims and objections, plan confirmation and performance, liquidation and distribution, and closing and final decree. This breadth of experience has been recognized by peers and the courts as demonstrated by our service as court authorized mediators, as participants on committees involved in drafting local rules of the court and selecting bankruptcy judges, and as speakers and writers on bankruptcy law topics.

Representative Experience

Transactional Matters

The firm represented a regional bank in the acquisition from national banks and private equity firms of single-family residential loan portfolios with an aggregate value in excess of $100 million. The firm assisted in negotiation and documentation of trade confirmations, loan sale and servicing agreements, and assignment and assumption agreements establishing the terms of acquisition, on a “servicing released” basis, of seller-originated and secondary market loans.

We currently assist a major national bank with a real-estate-owned portfolio consisting of a dozen land, office, retail and multi-family properties. We have prepared, and advised the client regarding new leases, lease amendments and easement agreements to position the properties for sale. We have also prepared purchase and sale agreements and other documentation and review required for selling the properties.

We represented a regional bank in connection with a pharmaceutical company’s $11 million shareholder buyout, negotiating a subordination of the company’s debt to the exiting shareholder and a pledge of the company’s shares to secure the loan facility.

The firm recently assisted a private equity firm in the acquisition from a national finance company of a $13 million non-performing loan secured by sixteen real and personal property secured loans. The firm aided in the negotiation and documentation of the loan purchase, the diligence on the loan and the underlying collateral, the structuring of the transaction for tax and business purposes, and the closing of the acquisition.

We represented a regional bank in connection with the negotiation and documentation of the financing of a ground lease and the construction of a medical facility, including the negotiations with the ground lessor, ground lessee and build-to-suit subtenant under the Ground Lease.

Our team represented the lender, CRHMFA Homebuyers Fund, in the development and implementation of a $25 million Moderate Income Retrofit and Conversion Loan Program, including: (i) negotiation of the California Energy Commission grant contract; (ii) the structuring and creation of loan program documentation, vendor contracts and underwriting guidelines; and (iii) the creation of loan servicing guidelines in connection with long term loan program administration. We previously represented the State’s California Integrated Waste Management Board in the design, documentation and implementation of the CIWMB’s award-winning Recycling Marketing Development Loan Program (RMDZ).

Litigation

The firm represented a private lender in successfully obtaining the appointment of a receiver to take possession of an operating restaurant and brewery following default on a $2.3 million carry-back loan. The receiver collected the rents and minimized waste pending the completion of a non-judicial foreclosure. We advised the client in the post-foreclosure sale of the property to an outside investor.

We represented an out-of-state bank in obtaining the appointment of a receiver to take possession of an industrial manufacturing facility and 30 acres of agricultural land following the borrower’s default and discharge in bankruptcy. The receiver obtained Phase I and Phase II environmental site assessments and handled the disposal of potentially hazardous substances at the property before a third-party bidder purchased the property at a non-judicial foreclosure sale.

We represented a publicly traded bank (in a multi-party action resulting from the failure of a major development project) against claims for breach of covenants, constructive trust and specific performance in connection with the bank’s $11 million loan.

The firm successfully prosecuted a claim for recovery of significant losses incurred by a major local banking institution when it discovered that the mortgaged property was encumbered by a senior lien. The firm obtained a favorable ruling on insurance coverage for the losses from the Ninth Circuit Court of Appeals, facilitating a settlement.

Bankruptcy

Members of the firm acted as local counsel for the U.S. affiliate of a multinational agribusiness conglomerate as the “stalking horse” asset purchaser of a major California tomato processing facility, valued at $39 million, in the owner’s Chapter 11.

Members of the firm also acted as local counsel to the “white knight,” a subsidiary of a major mutual fund company, which provided debtor in possession financing and plan exit financing and acquired the debtor’s gold mining operation under a Chapter 11 plan of reorganization.

We litigated a complex multi-loan judicial foreclosure action involving substantive cross-claims for actual and punitive damages for a bank client. After a six week jury trial, the case was concluded with a jury verdict in excess of $6,000,000.00 in favor of our client.

We served as special counsel for the Chapter 11 Trustee in the In re Kobra Properties bankruptcy case (one of the largest bankruptcy cases in the history of the Eastern District of California).

In the context of a complex adversary proceeding in a Chapter 11 proceeding, a member of the firm successfully represented the holder of a first deed of trust securing in excess of $1,000,000 in an action involving an issue of first impression: whether adjudicated groundwater rights in California were real property or personal property. After a determination in favor of the client that the adjudicated water rights were real property, the client was paid approximately $700,000 from the sale proceeds of those rights and the lien priority position of the client was restored and affirmed.

In a Chapter 9 proceeding of national importance, a firm member successfully represented a public entity and obtained the dismissal of one of the Chapter 9 proceedings. See In re County of Orange, 183 B.R. 594 (Bankr.C.D.Cal. 1995). Ultimately, the client received the disbursement of its monies held by the remaining debtor (approximately $1,000,000) and payment for its loss.

Substituting into the case after confirmation of a Chapter 12 plan, a firm member successfully represented a bank client in defeating the modification of a confirmed Chapter 12 plan and thereafter obtained an award of post-dismissal sanctions against the borrowers in excess of $100,000 given the misconduct in the bankruptcy proceeding. See In re Davenport, 175 B.R.355 (Bankr. E.D. Cal. 1994). We also obtained the dismissal of lender liability claims made against the bank by the borrowers in various state court proceedings.

 

Strategic Advice

We understand the rights and remedies available to the lender faced with a non-performing loan, and can assist in devising strategies for loan enforcement and recovery. We understand the nuances of California’s “anti-deficiency” protections and “one-action rule,” and can effectively help a lender through borrower and guarantor minefields. We know how to integrate foreclosure and receivership actions with actions against guarantors and other third-parties to maximize the lender’s recovery. In the workout context, we understand the importance of pre-negotiation agreements, confidentiality agreements, standstill and forbearance agreements, and other, similar documentation. We also understand the post-foreclosure risks to lenders and the disposition process for lender-owned properties.