December 2013

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Pre-negotiation agreements (“PNA’s”) are contractual arrangements in which a lender and a distressed borrower agree to negotiate the terms of a potential workout or settlement. The primary purpose of a PNA is to foster an open, good faith dialogue among the parties to the loan while protecting the parties from unknowingly waiving valuable rights contained in the loan documents. Although not unique to the CMBS world, pre-negotiation agreements in the CMBS context often raise a number of issues that should be considered at the onset of potential settlement discussions. (more…)

In addition to Georgia’s relatively swift non-judicial foreclosure process, lenders with a defaulting borrower in Georgia have the option of seeking a receivership over property securing their loans. A court-appointed receiver can, in keeping with the terms of the receivership order, manage and operate the assets and exercise broad powers over the property while the lender takes the time to come up with the best resolution for the non-performing loan. Having a well-qualified receiver in place can result in stabilized operations at a commercial property and make the property more attractive to potential purchasers, or simply protect the asset from ruin if the borrower is no longer able to perform upkeep and basic protections. (more…)