A Goodwin Procter Publication
For The Real Estate Industry
Robert M. Haight, Jr.
Lewis G. Feldman
John M. Ferguson
Edward C. Hagerott
John T. Haggerty
Douglas A. Praw
Christopher B. Price
Andrew C. Sucoff
Sarah E. Moore
Bridget C. Huffstutler
Nathan G. Leonard
The Castle Press
Betting on Distressed Assets
“In poker, as in business, the secret is knowing how
ike poker, real estate is risky, competitive, and uncertain. But,
to manage risk and capitalize on opportunity.”
Lou Krieger, More Hold’em Excellence
real estate, like poker, can be very rewarding if the right hand
The difficulty is determining what the right hand is, and when to play
it. One need look no further than a slight revision of the quote above to
find the answer: capitalize on opportunity and manage risk.
Copyright© 2010 by Goodwin Procter LLP.
All rights reserved. Reproduction, in whole
or part, without permission is prohibited.
This publication may be considered advertising
under the ethical rules of certain jurisdictions
and should not be considered legal advice.
The decline in property values and the need for liquidity have
combined to provide tremendous opportunities for investors to
acquire distressed assets–both real property and real estate-secured
loans. Capitalizing on those opportunities is the focus of this edition of
The articles that follow, however, do more than just identify methods
for acquiring distressed assets. They also illustrate some of the risks that
must be managed. Whether it is the courts undermining credit bidding
in a bankruptcy restructuring plan, potentially changing section 363
sales strategies (see “Has Credit Bidding Met Its Indubitable Equivalent?”),
or negotiating with operators and lenders in hotel acquisitions (see
“Acquiring Hotels: SNDAs Making It Harder”), there are outside forces
that increase risks. Likewise, there are hurdles inherent in the acquisition
strategy itself–the application of intercreditor agreements in a loan-to-own transaction (see “Acquiring The Fulcrum Security”) or FDIC
regulations in a portfolio acquisition (see “Success Through Failure:
Buying FDIC Loans”) – that must be understood to achieve success.
With the proper strategy and a diligent analysis of the risks, investors
can turn the acquisition of a distressed asset into a winning hand.
— Robert M. Haight, Jr.