Capital Restructure Group
Chapter 11 Real Estate Turnaround Specialists
Capital Restructure Group (CRG) was formed to overcome the challenges of the restrictive
capital markets that confront real estate developers and investors today. We are
turnaround specialists and chapter 11 consultants who restructure and refinance
debt through our own debt, equity and joint venture fund.
CRG consists of dozens of Associates statewide who specialize in the real estate
bankruptcy field. The Principals of Capital Restructure Group have a collective
115 years of real estate investment, development and finance experience and are
experts in the restructure of and refinance of real estate debt through negotiating
commercial real estate loan modifications, note reductions and loan extensions.
The primary focus of the organization is the restructuring of debt and the negotiation
of note reductions, strip downs and cram downs through the federal bankruptcy court.
Our
principals sit on the Advisory Board of Capital Underwriters Fund, a bankruptcy
specific fund that specializes in all aspects of chapter 11 real estate debt, equity,
and joint venture financing. We are therefore more than consultants, we bring the
financing to the table that you need.
The principals of CRG have written hundreds of chapter 11 reorganization plans and
are experts in the techniques that should be deployed on your behalf to maximize
the opportunities gained over your creditors once a chapter 11 has been filed. Through
our knowledge of the bankruptcy forum, we create opportunities that would otherwise
not be available to you, and apply maximum pressure to your lenders opening up possibilities
to buy your loans out at a discount.
In addition to consulting to property owners
in chapter 11, our principals have walked in your shoes, having restructured the
debt on their own projects through chapter 11 and understand the process from the
property owners perspective.
Why CRG
The most common mistake a partnership makes when filing chapter 11 is “turning the
keys” over to the bankruptcy attorney without providing the attorney with the tools
and the direction they need to maximize the potential for a successful reorganization.
As experts in all facets of chapter 11 reorganizations and the techniques required
to maximize the leverage over your lenders and with funding capabilities in hand,
CRG takes a front seat at the negotiating table for you and drives the process forward.
On a day to day basis, CRG interfaces with your legal counsel: We act as your alter
ego, formulating strategies with counsel as businessmen for businessmen and provide
your attorney with the financing tools and strategies he needs to fight the battle
in court. This enables your counsel to maintain laser focus on the legal issues
while we work through the business and financing issues with you and your lenders.
Every chapter 11 can utilize outside financing, if for nothing else than for additional
leverage over your lenders. It is our experience that once in chapter 11 many lenders
won’t seriously negotiate with a borrower unless there is the possibility of an
exit strategy. CRG brings that capability with it to the negotiating table for you
and drives the negotiating process forward.
It is our belief that a chapter 11 should come down to negotiating with your lender
from a position of strength. We bring the strength to the table by going direct
to your lender’s business people with our fund in hand to negotiate on your behalf.
Our negotiations don’t require the lenders counsel to be present so you are not
paying their bill as we explore the many options that open up to you in a chapter
11. We streamline the process saving you time and money.
In the alternative, when
negotiations with your lender are initiated through attorneys, you are paying your
attorney to speak with the lenders attorney (whose bill you are also paying) and
you end up negotiating through very highly paid intermediaries. It’s as if you are
negotiating with your lender by voicemail. Not surprisingly, lenders attorneys are
predisposed to running up billable hours and they do just that. The costs of our
services are a fraction of those fees charged by attorneys and we can save you substantial
monies through the course of a chapter 11.
How Does CRG Work
When we enter a chapter 11, we do so to accomplish one objective: The successful
restructure or refinancing of your debt on terms most advantageous to you. One of
the most effective negotiating tools to accomplish this objective is the plan of
reorganization. Having written hundreds of them, CRG utilizes the reorganization
plan to apply maximum pressure to the lenders to renegotiate the terms of your loans
and or sell at a discount.
The very fact that through the plan of reorganization, a bank can have their loan
(often which is due) forcibly restructured in-place over their objections affords
opportunities to buy their note at a discount and create equity. A bank does not
want to carry a loan on its’ books whose borrower has filed chapter 11 and has impaired
credit. As previously noted, CRG underwrites for Capital Underwriters Fund and that
fund specializes in taking out lenders who find themselves in the uncomfortable
position of potentially having their debt forcibly restructured by a federal bankruptcy
judge. CRG therefore opens up a range of financing possibilities for you as the
chapter 11 proceeds. Our underwriting document for Capital Underwriters Fund is
the disclosure statement and reorganization plan which you need to file to emerge
from chapter 11 anyway, and we write them at a fraction of the typical cost.
There is even more opportunity: If your loan balance is more than your property’s
value, you still have tremendous leverage over your lender. Because in a chapter
11 a property owner can petition the court to determine the present value of a real
estate asset and strip the secured loan down to the present value of the real estate,
the court can require the bank to reduce and to rewrite the existing loan at a 100%
loan to value.
The regulators treat this new loan as nonconforming and force the
bank to set aside reserves and reduce the loan on their books to at least 75% of
the rewritten amount, creating the negotiating leverage to cash out the bank at
or near 75% loan to value, thereby providing an opportunity to create equity..
Does my property meet the criteria necessary for a successful restructure of my debt
or financing by one of the CRG Funds?
Each real estate project has a unique set of facts that may or may not work to your
advantage. In order to obtain a successful restructure, CRG analyzes each project
and can assist the client in structuring the facts to best leverage the lender.
What this means is that in the negotiations with your bank, we lay out which voting
class will support us (a voting class is a group of creditors that can approve a
reorganization plan that restructures your secured debt over the objection of your
lender) and utilize the fact that we can successfully restructure the secured debt
through a plan of reorganization to maximize the leverage over your bank and force
them to the table.
To have CRG evaluate the options for restructuring your real estate loan,
contact us by phone or e-mail
us the following information and we will contact you to discuss your project.
All information is kept in strictist confidence.
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Chapter 11 real Property Questionnaire (if available)
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List of 20 largest unsecured creditors
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If real Property Questionnaire and List of 20 largest unsecured creditors is not
available:
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Existing debt
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first td
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second td
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third td
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Property value
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Unsecured debt
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Mechanics liens
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Real Estate Taxes
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Bankruptcy filing
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