Bankruptcy Court and Distressed CRE Opportunity

Adam Friedman, partner and chair of the firm’s Bankruptcy & Financial Restructuring and Distressed Real Estate Practices, authored an article for Commercial Property Executive entitled “Bankruptcy Court and Distressed CRE Opportunity.” In the article, Adam discusses the benefits of utilizing the bankruptcy process within the commercial real estate (CRE) sector. Inflation, rising interest rates and the impacts of the post-pandemic hybrid and remote work models, combined with $2.5 trillion of CRE loan maturation over the next half-decade, will create opportunities for distressed real estate investors. “With broad protections,” Adam writes, “including the imposition of the automatic stay, which halts lawsuits and foreclosure sales, debtors in Chapter 11 bankruptcy are given ‘breathing room’ to restructure their debts or sell assets.” He adds that such “breathing room” provides for the chance to find “a solution [for] struggling owners or existing lenders—both of whom may be looking for a buyer, a replacement lender, or similar rescue capital.” Adam concludes, “Understanding the rules, pitfalls, and benefits of the Chapter 11 process is essential for success.”