SETTLEMENT AND RESTRUCTURING ADVISORY SERVICES | real estate | settlement | legacy | finance
Lenders and borrowers are often pushed into a position of conflict due to a changing market or other factors. Each has legal recourse that is rigid in structure with little room for creative solutions. Alternatively, LRA can work with all parties to broker structured benefits to all stakeholders.
The Challenge: the parties to the process have usually been pushed to a reluctant position of conflict due to their respective positions within the transaction.
Lenders are in the business of lending money with structured timeframes of repayment and performance;
Borrowers enter into financing contracts based on their belief that they are able to perform within the contract and make a profit, based on their research and due diligence;
The market in which both parties have entered is all too often the unknown variable which derails the parties' abilities to complete the contract.
The Dynamics: as much as both lender and borrower (and eventually their respective legal representatives) understand each other's positions, it is our experience that the lender requires steps to be taken and procedures put in place to protect and perfect their security. The legal process they are obligated to follow quickly places the parties at odds and on a path which leaves little room for creative solutions.
LRA, as third party, has a very successful track record in implementing solution-based action plans which have resulted in avoiding collapse of the loan and the project which it was funding.
LRA believes that a solution can be brought forward and achieved any time in the process, but in our experience if LRA is involved early in the process, financial loss is mitigated and projects can get back on track to the mutual and eventual benefit of all. (If LRA is involved later on in the process, quite often by that point the parties have a better understanding that their actions will result in both parties coming away hurt in the process, thus leaving them more willing to consider an alternative.)