Bankruptcy Use Saves Business’ Position

Through use of Chapter 11 BSF property interests were maintained.

Case Summary:

  • Confirmed Chapter 11 Plan
  • Motions to Value / Cramdown of Three Separate Properties

Successful Chapter 11 plan protects company’s property interests from foreclosure

BSF had purchased a series of second mortgages. They are in the business of acquiring second deeds, foreclosing, taking possession, and working things out with either the borrower or the first position lender. At some point, there was a series of notes that were foreclosed on, however, BSF was unable to negotiate deals with either the first position lenders or the borrower. BSF’s interests in these properties were threatened due to impending foreclosures by the first position lenders. We worked with BSF to assign these properties to a new entity and pushed that entity into a Chapter 11 bankruptcy. Through the bankruptcy process, we were able to cram down the first position loans to the fair market value of the properties and establish fair terms on repayment of the crammed down mortgages. This was a confirmed plan that allowed BSF to maintain their interests in the property and all of the upside that came with it.