The attorneys at Lerch, Early & Brewer assist conventional and government-backed lenders faced with troubled loans throughout the region. We contribute significantly to our clients’ successes by applying to each project sophisticated legal knowledge, a bias for practical solutions, thorough and thoughtful negotiating strategies, and resolute and dedicated representation.
We begin by analyzing and understanding the existing loan documents, looking for flaws in title and lien perfection so that any defect can be cured before the borrower, its counsel or another creditor can interfere with the lien position. From there, we develop a strategy based on our client’s goal, whether it is restructuring, reinstatement, or enforcement and liquidation. We staff each matter with the appropriate mix of transactional, litigation and bankruptcy attorneys, keeping in mind the client’s goals, the size of the loan, the venue and the projected recovery.
Restructuring/Workouts
A loan that is – or is about to become – non-performing poses a myriad of problems for the lender. In such cases, experienced, creative and proactive legal representation is a must if the lender is to maximize realization and recovery. We provide our clients with the framework to deal constructively with problem loans and bankrupt borrowers, and we work with borrowers and lenders to produce a “win-win” resolution of a problem loan. When necessary, we assist lenders in recovering and liquidating real and personal property collateral and litigation in state, federal and bankruptcy courts, both locally and, in conjunction with local counsel, nationally.
Loan Enforcement
We represent conventional, SBA and USDA lenders in loan enforcement proceedings throughout the region. By combining the knowledge gained through our representation of lenders in the origination of loans with the expertise of our litigation and bankruptcy practitioners, we provide efficient, effective representation to lenders seeking to compel borrowers to honor their promises to repay their debts. We enforce promissory notes, loan agreements and guaranties, and recover and help dispose of real estate and personal property collateral in Maryland, the District of Columbia and Virginia.
Bankruptcy
The filing of a bankruptcy petition often disrupts a careful game plan. Rather than viewing a borrower’s bankruptcy as an obstacle, we view it as an opportunity. If the borrower’s management has not been honest or honorable, the Bankruptcy Code gives us the opportunity to bring to light that misconduct and replace management. A sale of bankruptcy assets in a bankruptcy court can yield values that cannot be achieved in a private or non-bankruptcy sale of distressed assets. Bankruptcy also gives borrowers the opportunity to close unsuccessful locations so that they can concentrate on those that are successful and repay lenders from the profitable operations. We represent secured, under-secured and unsecured lenders, landlords and other creditors in proceedings before the U.S. Bankruptcy Courts, and we perform services in proceedings at the direction of U.S. bankruptcy trustees appointed by the courts.
Our lawyers are not only experienced bankruptcy attorneys, but also experienced trial attorneys, allowing us to present cohesive, cogent and persuasive arguments to the Court.
Asset Recovery
In the event that a loan goes into default and a foreclosure action becomes necessary, we represent lenders (including acting as substitute trustees when appropriate) in foreclosure actions in Maryland, the District of Columbia and Virginia. In such actions we will review the title; prepare default and statutory notices and advertisements, including 25-day notice letters to the IRS; prepare documentation required by the courts and auditors; attend foreclosure sales; and prepare subsequent court filings and deeds of conveyance. When necessary, we pursue deficiency judgments and eviction proceedings. In addition, our attorneys possess the experience to handle any unique issues that may arise, including title defects, mechanic’s liens and land use questions.
We utilize the remedies afforded by state laws, bringing collection and recovery actions, pursuing assets through garnishment and attachment, supervising sheriff’s sales and commencing fraudulent conveyance actions.
Representative Matters
- Avoided a fraudulent consulting agreement through the successful prosecution of a fraudulent transfer action in the U.S. Bankruptcy Court for Maryland. Our attorneys brought an adversary action arising out of a business sale against the purchaser and seller’s principals. The fraudulent transfer arose when the business seller’s principals received a consulting contract nearly equal to the sale price at a time when creditors of the business were owed hundreds of thousands of dollars. The Court found that the money paid under the consulting agreement belonged to the creditors, enabling the Trustee to pay creditors a portion of their claims.
- Convinced the U.S. Court of Appeals for the 4th Circuit to unanimously affirm a finding that an attorney conspired with borrowers to defraud an SBA lender. The U.S. District Court for the District of Maryland had found the defendant liable. Our attorneys represented the lender in both the lower court and on appeal. The defendant was subsequently disbarred for her conduct.
- Prosecuted a fraudulent conveyance action to recover two homes, each of which was fraudulently transferred multiple times, and successfully objected to the debtor’s discharge.
