Receivership of Retail Property & Redevelopment Site

Environmental Issue Resolution, Rents & Profits, Asset Disposition

The Bottom Line: 

Successfully resolved longstanding, complex environmental issues at a retail strip mall that had defaulted on its loan.  As receiver, Stapleton Group then successfully sold the property, recouping 100% of the bank’s capital, including all fees and penalty interest.

The Business Issue:

Our bank client did not want to foreclose on a property with a defaulted loan due to outstanding environmental issues.  The bank had negotiated multiple settlement agreements to allow the borrower to sell the property and pay off loan, but the borrower was unsuccessful and the bank had lost confidence.  The bank wanted the problem loan off of its books.

Genesis of Stapleton’s Engagement:    

The bank’s law firm recommended Stapleton Group to serve as receiver.

Obstacles and Stapleton’s Solutions:

  • The property lacked environmental approvals from the Regional Water Quality Control Board (RWQCB) required sell the property.
    • Stapleton worked with environmental consultants and the RWQCB to immediately address issues related to approval delays.
    • Stapleton created and closely-managed a timeline for RWQCB approval and deliverables required.
  • The income property had existing retail tenants and a vacant building.
    • Stapleton took control of the property and all income, collecting rent from existing tenants and engaging manager to clean up a vacant building.
    • Stapleton hired and managed a security service to protect a vacant building.
  • There was an existing contract to sell the property.
    • Stapleton was required by the judge to determine if the existing sale contract should be maintained. We altered the contract to accommodate Receivership sale requirements and informed the court on acceptance of contract.
    • Stapleton negotiated to obligate the buyer to close the sale, regardless of the environmental approval’s timing.
    • Stapleton negotiated with the buyer, multiple owners on title, and the bank to attain approval for the property’s sale.

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