Representation of Community Bank Using Personal Property as Collateral
Not every borrower has real estate to put up as collateral for a loan, but many have personal property that will provide adequate security to a lender. Personal property comprises just about everything other than real property, including goods, inventory, equipment, accounts, documents and instruments. Stock is also personal property, as are interests in partnerships and limited liability companies. Our firm provides ongoing assistance to a local community banking client in documenting secured transactions, including both the promissory note and the relevant security documents, and in perfecting the security interests to establish the bank’s priority vis-à-vis other creditors of the borrower. And we help levy on the collateral if the loan goes bad.
The Nicole Energy Services Bankruptcy
On behalf of the debtor, we prosecuted an action for breach of contract
and negligence against a large mid-western pipeline transportation company; the
negotiated settlement valued more than $3.5 million for benefit of the
creditors. Our attorneys overcame the opposition of the debtor’s management and
obtained court approval of compromise. We successfully defended the outcome
through appeals up to the United States Supreme Court.
$6 Million Credit Facility Default Workout
We successfully guided an out-of-court workout of a borrower’s default on a $6 million credit facility secured by real estate and heavy construction equipment. Our attorneys assisted in the asset liquidation and resolved priority disputes with other secured creditors. We also negotiated an asset surrender agreement and secured party sale of collateral.
Workout and Friendly Foreclosure of Failing Pipeline Company’s Assets
In this case, the pipeline company failed during completion of a major
project for a mid-stream transporter during the rainy winter season; the
mid-stream transporter alleged faulty construction and the pipeline company
defaulted on its loan. Attorneys at Kegler Brown negotiated a loan workout between
the lender, the mid-stream transporter and the pipeline construction company,
as well as other creditors, to complete construction, release liens, sell
assets and pay debts.
Advising on Repossession Processes for a National Credit Union
Kegler Brown advised United Federal Credit Union on revising its notices of repossession to be compliant with Ohio laws. This included guidance on the differences between the credit union’s Retail Installment Sales Contracts and regular financing it had on its books. It also included variations based on whether or not the borrower was currently in bankruptcy or had been through a previous bankruptcy and whether or not the repossession was done voluntarily. Our team worked with the credit union to create forms for use by its associates that could be easily (and lawfully) completed during the proper handling of a vehicle repossession in Ohio. In addition, the credit union now uses our firm for subsequent questions on specific repossession matters.
$1.5M+ Loan Collection Through Property Liquidation
Our client loaned approximately $2 million to the operators of a chain of tobacco stores, with the stores and other real property located in three counties serving as collateral. Kegler Brown filed a foreclosure suit in one county, but extended jurisdiction over the real properties in the other two. One of the borrowers filed bankruptcy, but our lawyers obtained a relief from stay and were able to proceed with the suit. An auctioneer was appointed to liquidate the properties after the foreclosure judgment was granted in mid-2016.
$2M+ Creditor Representation During Energy Affiliate Bankruptcy
When SandRidge Energy filed for Chapter 11 bankruptcy in the Southern District of Texas, listing billions in debt, we assisted our client, PowerSecure International, Inc., one of its major creditors, in serving on the Official Committee of Unsecured Creditors. At least 24 affiliates joined SandRidge in the bankruptcy filing in Houston, which lasted from May to October of 2016.
$105,000 Foreclosure on Properties in 3 Ohio Counties
In 2016, Kegler Brown represented a loan servicer for a debt secured by four parcels of real property located in three separate counties in Ohio. The work of our lawyers enabled our client to file a single action, rather than three lawsuits in three separate counties, by filing a single foreclosure action in Franklin County, which also attached jurisdiction to the properties located outside the county.
Another defendant to the foreclosure disputed the client’s lien priority based on the borrower’s fraudulent loan application. Kegler Brown also bifurcated the lien priority dispute from the sale of the properties, allowing a faster sale to prevent the accrual of property taxes pending resolution of the lien priority dispute.
Eviction Cases and Bankruptcy Dismissals for Ohio Real Estate Company
Our client, a local real estate company, needed assistance with removing a nonpaying business tenant, which had multiple pending bankruptcy cases, from its premises. Kegler Brown handled both the eviction cases and the bankruptcies, first obtaining a dismissal of the tenant’s first bankruptcy case and then resolving the second in January 2017.