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June 19, 2013

Mortgage Holders Get a Boost

Greenberg Traurig
Michael Sullivan
Greenberg Traurig, LLP
Wednesday, June 13, 2012
Bankruptcy & Restructuring / Financial Institutions & Banking / Litigation / Trial Practice / Real Estate
All Federal
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The Supreme Court's opinion in Radlax Gateway Hotel LLC, et al. v. Amalgamated Bank, which requires that real estate mortgage holders be permitted to credit bid up to the amount of its claim, will no doubt heighten interest in the "loan-to-own" strategy of purchasing debt to acquire the hotel. Through the court's opinion mortgage holders will now enjoy a greater degree of certainty in gaining control of hotel assets, particularly those having a value less than the mortgage holder's claim. Moreover, by giving the mortgage holders the right to credit bid, the court's opinion also works to limit the hotel manager's risk of "rejection" of the management agreement based in the manager's non-disturbance rights in the SNDA with the mortgage holder.

©2013 Greenberg Traurig, LLP. All rights reserved.

About the Author

Michael Sullivan
Shareholder

Michael J. Sullivan is Co-Managing Shareholder of Greenberg Traurig's Orlando office and Co-Chair of the firm's Hotels, Resorts and Clubs Practice Group. Mike has wide-ranging experience in the acquisition, development, finance, and disposition of hotels, resorts, branded residences and condo-hotels, and healthcare-related properties; management, franchise and operating agreements for hotels; publicly financed hotel management agreements; seniors housing management and third-party lease agreements, and the purchase of distressed mortgage debt instruments secured by hospitality-...

sullivanm@gtlaw.com
407-418-2376
www.gtlaw.com

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