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Course Details

Course Information
  • smart_display Format

    Live Online with Live Q&A

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Finance

Date & Time
  • event Date

    Tuesday, May 6, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will prepare real estate counsel to structure special purpose, bankruptcy-remote entities that satisfy commercial mortgage-backed securities and portfolio lenders' requirements. The panel will discuss current separateness provisions, the conditions and documentation for independent directors, single-member LLCs and special member provisions, and the components of an acceptable non-consolidation option.

Faculty

​J. Eric Wise
Partner
King & Spalding LLP

Mr. Wise is a partner in the Finance & Restructuring group resident in the New York office. As a leading practitioner in restructuring and special situations finance, he has extensive experience in complex liability management transactions, Chapter 11 matters, workouts, rights offerings, recapitalizations, restructuring, post-petition and exit financing, and distressed debt purchases and sales. Mr. Wise is a frequent author and thought leader on many issues in the restructuring and finance spaces.

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Kathryn M. Borgeson
Partner
Cadwalader Wickersham & Taft LLP, London

Ms. Borgeson’s practice is concentrated in the areas of bankruptcy and structured finance. She provides advice to lenders in connection with the origination and securitization of complex bankruptcy-remote commercial mortgage loans. She also advises financial institutions on the safe harbor provisions for financial contracts under multiple insolvency regimes. In addition to her transactional work, Ms. Borgeson has significant bankruptcy litigation experience, having represented creditors, lenders and debtors in bankruptcy proceedings in the financial, automotive and energy industries.

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Matthew Kelsey
Partner
King & Spalding LLP

Mr. Kelsey is a partner in the Finance & Restructuring group resident in the firm’s New York office. He  focuses his practice on complex in-court and out-of-court Chapter 11 matters for debtors, ad hoc credit groups, financial institutions, agents and trustees, and official committees. Mr. Kelsey provides distressed-investing counsel to investment firms, hedge funds, and other financial institutions in a variety of industries, including transportation, real estate, retail, pharmaceutical, infrastructure, finance, shipping, and construction.

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Description

Lenders usually require that the owner/borrower of commercial real estate is a special purpose entity (SPE) adequately insulated from related parties' insolvency or bankruptcy. The goal is for the SPE entity to be "bankruptcy remote."

The bankruptcy-remote SPE must be structured so that it is unlikely to file or be subject to a bankruptcy petition and prevent substantive consolidation with any parent or affiliated entity that may become subject to a bankruptcy or insolvency action. Existing entities should be examined and, if necessary, reformed to qualify as a "recycled entity."

Single-member LLCs have become a common form of ownership and present additional structuring to prevent the entity's dissolution due to events affecting the sole member.

Listen as our authoritative panel discusses best practices for structuring SPEs to achieve bankruptcy remoteness and avoid substantive consolidation. The panel will review single purpose and separateness provisions that appear in the owner/borrower's entity documents, requirements particular to single-member LLCs (including special or "springing" member provisions) and recycled entities, independent director qualifications and documentation, and best practices in drafting and reviewing non-consolidation opinions.

Outline

  1. Structuring a special purpose entity
    • Separateness provisions
    • Barriers to filing for bankruptcy or insolvency
  2. The recycled entity: requirements to qualify
  3. Single-member LLCs
    • Requirements of Delaware entity laws
    • Special or "springing member" provisions
  4. Independent directors
    • When required
    • Qualifications: ID providers
    • Independent director documents
  5. Non-consolidation opinions
    • When required
    • Case law analysis
    • Determination of pairings

Benefits

The panel will review these and other noteworthy issues:

  • What kind of entity is acceptable, and what provisions should be included in the entity documents for an entity to qualify as an SPE?
  • What is a recycled SPE, and what are its additional requirements?
  • What are the additional drafting considerations for single-member LLCs?
  • What are the current requirements relating to independent directors, and how is the hiring of the independent director documented?
  • What are the components of a non-consolidation opinion, and what are the proper pairings to be considered in the opinion?