Subprime Lending Team

When real estate finance disputes arise, Steptoe has a national team to handle litigation, restructuring and insolvency matters arising from troubled real estate loans, mortgage backed securities, collateralized debt obligations, financial guarantees and mortgage insurance, as well as other real estate arrangements, structures and acquisitions. Team members are drawn from the litigation, restructuring and insolvency, corporate and real estate practice areas of the firm.

As the real estate finance market has become increasingly securitized, attorneys must be able to handle disputes involving mortgage backed securities and a variety of other complex financial instruments and transactions as well as traditional real estate loans. Steptoe has a seasoned group of trial, restructuring and transactional attorneys prepared to handle real estate financial issues for investors, lenders, loan originators, syndicators, borrowers, investment banks, mortgage insurance companies, sellers, conduits, trustees, servicers, REMICs, special purpose entities, commercial and residential developers and builders, REITs, owners and purchasers.  Steptoe’s attorneys work with their clients to develop innovative approaches that untangle and resolve complex financial relationships.  The Steptoe litigation team is well versed in economic, finance and accounting issues, as well as residential and commercial real estate lending, loan origination, securitization of mortgage portfolios, real estate market and real property issues making them especially suited for contemporary real estate finance litigation.

We are well experienced in enforcing and defending contractual commitments, guaranties, surety bonds and security interests in court or in bankruptcy, We also have extensive experience in pursuing financial fraud and racketeering claims, as well as securities fraud, breach of fiduciary duty, state deceptive practices act, and fraudulent conveyance claims, on behalf of lenders, insurers, investors, and defending such claims on behalf of owners, borrowers, issuers and their officers and directors. Several of the cases have included applying accounting principles to complex financial transactions.

Steptoe also has a large and diversified class action practice. Steptoe attorneys are skilled in dealing with class certification issues, removal of cases from state to federal court, transfer and consolidation of class actions, and best practices in case management, including sequencing of discovery, use of dispositive motions and selection and presentation of experts.  We also have substantial background in class action settlements, including such issues as opt outs, scope of releases, hearings on fairness and reasonableness, appeals of objectors, and other matters.

To handle discovery in these and other complex cases, Steptoe has established a document and data processing center in Rockville, Maryland, using advanced software and expert technicians. We believe this offers class action clients an effective means of controlling discovery costs.  Steptoe does not have to turn to more expensive outside vendors to obtain this capability.

Our real estate finance litigation capabilities are enhanced and strengthened by our sophisticated practice representing lenders, debtors, creditors and purchasers in the workout or restructuring of troubled real estate loans and investments both within and outside of bankruptcy proceedings, a practice in which we formulate and implement complex and innovative approaches to workouts and troubled real estate transactions.  Liquidation of assets is occurring more frequently and imminently in bankruptcy cases, and judicious sale and acquisition strategies are critical.  Our attorneys have represented debtors, secured, unsecured and subordinated creditors, equity security holders, trustees, purchasers, sureties and insurers regarding financially troubled enterprises, both in the United States and abroad, with particularly deep experience in failed or failing real estate and construction projects. 

In addition to litigation, our work has encompassed real property, financing and corporate issues involving real estate in all phases of development: undeveloped land, residential development, office, industrial, warehouse, apartment and condominium buildings, retail spaces, hotels and resorts, shopping centers, restaurants, retail space, medical offices to mobile home parks, railroad yards, oil pipeline-related real estate, public venues and stadiums, and large portfolios of varied types of real estate interests. In connection with this work, the firm has represented buyers, sellers, lenders, loan originators, investment banks, borrowers, landlords, and tenants, as well as receivers and conservators of interests in real estate.

The firm’s representations have encompassed traditional real estate transactions as well as novel real estate arrangements and structures.  We have represented clients in connection with real estate-holding entities such as limited partnerships and limited liability companies, public/private partnerships, REITs and related business structures, and regarding the operation and termination of general and limited partnerships, limited liability companies, and other joint ventures in the real estate arena, including cross-border business ventures in unincorporated form.

When projects or business plans go awry—as they often do in today’s volatile economic climate—our ability to develop innovative approaches to litigation, restructuring, and insolvencies that untangle and resolve complex financial relationships is unsurpassed.

Representative Matters

Steptoe attorneys have:

• Brought racketeering, fraud and constructive trust claims against a real estate developer and loan syndicator on behalf of an issuer of financial guaranty bonds, as well as associated debt enforcement and securities litigation.
• Brought claims against real estate investment trusts to recover collateralized mortgage obligations.
• Brought merger rescission claims on behalf of a real estate holding company in complex litigation concerning the ownership and board membership of the holding company and affiliated entities.  The holding company has holdings worth hundreds of millions of dollars.
• Defended a savings and loan association against racketeering and fraud claims arising from an alleged loan origination fraud involving securitized mobile home loans.
• Defended a title insurer against racketeering, fraud and breach of fiduciary duty claims arising from an escrow relating to complex stock transactions.
• Defended fraud, securities, breach of fiduciary duty and consumer fraud claims arising from the bankruptcy of a national home builder, with extensive focus on real estate valuation and reserve issues.
• Brought breach of contract and fraud claims against a national home builder with extensive focus on divisional accounting issues.
• Represented a group of sureties in workout transactions and bankruptcy proceedings involving two major international construction companies.
• Provided a wide range of workout, restructuring, and bankruptcy-related counsel and advice to a major commercial bank, successfully representing the bank in matters involving hundreds of millions of dollars in loans to companies in the real estate development, and commercial real estate development and ownership sectors. 
• Brought claims on behalf of a major national commercial bank concerning scores of millions of defaulted real estate loans.
• Represented a major commercial bank in the bankruptcy of a developer’s real estate interest.
• Represented a real estate development company in connection with its restructuring of secured debt financing for a real estate project.
• Served as Chapter 11 Trustee in successful sale of thousands of acres of undeveloped real property and resolution of secured claims and tax issues.
• Reorganized real estate developers through Chapter 11 bankruptcies.
• Represented issuers of over two billion dollars of asset backed securities collateralized by mortgage loans, home improvement loans, student loans, insurance premium finance loans, credit card receivables and mobile home loans.
• Represent a major trade association involved in commercial mortgage asset securitization issues in public policy, legislative and amicus brief matters.
• Represented a congressionally chartered corporation on public policy and legislative matters and residential mortgage securitization-related issues.
• Represented individuals and corporations in grand jury investigations of alleged accounting, securities and real estate fraud and alleged bribery and corruption relating to real estate investments and financial guaranty bonds.

News

• Multi-Office Steptoe Team Wins $1.5 Billion Closing
• Steptoe & Johnson LLP Announces Robbin Itkin's Arrival
• Steptoe Launches Subprime Lending Litigation Team