Recently, I spoke to a man who owned a 12k shopping center with a few family members and a restaurant that operated in the center. He told me that a year or so ago, his loan was sold to a different bank and the new bank put his loan into technical default, even though he always paid perfectly. He, hired what in hindsight was an inexperienced attorney and, filed a chapter 11 restructuring. The bank filed for relief from stay in order to proceed with a foreclosure. He told me that somehow the bank was successful in getting relief and is proceeding with the foreclosure. The property has 1 million dollars in equity and he continues and has always paid the bank on time. He’s not sure what happened with the hearing where the bank got the ability to foreclose and is no longer speaking with the attorney. Without knowing the exact details, I can only speculate, but it would seem that the inexperienced attorney either missed or totally blew the hearing. He could have proved that the bank had adequate protection and won the hearing, but he didn’t know any better and he didn’t have a qualified Investment Banker to guide him through this process. Now, he’s faced not only losing his investment property that he and his family have invested so much money in, but his business too. Hopefully, I’ll be able to provide him bridge financing to avoid foreclosure and long term financing in the future. If he would have came to me earlier, I probably could have worked with his attorney, prevented the bank their ability foreclose and forced them into a long term deal. His mistake of not hiring a qualified team to guide him, risked losing his investment, risked losing his business, will probably end up costing him a ton of money in bridge loan interest that he could of avoided and cost him many sleepless nights.
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