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Distressed property
Shoosmiths’ Real Estate, and Insolvency and Restructuring teams work together closely to provide distressed property advice and solutions.
Clients include banks, insolvency practitioners, and developers, with our national team on a number of legal panels.
Work ranges from simple disposals to ‘work out’ situations. These can be straightforward - banks appointing developers to complete developments; or complicated - we provide bespoke solutions to meet clients’ needs.
For example, we acted for an insolvency practitioner concerning a part complete development pre-sold to occupiers and a ground rent investor. The bank wanted to change the unbuilt part of the development, whilst preserving existing sale contracts.
Our solution was to hive the property down, using the bank's power of sale, to a newly-formed subsidiary with the benefit of the existing sales contracts, whilst at the same time terminating the more onerous arrangements. We exploited (fortunately for the client) a number of pre-existing, poorly drafted, or defective agreements. The result saw the development completed, with most of the units sold.
On another occasion, we acted for an insolvency practitioner concerning a practically complete, but unsold development. The developer was a joint venture vehicle, with the bank appointed after relations between the joint venture parties became so strained that the joint venture was terminated.
The bank wanted to take control whilst still working with one of the parties, so a Newco was formed with that party appointed director to deal with ongoing disposals.
This structure was complicated because we had to navigate issues arising from the joint venture, and ensure the new structure did not incur unnecessary corporation tax, SDLT and business rates. It created, though, a ‘clean’ company, which added value in relation to ongoing disposals.
Chris Dewes is a partner in the Real Estate Practice Group, focusing on development, investment and insolvency work, with particular experience relating to hotels, logistics, automotive, mixed use and residential developments. Acting for developers, investors, financial institutions and insolvency practitioners, he has considerable joint venture experience.
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Chris Dewes
Partner
T: 03700 86 4126
I: +44 (0)121 625 4126
E: chris.dewes@shoosmiths.co.uk