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Commercial Lending and Financial Transactions

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Overview

Sheppard Mullin's Commercial Lending and Financial Transactions practice is comprised of attorneys who specialize in the documentation, negotiation and structuring of financial transactions. Attorneys in this group represent lenders, lessors, venture capital groups, investors and, at times, sellers, lessees and borrowers. In tandem with our insolvency and litigation attorneys, we often handle the transactional aspects of the restructuring and workout of troubled loans and the representation of creditors in bankruptcy proceedings. We also represent financial institutions in matters such as licensing, establishment of new branches, regulatory and form compliance procedures. We provide opinions for California law issues such as usury, form compliance for federal and state consumer transactions, UCC and securitization issues.

In the past few years, our attorneys have seen a significant change in the financial and legal services marketplace, especially for attorneys structuring and documenting transactions for financial institutions. The transactions have become more complex and sophisticated. At the same time, technological innovations have substantially shortened the length of time in which transactions are expected to be documented and closed. The competitive marketplace for our clients has made legal fees and expenses a critical component in the success of our clients even getting the deal. In response to this environment, we have organized our Commercial Lending and Financial Transactions Group with a focus on experience, organization, technology and economy. We believe the combination of these four components allows us to provide superior legal service to our clients at a price and within the time limitations now expected and required in the marketplace.

We have a dedicated Due Diligence Team that focuses solely on providing diligence-related support on corporate and financing transactions. Because of this, they are skilled at reviewing and analyzing documents and agreements produced by target companies and can quickly and cost-effectively prepare diligence memoranda, material issues lists and other client deliverables. The Diligence Team can also proficiently oversee the document production and disclosure schedule preparation process on behalf of sellers, issuers and borrowers. Each time services are provided, the Diligence Team develops an institutional knowledge base that can be accessed for future deals by the same client or in the same industry. The Diligence Team has the ability to ramp up a time-sensitive review in less than a day.

Syndicated Credit Facilities

Sheppard Mullin represents agents, lenders and borrowers in syndicated credit facilities. Our expertise ranges from short term unsecured and secured facilities to international banking facilities with multi-jurisdictional collateral issues. Our knowledge of market customs and practices, as well as industry specific trends allows us to effectively assist clients in structuring and negotiating the various inter-creditor, subordination and other agreements arising in complex credit transactions. We understand how the syndication process works and are adept at resolving co-lender issues. Our highest priority is to represent and protect our client while preserving a solid and productive relationship with the borrower and the other financial institutions in the lending group.

Real Estate and Construction Lending

The negotiation and documentation of real estate and construction secured financings is a core competency of Sheppard Mullin's Banking and Finance practice. We pride ourselves on practicality and problem solving, and we regularly advise on structuring loan transactions in compliance with regulatory requirements. We also review title to the collateral and work with title insurers to ensure the delivery of adequate title insurance. We document transactions on the basis of custom drawn documents or, where the client so desires, on the basis of client generated forms with adaptations as necessary to fit the transaction. Our lawyers are experienced in:

  • Conventional long term secured loans
  • Participation loans
  • Tax exempt financings, with and without real estate secured credit enhancements
  • Affordable housing financings
  • Tax increment financings
  • Loan workouts and foreclosures

We understand the issues that arise in connection with initial documentation of construction and term loans, as well as the issues presented by modifications, additional advances and workouts/restructurings. Negotiation and documentation of tri-party agreements with permanent lenders and participation agreements with participant banks is also an area in which we excel. 

Equity Sponsor Finance

Sheppard Mullin finance attorneys have extensive experience in credit transactions involving private equity sponsors. Such matters include acquisition financings, leveraged and management buyouts, recapitalizations, consolidation financings, mezzanine debt (frequently with an equity component) and traditional commercial lending arrangements. Our clients have been sole lenders, administrative agents (with lender syndicates including two to as many as twenty members), and equity participants in such transactions. Attorneys in several of the firm's other practice areas are frequently part of the "team", including attorneys in our real estate, securities, environmental, tax and benefits and bankruptcy practice groups. Transaction size with respect to senior debt financings ranges from $20,000,000 to over $200,000,000 and these transactions frequently involve multiple credit providers and the negotiation of appropriate subordination and intercreditor arrangements.

Specialized Industry Finance

Because the infusion of capital is one of the pillars of success for many businesses, all industries are dependent upon the lender/borrower relationship. However, not all industries are the same, and many require very specific knowledge of specialized laws, deal structures and the like. In addition to our broad and deep general financing skill, we have experience in industries that are considered "specialized", such as:

  • Affordable Housing
  • Agriculture
  • Automotive
  • Communications
  • Gaming
  • Healthcare
  • High Tech
  • Hospitality
  • Native American Enterprises
  • Media and Entertainment
  • Professional Services
  • Retail
  • Time Shares

We are able to respond swiftly and skillfully to the client's individual needs balanced with industry specific standards and laws, which can vary from transaction to transaction. Our understanding of very specific and specialized industries has allowed us to provide clients with an economical approach to avoiding pitfalls, resolving challenges, capitalizing on opportunities and thus, successfully closing the transaction at hand.

Equipment Leasing

The firm has represented institutional clients in a wide range of equipment leasing transactions. Our attorneys have been involved in a myriad of industries conducive to such transactions, including aircraft, telecommunications, shipping, storage containers, automotive, maritime, railroad rolling stock and locomotives, medical, construction, computers and other technological equipment. Our expertise ranges from structuring and documentation to lease enforcement to letters of credit and bonds in a variety of deal structures, such as:

  • Leveraged and single investor leases
  • Replacement structures
  • Portfolio acquisitions and sales
  • Sale and leasebacks
  • Synthetic leases
  • Lease in and lease outs
  • Cross border leases
  • Lease securitizations

As tax considerations affect many of these transactions, we also advise on federal and state tax laws pertaining to equipment leasing matters.

Loan Portfolio Acquisitions

We advise clients in connection with virtually every type and size of non-performing and performing loan portfolio acquisition transaction. Our representation includes both buyers and sellers, and we have guided our clients through the host of challenges associated with these transactions, including:

  • Due diligence, purchase agreements and offering materials
  • Title reports and reviews
  • Bid analysis and preparation
  • Warranties and remedies
  • Pro-ration procedures and post-closing claims
  • Disputes resolution

We have efficiently closed transactions throughout the country.

Public Finance

Sheppard Mullin attorneys have served as bond and disclosure counsel in municipal bond financings, and we represent indenture trustees with respect to defaults, workouts, bankruptcies and indenture administration involving a wide range of bond debt. We also represent participants in leveraged lease transactions, as well as underwriters, placement agents, letter of credit providers, indenture trustees and other parties in public and private offerings of tax-exempt bonds and certificates of participation. 

Our attorneys' public finance experience exceeds 30 years and has involved more than 250 bond issues and $10 billion of bonds, certificates of participation and debentures and over 100 default or potential default situations. Representative bond default matters include numerous defaults occasioned by the takeover of failed savings and loan associations, both with respect to their own corporate debt and various tax exempt bond programs supported by a letter of credit or other form of credit enhancement provided by the savings and loan; nursing or retirement homes and hospital defaults; and the exercise of remedies (including foreclosure and ultimate sale) of real estate projects supporting defaulted revenue bonds.

Project Finance

Our team includes attorneys with deep domestic and international experience negotiating the commercial contracts and financing agreements relating to limited recourse financings for power, petrochemical, infrastructure, natural resources and other projects. We have led the negotiation and documentation of multibillion-dollar projects and five million dollar projects, and we understand how the fundamental principles of project finance need to be applied differently at both extremes and those in between. We have earned a reputation in the industry as being strong advocates, capable “project managers” and skilled drafters who produce documentation that can be understood even by non-lawyers not present during the negotiations. We assist with all stages of a project’s development and financing, including real estate transactional matters, land use and entitlements, environmental permitting, EPC agreements, feedstock or fuel supply agreements, offtake agreements, tax matters, flip partnership agreements, and, of course, credit agreements and security documents.

Bond And Indenture Trustees

Sheppard Mullin has extensive corporate trust experience in the representation of indenture trustees in connection with bond transactions. Although some of this work has entailed the review of documents at the origination stage, most of our corporate trust work on behalf of indenture trustees has focused on the representation of the trustee in connection with defaulted bond transactions. Our familiarity with applicable fiduciary and tax rules, as well as our firm's long standing expertise in the field of creditors' rights, secured transactions and insolvency matters has allowed us to represent bond trustees effectively.

Among the bond default matters handled by our firm, there have been numerous defaults involving Chapter 11 bankruptcy proceedings, Chapter 9 municipal bankruptcies and insurance company insolvency/rehabilitation proceedings, as well as numerous revenue bond defaults involving real estate projects throughout the United States, retirement, assisted living and nursing homes, hospitals, failed savings and loan associations and waste disposal facilities, among other projects. These matters have included restructurings and modifications of bond transactions in negotiated workouts, implementation and exercise of remedies and complex litigation.

DIP Financings

Many organizations that file bankruptcy come out of the process as healthy, feasible businesses. Because bankruptcy should not necessarily be considered a failure or automatically assumed that the organization is headed towards liquidation, part of the turn-around planning process includes the option of DIP financing. Sheppard Mullin negotiates, documents and closes DIP financings subject to the Bankruptcy Code and Chapter 11 requirements. We have advised clients on the structuring, negotiation and documentation of DIP financings.

Commercial Mortgage Backed Securities ("CMBS")

Sheppard Mullin is a recognized leader in the mortgage banking and securitized lending area and is proud to represent many of the leading financial services companies in their ongoing business and legal needs. We are known for drawing on our industry experience, reputation, contacts and understanding to assist lenders and special servicers in developing innovative strategies for achieving their business goals.

Our ability to help our clients achieve their goals is based upon Sheppard Mullin's strategic practice approach. We understand it is important that a law firm not just be an expense line item on an income statement. We strive to be viewed as an important asset to, as well as a trusted advisor in, our client's business. We take pride in our strategic business focused approach, which consistently achieves success as well as cost-effective results for our clients.

In the past few years, our attorneys have seen a significant change in the financial and legal services marketplace, especially for attorneys structuring and documenting transactions for financial institutions. The transactions have become more complex and sophisticated. At the same time, technological innovations have substantially shortened the length of time in which transactions are expected to be documented and closed. The competitive marketplace for our clients has made legal fees and expenses a critical component in the success of our clients even getting the deal. In response to this environment, we have organized our Commercial Lending and Financial Transactions Group with a focus on experience, organization, technology and economy. We believe the combination of these four components allows us to provide superior legal service to our clients at a price and within the time limitations now expected and required in the marketplace.

We have a dedicated Due Diligence Team that focuses solely on providing diligence-related support on corporate and financing transactions. Because of this, they are skilled at reviewing and analyzing documents and agreements produced by target companies and can quickly and cost-effectively prepare diligence memoranda, material issues lists and other client deliverables. The Diligence Team can also proficiently oversee the document production and disclosure schedule preparation process on behalf of sellers, issuers and borrowers. Each time services are provided, the Diligence Team develops an institutional knowledge base that can be accessed for future deals by the same client or in the same industry. The Diligence Team has the ability to ramp up a time-sensitive review in less than a day.

Clients

  • Wells Fargo Bank, N.A.
  • BofI Federal Bank
  • Comerica Bank
  • Woori Bank (Korea)
  • Bank of America N.A.
  • U.S. Bank
  • Toyota Motor Credit Corporation
  • Walker & Dunlop Commercial Property Fund
  • CIT Bank, N.A.
  • Union Bank, N.A.
  • Midland Loan Services
  • LendingTree LLC
  • San Diego County Credit Union
  • Newmark Realty Capital, Inc.
  • NongHyup Bank New York Branch
  • Opus Bank
  • First Foundation, Inc.
  • Citigroup Global Markets, Inc.
  • Citicorp North America
  • Sun West Mortgage Company
  • City National Bank
  • loanDepot.com, LLC
  • Latitude Management Real Estate Investor
  • JP Morgan Chase Bank
  • General Atlantic Service Company LLC
  • Shell Point Financial
  • Pacific Mercantile Bank
  • Skyline Financial Corporation
  • Mechanics Bank
  • Bridge Bank
  • Credit Suisse Securities (USA)
  • Quadrum Group
  • Seacoast Commerce Bank
  • East West Bank
  • Los Angeles County Employees Retirement
  • Stearns Lending, Inc.
  • Marquette Business Credit, Inc.
  • Banc of California
  • Bank of China
  • Capital One, N.A.
  • The Trump Group
  • Signature Bank
  • Silicon Valley Bank
  • MasterCard International Incorporated
  • General Electric Capital Corporation
  • First-Citizens Bank & Trust Company
  • Premier Valley Bank
  • Flagstar Bank
  • Evangelical Christian Credit Union
  • Westamerica Bancorporation
  • Capital Group Companies

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