Restructuring Advisory

Receivers recover repayment from property sale

FRP achieves sale in challenging market for secured lender

Background

A lender had a loan secured against a freehold property in central London. The property was held in an offshore trust, which had bought the property and redeveloped it, intending to sell it on.

However, the property had not been sold, and with the remaining structures in the trust illiquid, the debt to the secured lender was not being serviced.

Despite ongoing negotiations, the loan remained unpaid, so the lender sought to enforce its security to realise the property and recover its lending. FRP was appointed as receivers over the property.

Action

As receivers we took immediate steps to secure the vacant property, and to manage the key relationships between the lender and the trustees, in an effort to achieve an outcome that worked for all parties.

Discussions took place with the trustees to determine whether there was a possibility of a refinance, but when these discussions were exhausted the receivers looked to take the property to market. Our team worked to pull together all of the information relating to the property and its redevelopment, to ensure full documentation was available to the purchasers.

When the property was marketed it attracted numerous offers; one was accepted subject to contract, but the beneficial owner suggested they would take steps to injunct the receivers from selling. An expert witness piece of work was carried out to review the receivership, which found that a robust realisation strategy had been employed; as a result of this report, the receivers proceeded with the sale.

Outcome

Following the conclusion of the sale the lender was fully repaid, along with a termination fee and all associated costs. The relationship between all the professional parties and stakeholders involved was also preserved, thanks to the ongoing liaison that had taken place during the engagement. The result for the secured lender was particularly positive, given the very challenging central London property market at the time.

The lender was fully repaid, along with a termination fee and all associated costs Chris Stevens Restructuring Advisory

Related team

Chris Stevens

Chris Stevens

  • Partner
  • Restructuring Advisory
  • Brighton

Clare Vickers

Clare Vickers

  • Assistant Manager
  • Restructuring Advisory
  • Brighton