Greg Yates Quoted in Law360
"Real Estate Cases To Watch In 2012"

Seyfarth Shaw Litigation partner Greg Yates was quoted January 1 in a Law360 feature examining cases expected to be hot topics in real estate litigation circles in 2012.

Greg suggested keeping an eye out for more aggressive moves by debt investors involved in bankruptcy proceedings. Typically, junior mezzanine lenders are stuck in the back of the line during bankruptcy proceedings, but as more private equity and hedge funds have purchased debt, Greg expects that role to change.
 

"These lenders are very aggressive," he notes. "They can file an involuntary bankruptcy to get some leverage and all of a sudden, they've got their nose under the tent and are calling the shots."
 

Greg also suggested 2012 could see a sharp increase in banks filing lender liability cases against developers unable to repay building loans. In the last two years, banks have given developers more time to pay off loans, which has allowed the banks to avoid taking balance sheet hits. Stronger bank balance sheets in 2012 may mean tougher loan policies to come, however.
 

"Banks are a lot stronger than they were two or three years ago," Greg said. "They're going to start being aggressive in going after these loans, and I think you'll see a lot of litigation come out of that."