Real Estate Bankruptcy
Facing Real Estate Bankruptcy? It can be a difficult and stressful experience. We advocate for our clients’ best interests.
What’s Ahead for New York Developers, Investors, and Lenders
With the ongoing uncertainty in the real estate market, many New York developers, investors, and lenders are wondering what's ahead in real estate bankruptcy. No one has a crystal ball to definitively predict the future, but change is coming. As the market experiences rapid shifts, it’s no longer acceptable to apply boilerplate solutions to complex cases. It’s crucial to have experienced real estate bankruptcy attorneys who understand the current state of the market, as well as the historical significance of past real estate crashes.
Make sure you’re equipped with as much information as possible so you’re not caught unprepared when the bubble bursts.
Jacobs PC has consistently been at the forefront of real estate law, advocating for its clients’ best interests.
With several new additions, the firm is even better equipped to address the multifaceted challenges of the real estate world. Three new partners joining Jacobs PC include:
Mitchell G. Mandell, Senior Partner — Renowned in the real estate legal community, Mandell brings nearly four decades of expertise in property litigation and transactions. His keen sense of strategy and negotiation will be pivotal for clients navigating the predicted downturn.
Mandell has vast experience handling commercial litigation, employment matters, and corporate transactions in a wide variety of industries—including financial services, healthcare, investment and commercial banking, technology, artificial intelligence, robotics, venture capital, manufacturing, entertainment, and apparel.
Lewis S. Fischbein, Partner — A specialist in commercial litigation, Fischbein has more than 45 years of experience in prosecuting and defending actions involving complex business, RICO, corporate, contract, securities fraud, employment, entertainment, and real estate disputes.
Wayne M. Greenwald, Senior Counsel — Greenwald has been focused on debtor-creditor law for more than 30 years. He was the assistant chair of the Defense Research Institute’s Special Litigation Group on Creditors’ Rights and Bankruptcy. He formerly served as co-chair of the American Bankruptcy Institute’s commercial fraud task force.
With a focus on bankruptcy and creditors' rights, Greenwald is well-poised to advise clients on the intricate financial challenges that a real estate bust might bring. His deep understanding of financial intricacies is a significant advantage for the firm.
Understanding Real Estate Bankruptcy
Definition and Types of Real Estate Bankruptcy
Chapter 7 is a liquidation bankruptcy that is designed for individuals or companies who are unable to pay off their debts. In this type of bankruptcy, the debtor's assets are sold to pay off their creditors. In contrast, Chapter 11 is a reorganization bankruptcy that is designed for businesses that want to restructure their debts and continue operating.
Factors Contributing to Real Estate Bankruptcy
1) Economic Downturns and Market Fluctuations
Recessions or financial crises can have a significant impact on the real estate industry. Market fluctuations can also make it difficult for real estate owners to maintain their properties and attract tenants. Changes in consumer preferences or demographic shifts can make certain properties less desirable, leading to vacancies and decreased rental income.
2) Over-leveraging and Debt Mismanagement
Over-leveraging occurs when property owners take on too much debt relative to their income or the value of their New York properties. Debt mismanagement can occur when property owners do not keep track of their finances or fail to make timely payments on their debts.
3) Legal and Regulatory Changes
Changes in property zoning laws may make it difficult for property owners to use or sell their properties. Additionally, unexpected legal issues such as lawsuits, liens, or environmental concerns can also lead to financial difficulties for property owners.
Closing Thoughts on Real Estate Bankruptcy
Real Estate Bankruptcy can be a difficult and stressful experience, but it can also be an opportunity for a fresh start.
By understanding factors contributing to bankruptcy, and taking steps to mitigate their impact—particularly working with an experienced bankruptcy attorney—New York property owners can better protect themselves from bankruptcy and ensure the long-term success of their real estate investments.