Industries: Financial Institutions

A Complicated Industry, Simplified.

Luce Forward represents financial institutions in strategically important transactions and disputes. Luce Forward attorneys are frequent speakers on financial institution board of directors and management issues, loan portfolio management, and mergers and acquisitions transactions. We bring perspective, insight, and many years of experience in banking to clients.

Luce Forward is committed to providing exceptional value-added service to financial institutions in mission-critical planning and transactions. We know bankers and understand the regulators. Clients have improved business results with our help in the following areas:

• strategic transactions including mergers and capital sales
• board and committee advice
• regulatory relations and interpretation
• key vendor relationship
• executive compensation, retention, and transactions
• lending documentation and enforcement
• affiliate and insider regulations

In a complex and evolving regulatory environment, Luce Forward stays at the crest of industry change, delivering proactive, efficient, and personal legal solutions to banks and lenders throughout California. We help banks maximize their loan recoveries, fulfill strategic objectives and handle increasingly complex operational issues.

Mergers & Acquisitions.

Top 10 things you should do now to prepare for the M&A wave:

• set up a M&A Committee
• decide who communicates with the public and potential strategic partners on M&A (not the CEO)
• evaluate the impact of a deal on all compensation arrangements
• keep what happens in the board room in the board room
• make sure you D&O coverage can protect you after a transaction
• address M&A in your strategic plan
• evaluate the impact of a deal on key operations contracts
• clean-up or qualify all problems
• listen to the investment banker and be realistic about pricing
• talk with regulators early in the process about any potential deals

Vendor Exposure.

We ensure that clients understand and negotiate favorable changes to the onerous provisions in back office contracts such as clauses that:

• require payment of the full term of the contract on early termination
• disallow termination and do not provide liability for extended down-time or failures
• only vaguely describe support commitments that are difficult to enforce, such as time to respond to down-time for failures
• add costs for minor improvements and upgrades
• limit damages to the amounts paid to the vendor even if the results are catastrophic to the financial institution
• disclaim any liability for things done by the vendor unless it can be proven in court that the vendor is liable
• address service being interrupted if the vendor is sued by a third-party for breach of intellectual property rights
• restrict assignment of the contract even if the financial institution is sold
• exculpate the vendor from liability for anything involving a third party provider, even if the third party provider is proposed or required by the vendor

Loan Work Outs.

We ensure that clients learn the secrets to “best case” loan work outs, including:

• the loan officer who made the loan should not be involved in the workout
• tough enforcement may not be the best choice, although it is the easiest choice
• if there is any potential that a bank employee or other affiliate of the bank is personally involved with the borrower or with the borrower’s business, investigate immediately
• to protect against regulatory scrutiny, have troubled loan identification and processing procedures reviewed by an independent third party
• before starting foreclosure proceedings, talk to an attorney about the impact on guaranties and personal property collateral
• understanding the impact on loan loss reserves and loan loss allowance in each step in the workout process

Loan Enforcement.

We ensure that clients understand and take advantage of their loan enforcement rights and remedies where litigation becomes necessary, including:

• assisting the lender to navigate through the requirements of a non-judicial foreclosure / trustee’s sale
• pursuing guarantors for breached obligations through litigation and provisional remedies, such as writs of attachment
• bringing judicial foreclosure actions and pursuing deficiency judgments against borrowers
• seeking the appointment of a receiver to complete a failed construction project or to take control of an existing business or income property
• in the event of a bankruptcy filing by the borrower or guarantor, providing the financial institution with advice and guidance on how to protect its interest in its secured collateral and the bankruptcy proceeding
• defending lenders against lender liability claims brought by borrowers

Construction Disputes.

We ensure that our clients understand and take advantage of their loan enforcement rights and remedies where litigation becomes necessary, including:

• assisting the lender to navigate through the requirements of a non-judicial foreclosure/trustee’s sale
• pursuing guarantors for breached obligations through litigation and provisional remedies, such as writs of attachment
• bringing judicial foreclosure actions and pursuing deficiency judgments against borrowers
• seeking the appointment of a receiver to complete a failed construction project or to take control of an existing business or income property
• in the event of a bankruptcy filing by the borrower or guarantor, providing the financial institution with advice and guidance on how to protect its interest in its secured collateral and the bankruptcy proceeding
• defending lenders against lender liability claims brought by borrowers

REPRESENTATIVE MATTERS

• Represented Security Business Bancorp in its sale of $5.8 million of preferred stock to the U.S. Department of the Treasury under its Capital Purchase Program. Security Business Bancorp is the parent company of Security Business Bank of San Diego, a community bank operating three San Diego locations.
• Represented 1st Pacific Bancorp in its acquisition of Landmark National Bank. 1st Pacific Bancorp is the parent company of 1st Pacific Bank of California, a community bank operating seven San Diego locations.
• Represented numerous community banks in their formation, regulatory approvals with the DFI, FRB, FDIC, and OCC and in all legal aspects of raising capital.
• Assisted in a workout transaction relating to the restructuring and extension of a $115 million loan secured by a hotel property. As part of the transaction, client obtained a $15 million junior loan as well as approximately $20 million of additional equity investment.
• Represented client in the workout of 29 mostly real estate secured loans totaling approximately $180 million to affiliated California and Nevada homebuilders, including the negotiation and documentation of discounted payoff agreements and loan sales agreements, loan restructure modifications and new working capital and accounts payable loans to the borrower, handling the foreclosure of several of the loans, and representation in the bankruptcies of certain of the guarantors.
• Represented clients in numerous loan restructurings for loans originated by lenders such as Citigroup, GE, Bank of America. and Morgan Stanley Mortgage Capital, Inc.
• Represented large savings and loans in commercial real estate debt restructuring, receiverships, and foreclosures in Southern California, covering over 250 loans.
• Represented a purchaser in the acquisition of a master-planned community from a Chapter 11 case, including confirmation of the creditor’s plan of reorganization.
• Represented a foreclosing lender on residential subdivision issues in a “broken” condominium conversion project related to a bulk sale of the remaining units.