Practice Areas: Spach, Capaldi & Waggaman, LLP’s partners were trained at some of the nations’ elite law firms; like those firms, we practice at the highest level. But unlike other firms with profession-leading expertise, we don’t allow silos that limit a lawyers’ perspective: Our litigators, all seasoned trial lawyers, also have strong transactional experience. Likewise, throughout their careers, our transactional lawyers have been steeped in the problems and practices of litigation. Each of our services is built around you and the problems you face.
An institutional lender must understand that no loan exists in a vacuum. Instead, it stands atop an unseen mountain of drafting conventions, statutes, caselaw, and bankruptcy practices. Protecting the lender is not just a matter of deal points and documents; it requires anticipating how a borrower will use them to break his contract.
The thousands of lawsuits that followed the recent credit and liquidity crisis revealed loan structuring and document vulnerabilities lenders never knew they had.
The clash between lenders and guarantors over special-purpose-entity provisions and non-recourse carve-out guarantees, for example, revealed where loan documents were weak, poorly worded, or unenforceable. The lender’s counsel who doesn’t understand these court decisions will miss the problems that undermine the foundations of his clients’ business.
Working with new real estate loan documents is like catching a falling sword. Catch it right, and it becomes your weapon to use. But, handle it wrong, and you’ll bleed.
For over twenty-five years, our principals have represented lenders in complex real estate financings and litigation. During the financing boom starting in 2002, we secured the interests of our clients as lending became ever more complicated and competitive. After the credit crunch, we tested the debt and equity structures that we built, worked them to our clients’ advantage, and helped them emerge and grow as the markets recovered.
Spach, Capaldi & Waggaman, LLP uses its experience to protect lenders in a difficult financing environment. We have negotiated and closed hundreds of financing structures with institutional lenders.
The firm’s practice runs across the spectrum of cutting-edge debt arrangements, including construction loans, permanent bank portfolio lending, insurance and pension-fund financing, and CMBS and other securitized loans, through every conceivable equity financing vehicle, from tenant-in-common arrangements, partnerships, and limited liability companies. The firm has mastered the most complex documentary provisions. Few lawyers have negotiated, documented, and closed more loans of so many types as ours. Beyond that, our lawyers understand the special concerns of the many types of borrowers, from large institutions to medium-sized entrepreneurial development groups.
Among other financings and transactions, the lawyers of Spach, Capaldi & Waggaman, LLP have:
THE NEW REAL ESTATE REALITY
Is there any end to real estate’s complexities?
The last credit and liquidity crisis changed everything for developers, owners, and investors. The thousands of lawsuits that followed the downturn, and the vulnerabilities they revealed in older transactions, demand a renewed, intense concentration on deal structures and documentation.
For example, the clash between lenders and guarantors over special-purpose-entity provisions and non-recourse carve-out guarantees has taught lenders to re-engineer those and other terms, leaving them more complex than ever. Today’s property owner, guided by experienced counsel, must have the clearest view of how these will change the foundations of their business.
For over thirty years, our principals have represented developers, investors, and owners in complex real estate financings, developments, and acquisitions. After the credit crunch, we tested the debt and equity structures that we built, worked them to our clients’ advantage, and helped them emerge and grow as markets improved.
You’ve learned to control entitlement risk, development risk, and market risk. Spach, Capaldi & Waggaman, LLP has mastered the legal risks.
SOLVING DEVELOPERS’ PROBLEMS
Our lawyers know intimately each challenge that comes from moving a project from concept to sale. We design sophisticated equity investment structures and assess critical entitlement issues. We solve title problems. As the project moves forward, we work development agreements and incentives with municipalities and put easements in place. When it’s time to build, we negotiate and close construction financing. As the project proceeds, we handle contractors, subcontractors, and mechanics liens. When the certificate of occupancy approaches, we ready master lease forms and negotiate specific retail, industrial, and office leases.
Today, every California development project is a hard one. Spach, Capaldi & Waggaman, LLP knows major projects – and their thousands of legal details – from the ground up.
PROPERTY ACQUISITIONS PRACTICE
We are expert in organizing acquisitions and closings of real estate portfolios and major real estate projects. Our experience ranges from hotels and hospitality, large retail centers, office complexes, and multifamily projects to industrial and warehouse products and hospitals. We know the differing demands of each. Spach, Capaldi & Waggaman, LLP can take control of the entire acquisition process from the letter-of-intent phase, through negotiating and documenting the purchase agreement, policing the due diligence, and managing the buyer and its staff, the seller, lenders, escrow, and title through closing. Few firms have our breadth of experience in executing complex, multi-property, and high-intensity closings.
ACQUISITION ANALYSIS SERVICES
The firm has performed every aspect of legal due diligence for the acquisition of property portfolios and every real estate product type. It knows title review and title policy management, lease review and abstracting, permit, approval, and regulatory compliance analyses, hazardous materials risk mitigation strategies, project file review, building defect issues, and failure-to-disclose disputes. The firm’s attorneys have successfully handled thousands of due diligence issues.
Our experience runs the spectrum of the many equity financing vehicles, from tenant-in-common arrangements, syndications, REITS, partnerships, limited liability companies, and corporations, through every conceivable debt arrangement, including construction lending, permanent bank portfolio loans, insurance and pension-fund lending, and CMBS and other securitized loans. Our lawyers understand the special requirements of each type of lender, including crucial personal recourse and guarantee provisions.
Among other developments, acquisitions, and financings, the lawyers of Spach, Capaldi & Waggaman, LLP have
WE SOLVE REAL ESTATE PROBLEMS
Whether an owner struggles to secure refinancing, a landlord loses a crucial tenant, or a builder carries overpriced housing inventory, all troubled real estate projects have a few things in common: they must preserve value and minimize liability to grow profit. And they need time to do it.
Yet, Spach, Capaldi & Waggaman, LLP knows the solution to every troubled project is different. Each presents its own nuances, differing creditors’ priorities, arcane debt and equity structures, entitlement challenges, and so on. These complexities can be staggering. Spach, Capaldi & Waggaman LLP approaches each situation with the creativity it demands. Our principals have guided clients through three historic downturns; we sharpen that focus on today’s real estate challenges.
We bring foresight to troubled projects, foresight won from our long experience.
CREDITORS’ RIGHTS PRACTICE
The goal of our creditor’s rights practice is always this: Preserve collateral and recover it. However, the firm’s standard for determining success is different than most. We focus on what is critical to the client – the net yield achieved on the distressed collateral. We present to the lender a broader range of options than one sees in the usual contested liquidation, and we attack issues with a business-savvy, multidisciplinary team that can implement the plan. We get a higher yield at a lower cost – with less risk.
The Real Estate Lender. A construction lender is often forced to take possession of the partly-completed residential or mixed-used development that serves as collateral for the loan. These broken projects present a dizzying array of liquidation, completion, and liability challenges that require an experienced hand. The principals of Spach, Capaldi & Waggaman, LLP have worked through these problems many times before. They understand the product, the development business, and the host of regulatory, entitlement, construction, financing, and sales challenges that the lender will face during the liquidation process. We solve real estate problems.
The Asset-Based Lender. The value of an accounts receivable pool and inventory base often evaporates when the underlying business fails, threatening to leave even the well-secured lender with severe losses. In contrast, where the underlying business remains viable during the disposition process, value recovery is far better. For these reasons, our team works to preserve both the collateral base and, as often as possible, the going-concern value of the borrower’s business. We achieve favorable recoveries through external recapitalizations, expedited mergers, and asset sales. Forced liquidations are always and only the last resort.
The Unsecured Creditor. Our principals have represented venture capital funds holding convertible debentures, vendors with trade claims, distressed debt funds owning discounted paper, and other unsecured creditors of every type. In some instances, repayment is the objective; in others, we plan a hostile acquisition. But in each case, the firm has the skill and experience to tailor a legal and business strategy to protect the creditor’s interests.
Strategic Receiverships. Too often, creditors do not consider the receivership option. A receiver is a court-appointed representative who can protect collateral, recover it, and dispose of all or any portion. A receiver can also take control of an insolvent business and sell it. Receivers make sense when a creditor wants to control rents from an income property. In addition, a receiver can preserve value in the following, more unusual, situations:
Spach, Capaldi & Waggaman, LLP has deep creditor and real-estate litigation experience. We intimately understand claims arising from real estate transactions, including lender liability, guarantor liability, fraudulent transfers, and the range of strategies within Chapter 11 proceedings.
WHEN THE CRISIS COMES
For over thirty years, Spach, Capaldi & Waggaman, LLP’s principals have protected developers, builders, property owners, investors, and guarantors in complex acquisitions, challenging sales and financings, foreclosures, acrimonious workouts, and Chapter 11 reorganizations – and in the widest range of sophisticated litigation matters. We understand the real estate industry, its financing options, and the litigation threats inevitable in a failing project.
ASSET PRESERVATION AND LIABILITY MANAGEMENT
Any major real estate project imposes risks on every party involved, not only market, entitlement, and environmental risks, but also the risk of management and investor disputes, liability to lenders, and the inability to refinance or sell the asset. We manage risk for our clients.
Minimizing Owner Risk. Spach, Capaldi & Waggaman, LLP works with owners to maximize their asset’s value, improve cash flow, and reduce debt through the workout process. We engage lenders, trade creditors, and government authorities, and we determine the best strategy, whether restructuring and reviving the business or selling its assists for their maximum value. Our deep experience allows us to present not only effective legal strategies, but practical business solutions.
Individual Risk Management. Owners of construction projects often guarantee loan repayment and project completion. Others may guaranty “bad-boy” carve-out liabilities. They can also face liability claims from investors, trade creditors, homeowners, municipalities, and others who have been promised (or so they say) a successful project. We know the territory. Spach, Capaldi & Waggaman, LLP limits recourse, protects assets, and helps to turn the project around. Most importantly, we plan early and move aggressively.
Defensive Deal Structuring. Liability can be minimized if it is thoroughly anticipated. We work through every deal, build defensive structures, and protect the principals. Then, we plan for the next act: preserving the possibility of profit once the crisis passes. The firm’s principals are expert in designing and negotiating structures that will survive a legal challenge.
Litigation Strategy. Spach, Capaldi & Waggaman, LLP understands the full scope of claims arising from real estate transactions, including those for construction defects, breach of contract and fiduciary duty, guarantor liability, securities fraud, fraudulent transfers, and the entire range of claims arising in Chapter 11 proceedings. Our litigation planning practice emphasizes designing internal procedures for clients that mitigate – or entirely avoid – litigation threats. In addition, Spach, Capaldi & Waggaman, LLP’s planning extends to:
The last credit and liquidity crisis changed everything for TIC sponsors and their investors – and the effects are with us still.
Some of their projects lost crucial tenants. Others struggled to restructure debt, while lenders underwrote collateral far more conservatively than they had only a few years before. All had something in common: They labored to minimize liability and recover value.
INVESTORS VERSUS SPONSORS
Many real-estate projects present staggering challenges, especially given all of the creditors, servicers, bondholders, investors, tenants, and other stakeholders who can apply pressure. This is especially true when TIC sponsors and their investors are at odds. Even within the investors’ group itself, competing interests drive complications that demand special experience. Spach, Capaldi & Waggaman, LLP offers its clients business-savvy legal counsel with the rare ability to anticipate these problems before they arise. During the boom times, we guided sponsors and their TICs as acquisition and financing structures became ever more complicated. During the downturn and beyond, we built on that experience, protected our clients with the foresight sophisticated workouts demand, and, in court, demonstrated our command of the sponsor’s and investors’ competing strengths and weaknesses.
Spach, Capaldi & Waggaman, LLP understands the full scope of claims arising from real estate projects, including those for construction defects, breach of contract and fiduciary duty, guarantor liabilities, securities fraud, fraudulent transfers, and the entire range of strategies available in Chapter 11 proceedings. In addition, Spach, Capaldi & Waggaman, LLP’s practice extends to:
Spach, Capaldi & Waggaman, LLP’s Construction Disputes Group has mediated, arbitrated, and tried a wide variety of commercial and residential construction matters arising from contract disputes, allegations of defective construction, land use (including signage and First Amendment issues), and insurance coverage claims, as well as claims against architects, insurers, accountants, and lenders.
Our work includes victories representing:
In addition to representing general contractors, subcontractors, owners, and developers in a variety of commercial and residential construction matters, Douglas S. Waggaman, one of the firm’s partners, has, for twenty-five years, served as outside general counsel of a San Diego-based general contractor specializing in commercial, institutional, and high-end residential construction and has been a principal in construction and development projects.
The project lease form is the one document at the center of every income property. After the rents, rent adjustments, and other basic deal points, nothing influences success or failure more than the detailed terms of the project lease.
But no lease exists alone. Instead, it stands atop an unseen mountain of drafting conventions, caselaw, and statutes. When problems occur, the outcome depends on how the attorney has navigated that mountain – and how well he or she anticipated problems when the lease was negotiated.
Sooner or later, your lease form will be tried in court, and money will be lost or won. Spach, Capaldi & Waggaman, LLP sees what you don’t.
Our practice focuses on retail, office, warehouse, and industrial leases and extends to ground, build-to-suit, and agricultural leases. On the retail side, we have consummated leases for national fast-food chains, banks, restaurants, and major retailers of every description. Our office leasing practice includes large and medium-sized leases with some of the nation's largest office owners.
On behalf of both landlords and tenants, we negotiate and document sophisticated percentage rent provisions, common-area-maintenance charge allocations, maintenance and repair cost-sharing terms, co-tenancy provisions, indemnities, insurance requirements, subrogation language, build-to-suit terms, work letters, tenant rules and regulations, assignment and subletting conditions, parking requirements, extension and option provisions, guarantees, and others critical terms.
Representative transactions include the following:
REAL ESTATE AND CONSTRUCTION
CORPORATE, PROTECTION OF CORPORATE ASSETS, AND TRADE SECRETS
ENTITY OWNERSHIP DISPUTE