Strategic Workouts. Practical Resolutions. Minimizing Loss, Maximizing Recovery.
At Neubert, Pepe & Monteith, P.C., we deliver sophisticated, results-oriented resolution services to lenders, financial institutions, and creditors facing non-performing loans, borrower defaults, and credit-related disputes. Properly structured settlements are often the most efficient and commercially sound alternative to litigation, preserving valuable business relationships, minimizing enforcement risk, and expediting recovery.
Our attorneys provide strategic counsel and implement a full spectrum of out-of-court and litigation-adjacent resolutions. Every engagement is approached with a pragmatic mindset and tailored to the specific facts, risk profile, and business objectives of the client.
Our Settlement and Workout Services Include:
Strategic Evaluation of Workout Options
Effective workouts begin with a clear understanding of legal exposure, collateral position, and financial viability. We evaluate the legal, practical, and financial merits of potential resolution strategies, analyzing collateral, guarantees, enforcement viability, bankruptcy risk, and cost-benefit considerations, to recommend the most practical and enforceable path forward.
Example: In a distressed real estate loan involving significant bankruptcy risk, we recommended a deed-in-lieu transaction coupled with a limited release to avoid litigation and mitigate potential cramdown exposure.
Loan Modifications
Modifying loan terms can restore performance while strengthening the lender’s collateral position and legal rights. We assist lenders in restructuring performing and non-performing loans to improve repayment viability while preserving lien priority, enforcement rights, and guarantor obligations.
Example: We negotiated a five-year extension on a maturing loan, added a personal guaranty, and increased the interest rate to strengthen collateral coverage and mitigate lender risk.
Negotiated Settlements of Defaulted Obligations
Settlements offer an efficient path to resolution without protracted litigation or enforcement delays. We engage directly with borrowers, guarantors, and their counsel to resolve loan defaults through structured settlements, ranging from lump-sum payoffs to tiered repayment plans.
Example: A borrower defaulted on a $250,000 equipment loan. We negotiated a $225,000 lump-sum payoff, secured by personal guaranties, with a waiver of the remaining balance contingent on timely payment.
Drafting and Structuring Settlement Agreements
Well-drafted agreements are essential to enforceability and long-term risk mitigation. We prepare customized, enforceable settlement documents, including stipulations to judgment, releases, payment terms, default remedies, and indemnity provisions.
Example: In a multi-party loan default, we structured a comprehensive settlement incorporating a stipulated judgment, a tiered payment schedule, and an assignment of insurance proceeds as additional collateral.
Forbearance Agreements
Forbearance can preserve relationships and provide breathing room when properly structured. We structure forbearance agreements that defer immediate enforcement while imposing defined borrower obligations, reaffirmations of debt, and clear default triggers, preserving the creditor’s rights and enabling swift action in the event of noncompliance.
Example: A commercial tenant defaulted on lease obligations. We negotiated a 90-day forbearance agreement requiring partial payments, delivery of updated financial disclosures, and an automatic right to judgment in the event of default.
Deed in Lieu of Foreclosure
When foreclosure is costly or impractical, a deed-in-lieu provides an efficient alternative to recover title and reduce exposure. We facilitate deed-in-lieu transactions to recover real estate collateral through voluntary transfer, securing clear title and appropriate releases while minimizing junior lien exposure, avoiding litigation and delay.
Example: A borrower defaulted on a $1 million loan secured by office property. We negotiated and completed a deed-in-lieu transaction, secured clear title, and avoided the time and expense of foreclosure proceedings.
Friendly (Consensual) Foreclosure
A cooperative foreclosure can expedite resolution and reduce enforcement costs while preserving creditor remedies. We guide creditors through cooperative foreclosure proceedings in which borrowers agree not to contest the action, thereby expediting judgment and minimizing legal fees, typically in exchange for deficiency waivers or extended transition periods.
Example: A borrower consented to foreclosure in exchange for a partial deficiency waiver and extended occupancy, streamlining the proceeding and significantly reducing litigation costs.
Stipulated Judgments
Stipulated judgments provide certainty, enforceability, and reduced litigation risk. We obtain stipulated judgments that eliminate the need for trial and provide immediate enforceability upon borrower default, streamlining recovery and reducing litigation costs.
Example: Following settlement of a working capital loan default, we secured a stipulated judgment. Upon the borrower’s subsequent default, we enforced the judgment without the need for further litigation.
Release and Waiver Agreements
A complete settlement requires a final release to eliminate residual liability and future claims.
We prepare comprehensive release and waiver agreements that eliminate post-settlement exposure, protecting creditors from future borrower or guarantor claims, including lender liability defenses.
Example: Following a discounted payoff, we prepared a mutual release that extinguished all lender liability claims and barred any future litigation.
Collateral Surrender and Liquidation Agreements
When repayment fails, coordinated surrender and liquidation can maximize collateral value and minimize delay. We negotiate the voluntary surrender of secured assets and coordinate collateral liquidation through auctions, recovery agents, or third-party resellers to maximize debt recovery.
Example: A borrower voluntarily surrendered a fleet of vehicles. We coordinated a third-party auction, securing substantial recovery while avoiding the costs and delays of litigation.
Strategic, Business-Aligned Resolutions
Our attorneys bring decades of experience representing creditors throughout Connecticut in crafting timely, effective resolutions. We work in close coordination with our clients to ensure that legal strategies align with broader business objectives.
Whether addressing a non-performing loan, borrower litigation threats, or deteriorating collateral value, our team acts decisively to mitigate losses, preserve viable relationships, and position our clients for maximum recovery, without delay and without compromise on enforceability.