Lenders Try to Prevent Chapter 11 Filings, Prefer Foreclosure

Traditionally, large commercial real estate loans have been non-recourse, meaning lenders can look only to their collateral in the event of a default. Increasingly, lenders are implementing contingent personal guarantees into loan agreements which bring a developer’s personal assets into play if they behave “poorly.” “Bad boy” acts often center around “milking” a distressed property…