This course is designed as an intensive examination of the financial, legal and strategic problems one might encounter in a financially troubled commercial real estate project. The primary focus of this course is the financing of real estate. Broader issues related to contracts for the sale of land, transfer of land title, environmental regulation and liability, insurance, and the like are left to the Real Estate Transactions course and real estate courses offered in the Business School. Students who have taken or are planning to take those courses should find that the courses complement, rather than duplicate, each other. We will begin with a general overview of the economics of commercial real estate and the most commonly used financing arrangements, the law of mortgages, and the federal bankruptcy laws. The fifth week of the course will mark a sharp change in course format. The balance of the course will be spent taking an in-depth look at the legal, financial and strategic options available to real estate lenders and real estate operators under the federal bankruptcy laws. We will consider these issues in the context of a “Master Problem” originally created by a partner at King & Spaulding in Atlanta. The Master Problem is an amalgamation of the issues raised in several actual commercial real estate banrkuptcy and workout cases. I use the problem method because it allows the class to consider not only what the law is and how it might apply, but further to consider its usefulness in practice and the strategic implications raised by the law. In furtherance of this approach, students will be assigned to “firms” representing different parties in the restructuring, and will be asked to discuss arguments, counterarguments and possible strategies on behalf of their “clients.” The primary focus of the latter portion of the course is the federal bankruptcy laws. This is not because all, or even most, real estate restructurings are done under the bankruptcy laws or in bankruptcy court. They aren’t. Rather, bankruptcy proceedings are the forum of last resort, where debtors go when other efforts at reaching a consensual resolution have failed. Bankruptcy law is important because restructuring negotiations take place in the shadow of bankruptcy law; where the parties reach an accommodation because compromise is prefererable to the likely outcome in bankruptcy. Moreover, choices made by counsel and clients at the inception of the transaction (and long before any sign of financial problems) can signficantly limit or enhance the strategic options available if the project does run into financial trouble later. As we discuss the legal issues facing Pleasant Point Apartments and its creditors, we will also consider ways in which planning could have enhanced the parties’ legal positions. Prerequisites: There are NO prerequisites for this course. Examination: Your grade in this class will be based exclusively on your performance on a take-home final exam. We will spend approximately eleven weeks of the semester discussing various aspects of the Master Problem involving Pleasant Point Apartments. The final will require you to prepare written analyses of several aspects of that same Master Problem. The best way to prepare for the examination is to regularly prepare for and attend class.