I probably would have named it something besides Super Lawyers, but since the selection process has been blessed by courts and bar associations, I’ll just humbly accept the honor and not grouse about the details.

How Super Lawyers decides

After a three-step nomination and screening process, Super Lawyers magazine chooses honorees on an annual, state-by-state basis. The research team undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by the attorney-led research staff, a peer review of candidates by practice area, and a good-standing and disciplinary check. Only five percent of the total lawyers in the state are included in Super Lawyers.

What’s it mean that I’m on the list?

Super Lawyers is intended to be a resource to help in the selection of legal counsel. As such, it limits the list to attorneys who can be hired and retained by the public, i.e., lawyers in private practice and Legal Aid attorneys.  The magazine makes a  comprehensive, good-faith and detailed attempt to produce a list of lawyers that have attained high peer recognition, meet ethical standards, and have demonstrated some degree of achievement in their field. The Super Lawyers site is searchable by state and practice area.

All that being said, if you need to hire an attorney,  do your own homework

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In the case of Charlotte’s Epicentre, a stop work order strangled cash flow for both the developer and the contractors. We’re still seeing clients whose financial difficulties began there and snowballed.

What’s a sub to do?

Before you let the lack of cash flow drive you to close your business, consult with an attorney about your options.  If filing a mechanic’s lien makes sense in your situation, the lien will attach to the property and structures and prevent the property owner from obtaining a clear title.

What we see in 2010

I was recently asked what’s different about the things contractors are telling me this year versus last? I replied that the only difference this year is numbers; the builders developers, subcontractors and materialmen we’re seeing tend to be higher end, who have been able to hold out longer (due to cash reserves, some cash flow, remodeling work, etc.). The assets are bigger and the liabilities are too. Same basic problem, though: the housing industry has tanked, with no real hope for improvement anytime soon, and what wealth these clients had is tied up in real estate that is often not worth what they paid for it.

We have some clients with decent remodeling income and some who are finding work with national or large regional builders, but many are seeking bankruptcy counseling and filing for bankruptcy protection. They don’t want to do it, but they have no choice.

Because so many contractors co-mingle business and personal finances, untangling the business from its owners can be messy. Consulting with a firm that has both bankruptcy and construction expertise is an important first step toward resolution.

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It’s human nature to try to help a client, but sometimes the advice given by someone with no bankruptcy training can do the person in financial distress more harm than good.  People who’ve received advice from a trusted advisor are likely to trust what they say even when it’s incorrect.  My law partner and I spend an inordinate amount of time debunking the so-called common knowledge that our clients walk in with.

This is why I hope to see a full house at the March 1 seminar I’ll be teaching with two other bankruptcy lawyers, “Nuts and Bolts of Bankruptcy Law.”

The course will begin with the fundamentals of various bankruptcy chapters and their subsequent procedures of filing and litigation. Additional topics in the seminar to include: administering the means test and permitted exceptions; understanding the duties for debtor’s counsel and the rules governing bankruptcy petition preparers; how to create Chapter 13 repayment plans that satisfy creditors and clients; converting a Chapter 13 to a Chapter 7 is permitted; and conducting and analyzing client intake interviews. The seminar will carry continuing education credit for Continuing Legal Education, Institute of Certified Bankers, International Association for Continuing Education Training and National Association of State Boards of Accountancy.

Held on March 1, 2010 from 9:00 – 4:30pm at Doubletree Hotel, 2600 Yorkmont Road, Charlotte, NC, seminar details available through: National Business Institute, 
PO Box 3067 Eau Claire, WI 54702, 
Phone: 800-930-6182, or 
email:customerservice@nbi-sems.com

Press release: Spikes in Bankruptcy Filings Drives Demand for Bankruptcy Law Seminar

If you want to dispense valid information about bankruptcy, get training from a certified provider.

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Charlotte’s 210 Trade files Chapter 7 Bankruptcy

In case you missed my 2-second TV debut last week on WSOC, here’s a link to what I said about the 210 Trade condominium bankruptcy filing when the reporter asked if buyers were likely to be refunded their earnest money.

Lenders Pulling Plugs

I’ve commented twice on lenders foreclosing on commercial loans at the first sign of difficulty instead of taking a wait-and-see approach.

Last week the story in question surrounded condo developer Ray “Rip” Farris III, who sued his lender, First Horizon Home Loans, and parent company, First Tennessee Bank National Association.  Mr Farris claimed that the companies acted in bad faith when they stopped paying on a $24.4 million loan.

My quote, “You’re free to sign away your life, and you’re free to reap the benefits,” made it into the paper, but it seems a bit obscure.

The quote referred to lending agreements that contain all sorts of terms that give lenders an open door to call loans and push harsh terms on borrowers. Either-do-this-or-we-call-your-loan type terms. Of course, the guarantees make the individuals liable. We are seeing some nutty stuff from banks that have decided to get out of land loans and don’t care who they run over to do it.

I think the reporter cleaned up my original statement, which was  probably more like,

“We have freedom of contract. That means that we have freedom to make a great deal for ourselves, and we have freedom to make damn fools of ourselves.”

More on the story: Sometimes, depending on the facts of the case, I advise clients not to sue their lenders because such cases are difficult to win in NC, where banks hold great sway with the legislature. NC laws favor financial institutions, which means pursuing a case against one can cost millions and result in nothing more than wasted money. I had a builder, who is going through foreclosures and trying his best to salvage what he can with work outs, tell me recently that when this is over he would have a large number of new friends but that none of them would be bankers.

Cornelius Foreclosure

In case you missed this story, a huge project, Augustalee, in Cornelius, NC, was foreclosed by its lenders because it hadn’t met key project milestones. NOT because the developers had missed payments.

Foreclosing when the Loans are Current

Since I originally wrote about the story, The Observer has reported updates on the story, including the most recent news that the original developer has been replaced after a foreclosure auction. The mezzanine lender said the foreclosure resulted from “the borrowers’ failure to satisfy certain milestones and inability to raise additional capital needed to complete the project, including the financing of certain infrastructure and required offsite improvements.”

The developer countered in a lawsuit that the mezzanine lender promised to lend $23.5 million but paid only $19.5 million. Shortly after the fund failed to pay the remaining $4 million, the developers’ senior lender started to foreclose.

If you have business loans, I recommend reviewing them with a qualified attorney. Your legal counsel will identify possible triggers in the agreements that lenders could use to call your loans or foreclose. Lenders have legal departments to guide them in protecting their interests. You need a lawyer to help you protect yours.

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