Letter of Credit Redocumentation

• Client: Commercial bank
• Date: Jan 08, 2010
• Location: Chicago, Illinois

Summary:

Schiff Hardin represented a commercial bank in connection with the re-documentation of two letters of credit aggregating $8 million. The redocumentation was done to assure payment of two different issues of first mortgage bonds secured by two office buildings located in Chicago, Illinois following the bankruptcy of the sole tenant of one building.

In one week, our attorneys negotiated, documented and closed amendments to the trust indentures, reimbursement agreements and mortgages to cross-collateralize the two buildings, collect accumulated cash and future rents in the bank's lockbox and implemented a build-out and reletting program.

To preserve tax advantaged financing even if the borrower were to default following the rejection of the lease by the bankrupt tenant, we negotiated a novel "reaffirmation" agreement that provides an incentive to the borrower to "put" the building to the lender in lieu of foreclosure.