presents presents Receiverships: An Effective Remedy for Distressed Commercial Real Estate Maximizing Property Values and Minimizing Legal Risk Through Court-Appointed Receivers A Live 90-Minute Teleconference/Webinar with Interactive Q&A A Li 90 Mi t T l f /W bi ith I t ti Q&A Today's panel features: Richard T. Arrowsmith, Senior Vice President, Special Assets Group, GE Capital, Healthcare Financial Services , Bethesda, Md. Thomas A. Seaman, CFA, Principal, Thomas Seaman Company , Irvine, Calif. , , p , p y , , Daniel Brozost, Partner, Raines Law Group , Beverly Hills, Calif. Thursday, September 9, 2010 The conference begins at: The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 10 am Pacific P ifi You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrants.
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RECEIVERSHIPS: AN EFFECTIVE REMEDY FOR DISTRESSED C OMMERCIAL REAL ESTATE Maximizing Property Values and Minimizing Legal Risk Through Court- Appointed Receivers Webinar Panelists: • Rick Arrowsmith – GE Capital • Thomas Seaman – Thomas Seaman Company • Daniel S. Brozost, Esq. – Raines Law Group LLP September 9, 2010 Thomas Seaman 4 Company
Rick Arrowsmith Rick is a Senior Vice President in the Special Assets Group of GE Capital, Healthcare Financial Services, a premier provider of financing to the healthcare industry with focus areas in Corporate Finance, Real Estate and Life Sciences. In this capacity, he is responsible for all aspects of loan workout and restructuring. Rick is also the GE Capital, Healthcare Financial Services instructor for “Problem Loan Management and Workout Process Overview”, an internal Risk training class that he co- g , g developed. He also co-instructs the “Problem Loan Detection” class and other risk management training classes. Prior to his current role Rick was a Vice President at First Union responsible for a portfolio Prior to his current role, Rick was a Vice President at First Union responsible for a portfolio of subperforming and non-performing commercial real estate loans. He joined GE through the acquisition of Heller Financial in 2001 and subsequently led a quality project to ascertain the root causes of problem loans that resulted in green belt certification in 2004. Rick received his Bachelor of Science degree in Finance from University of Maryland, in College Park, MD. He also received a Master of Science degree in Real Estate and Urban Development from American University in Washington, D.C. eve op e o e c U ve s y W s g o , .C. 5
Thomas Seaman Thomas A. Seaman is a Judicial Receiver and Principal of Thomas Seaman Company, which assists him in the execution of his duties as a court appointed fiduciary. Thomas Seaman Company provides business management services in civil matters which require a neutral third party to serve p g q p y as receiver, referee, provisional director, or administrator. Thomas Seaman Company has the capability to manage and administer a broad range of asset classes including operating companies, financial assets, real property and construction projects. Mr. Seaman has over 30 years of business experience both in private industry and as a court- appointed fiduciary. He is a former CFO and Controller, and is a Chartered Financial Analyst i t d fid i H i f CFO d C t ll d i Ch t d Fi i l A l t (CFA). Mr. Seaman entered the insolvency arena in 1989 and has served has receiver in over 175 matters since formation of Thomas Seaman Company. He has operated distressed businesses that were the subject of a State Court Receivership, Chapter 11 Bankruptcy estate, Federal regulatory action, partnership dispute, partition action, dissolution proceeding, probate matter, or in other litigation requiring a fiduciary. Thomas Seaman Company has operated companies in numerous industries including real estate, manufacturing, construction, healthcare, assisted living, service, i d t i i l di l t t f t i t ti h lth i t d li i i hospitality and others. Mr. Seaman is experienced at seizing assets, stabilizing operations, and formulating & implementing business solutions. Mr. Seaman earned a Bachelor of Science degree in Finance from the University of Illinois in 1979 and was awarded a CFA charter in 1993 Mr Seaman’s firm is licensed by the State of 1979, and was awarded a CFA charter in 1993. Mr. Seaman s firm is licensed by the State of California as a Registered Investment Adviser and as a California Real Estate Broker. He is a member of the Institute of Chartered Financial Analysts, the Los Angeles Society of Financial Analysts, the California Receiver’s Forum, and the Orange County Bar Association, as a non- lawyer. Thomas Seaman 6 Company
Daniel S. Brozost, Esq. Dan is a partner at Raines Law Group LLP, with a practice focused p p , p primarily on transactional real estate matters, including asset and real property acquisitions and dispositions, finance, commercial leasing, formation and structuring of joint ventures, investment funds, syndications and other investment entities and private placements of debt and equity securities Dan represents a wide placements of debt and equity securities. Dan represents a wide range of clients, including real estate investment funds, developers and syndication groups, institutional landlords and asset managers, commercial lenders, receivers, hedge funds, private equity investment firms, entrepreneurs and high-net worth families and g i di id individuals. l Dan received his undergraduate degree from Cornell University, with a concentration in Industrial and Labor Relations. He received his Juris Doctorate from the University of Virginia School of Law. Prior to joining Raines Law Group LLP in 2007, Dan worked in the Los Angeles offices of Latham & Watkins LLP and Allen Matkins Leck Gamble Mallory & Natsis LLP. 7
Definition of Receiver Definition of Receiver “A receiver is a ministerial officer, agent, creature, hand or arm, and temporary occupant and caretaker of property for, the court. And he represents the court appointing him, and he is the medium through which the court acts.” Pacific Indep. Co. v. Workman’s Compensation Appeals Bd., 258 Cal. App. 2d 35 W k ’ C ti A l Bd 258 C l A 2d 35 (1968) Receivership is an equitable remedy imposed by a court where a neutral third-party takes possession of real and personal property to prevent deterioration, waste or dissipation in value of that property. A receiver holds assets for the court and not for the plaintiff or p the defendant. 8
Types of Receiverships Types of Receiverships Real estate/rents and profits Operating companies Judgment enforcement Protection of property Marital disputes Environmental remediation Regulatory 9
Basis for Appointment Basis for Appointment Statutory Specific to government agencies or industries, such as SEC receiverships or those relating to insolvent insurance companies and bank or other thrift insurance companies and bank or other thrift institutions. Equity Equitable remedy imposed by a court in which an action or proceeding is pending, such as (a) a breach of contract action (b) an action by a lender breach of contract action, (b) an action by a lender for judicial foreclosure, or to enforce an assignment of rents provision, or (c) an action to enforce a j d judgment. t 10
Fiduciary Duty Fiduciary Duty A receiver is a fiduciary, which means he/she owes duties of good faith and loyalty to the court and to the parties that hold claims against the receivership estate against the receivership estate. A receiver must not favor one creditor over another, engage in self dealing, or take any action that is not in the best interests of the receivership estate. Cal Rule of Court 3 1179(b): The receiver may not enter into any Cal. Rule of Court 3.1179(b): The receiver may not enter into any contract, arrangement, agreement, or understanding with the appointing party concerning: (1) The role of the receiver with respect to the property following termination of the receivership, without specific court g p, p permission; (2) How the receiver will administer the receivership or how much the receiver will charge for services or pay for services to appropriate or approved third parties hired to provide services; (3) Wh (3) Who the receiver will hire, or seek approval to hire, to h i ill hi k l hi perform necessary services; or (4) What capital expenditures will be made on the property. 11
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