WHEN THE BORROWER DEFAULTS . . .

A. MICHELLE (SHELLI) WILLIS

shellli.willis@troutmansanders.com

Troutman Sanders LLP

Bank of America Plaza

600 Peachtree Street NE, Suite 5200

Atlanta, Georgia 30308

(404) 885-3000

www.troutmansanders.com

September 5, 2008Sponsored by Law Seminars International

A. Review loan documents and fileB. Assess agreements with third partiesC. Bankruptcy analysisD. Receivership analysis

E. Confirm proper payment of intangible taxesF. Evaluate Access to InsuranceG. Evaluate Third Party AgreementsH. Title and Lien Searches and Analysis

I. Assess the Situation

II. Next Steps

A. Forbearance or loan modification

1. “Wait and see”

2. Proceed to documentation now

B. Foreclosure

C. Alternatives to foreclosure

1. Deed in lieu of foreclosure agreements

2. Suit on note and/or guaranty

III. Forbearance or Loan Modification

A. Business Reasons for “Wait and See” or Modification of Loan Documents

B. General Legal Considerations:1. Conditions Precedent; Timing2. Documentation3. Title and Priority Matters4. Other Parties to Transaction

C. Bankruptcy Issues; Relief from Stay

A. Acceleration letter; Attorneys’ 10-Day letter

B. Federal Tax Liens

C. Update title and Bankruptcy records checked

D. Appraisal (as of the date of foreclosure)

E. Physical Inspection or updated survey

F. Environmental Issues

IV. Foreclosure

IV. Foreclosure (Cont.)

G. Foreclosure Notice

H. Deed Under Power of Sale and Other Documents

I. Foreclosure Sale and Beyond

A. Pre-workout agreement and deadlineB. Consider commencing foreclosure as leverageC. Confirm borrower has authorityD. Identify and evaluate any subordinate liensE. Avoid common law mergerF. Transaction voluntary at transferG. Consider likelihood Bankruptcy Court might view

deed-in-lieu as a preference or fraudulent transferH. Ensure adequate title insurance protection

V. Deed-in-Lieu

VI. Suit on Note or Guaranty

A. Decide where to sue- state v. federal court, which jurisdiction

B. Timing Considerations on Guarantor Suit

C. Impact of arbitration clauses