• A boutique oceanfront developer in southern California with a successful history building luxury homes, was saddled with excess real estate inventory caused by the sudden downturn in the economy. One particular troubled development, an exclusive community of five luxury beachfront condos, lacked buyers and faced a maturity default on its construction loan.
• The developer had initially invested several million dollars in equity and had taken out a construction loan for $6.1 million. When sales froze in the aftermath of the financial crisis, the developer approached his bank hoping to reduce his interest rate and modify his payments to a level that he could manage.
• Negotiations with the senior management at the bank went on for months to no avail. The developer, conscientiously trying to stay current with the bank while simultaneously trying to preserve his credit, borrowed from other assets and personal reserves to meet his obligations. Tired of the endless promises and broken offers from the bank to help him, and having depleted his own personal resources, he finally turned to Breakwater Equity Partners for advice on a commercial loan workout.
• Immediately the team at Breakwater took control of the situation, taking over negotiations with the bank and reassuring the developer that the worst was over. Breakwater ultimately discovered lender misconduct, which exposed the bank to a tort liability. Using the litigation, economic, and bankruptcy leverage points it had uncovered through its due diligence process, Breakwater then entered into intense negotiations with the lender which eventually resulted in a favorable outcome for the developer.
• Breakwater was able to write down the debt by $1.9MM and bring in a friendly third party "white knight" investor to purchase the remaining note for $4.2MM. The developer avoided bankruptcy and the bank released him from his personal guarantees.

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