Mezzanine Lenders and Foreclosure Sales During COVID-19

This article reviews a recent case, D2 Mark LLC v. OREI VI Investments LLC, to understand how the court's decision may provide mezzanine lenders with guidance in structuring a UCC foreclosure sale auction in the COVID-19 landscape so as to strengthen their position against any claims by the mezzanine borrower that the sale is not commercially reasonable.

8 minute read August 01, 2020 at 12:05 AM
By
Jeffrey B. Steiner and Scott A. Weinberg
Mezzanine Lenders and Foreclosure Sales During COVID-19

Although mezzanine lenders undertake a greater risk when entering into mezzanine loans due to the fact that their rights are junior and subordinate to mortgage lenders, they are afforded with the benefit of, in addition to typically receiving a higher interest rate, the ability to conduct relatively speedy foreclosure sales under the Uniform Commercial Code (UCC).

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