"Don't assume the guarantee says what you think it says," warnedmoderator Joshua Stein, a partner at Latham & Watkins LLP. Inparticular, Stein told the audience of lenders, "there are allkinds of surprises and weird interactions in partialguarantees."

Nor should a borrower's claim of distress be taken at facevalue, Stein said, advising the audience to examine the borrower'sentire balance sheet rather than focusing solely on the distressedloan. "The stronger the guarantor, the weaker his position is" innegotiating, he said.

Common workout structures include the lender securing deeds inescrow, the borrower finding a buyer for the property and thelender offering forbearances or extensions on the loan. Steinoffered advice on each, noting that a deed in escrow can be anappealing mechanism if the lender can obtain it as part of aprepackaged bankruptcy proceeding.