Three months ago, a private equity firm approached Tom Galli, a Washington, DC- based attorney with Greenberg Traurig, with an intriguing proposition: it wanted to team up with a bank to acquire a non-performing real estate loan portfolio from a failed institution. The healthy bank would take the assets it wanted from the seized bank, the private equity fund would take the non-performing real estate loan portfolio.

“We took the transaction to the one-yard line, at which point the parties elected not to proceed due to a failure to reach agreement on a couple of business terms ,” Galli reports. One major challenge was that there was only a short window, two weeks at best, to negotiate the documentation for this novel transaction. “A critical element was coming up with a balanced agreement within that time constraint.”

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