Jeopardized By Cherryland: Bankruptcy Remote Financings

Law360, New York (May 24, 2012, 12:49 PM EDT) -- The proliferation of limited recourse financings popularized in the commercial mortgage backed securities (CMBS) loan market through the financial innovation of loan securitization may be in jeopardy following the decision of the Michigan Court of Appeals in Wells Fargo NA vs. Cherryland Mall Limited Partnership.[1]

If the Michigan decision is widely followed, an array of unanticipated consequences may arise that could have profound effects on the debt capital markets generally and on single purpose entity (SPE) borrowers in particular.

Structure of CMBS Limited Recourse Financings...
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