Goodwin Procter advised institutional investors in a fund advised by Prudential Real Estate Investors and Ashford Hospitality Trust on a consensual foreclosure and the successful restructuring of approximately $1.3 billion of debt related to the Highland Hospitality portfolio previously owned by JER Partners. Highland's assets consisted of 28 properties under the Hilton, Marriott, Renaissance, Sheraton and Westin brands. Prior to the restructuring, the Highland portfolio included $700 million of mortgage debt and another $1.1 billion of mezzanine debt separated into eight tranches.
Goodwin led the negotiations on behalf of PREI and Ashford to develop an alternative to a costly and drawn-out bankruptcy filing by Highland. The Goodwin team also advised PREI and Ashford on a cash infusion of approximately $200 million, the conversion of the mezzanine debt into equity of a joint venture, and the negotiation of new agreements with the mortgagees and Wells Fargo and Barclays, new mezzanine agreements with Blackstone and Guggenheim, and new agreements with the various hotel flags and managers for all 28 properties. Goodwin also advised on REIT compliance matters, including the restructuring of multiple operating leases.
The cross-practice Goodwin team included attorneys in the firm’s Real Estate, Financial Restructuring, Tax and Labor Practices and was led by partners Minta E. Kay, Edward L. Glazer, Karen F. Turk and Albert J. Solecki, Jr.