{"id":1004069715,"date":"2013-04-02T08:51:56","date_gmt":"2013-04-02T16:51:56","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004069715"},"modified":"2022-12-08T05:57:17","modified_gmt":"2022-12-08T13:57:17","slug":"carmel-wins-capital-properties-loses-in-rincon-apartments-lawsuit","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/carmel-wins-capital-properties-loses-in-rincon-apartments-lawsuit\/","title":{"rendered":"Carmel Wins, Capital Properties Loses in Rincon Apartments Lawsuit"},"content":{"rendered":"<p><em>By Barbra Murray, Contributing Editor<\/em><\/p>\n<div id=\"attachment_1004069809\" style=\"width: 160px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Barry-Lee-partner-with-Manatt-Phelps.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004069809\" data-attachment-id=\"1004069809\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/carmel-wins-capital-properties-loses-in-rincon-apartments-lawsuit\/barry-lee-partner-with-manatt-phelps\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Barry-Lee-partner-with-Manatt-Phelps.jpg\" data-orig-size=\"425,418\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"Barry Lee partner with Manatt Phelps\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Barry Lee, of Mannatt Phelps&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Barry-Lee-partner-with-Manatt-Phelps.jpg?w=425\" class=\"size-thumbnail wp-image-1004069809\" title=\"Barry Lee partner with Manatt Phelps\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/04\/Barry-Lee-partner-with-Manatt-Phelps.jpg\" alt=\"\" width=\"150\" height=\"150\" \/><\/a><p id=\"caption-attachment-1004069809\" class=\"wp-caption-text\">Barry Lee, of\u00a0Manatt, Phelps &amp; Phillips L.L.P.<\/p><\/div>\n<p>The credit crunch may be behind us for the most part, but the fallout continues, as evidenced by a lender liability\/wrongful foreclosure action filed by Capital Properties against Carmel Partners regarding the latter&#8217;s foreclosure on Rincon Residential Towers in San Francisco. The verdict just came in&#8211;a San Francisco Superior Court judge has ruled in favor of the defendants, so the high-rise apartment complex will remain in Carmel&#8217;s hands.<\/p>\n<p>Capital Properties relied on a multi-firm team that included Boies, Schiller &amp; Flexner L.L.P. for representation. Carmel has the law firm of Manatt, Phelps &amp; Phillips L.L.P. to thank for its victory.<\/p>\n<p>Barry W. Lee, a partner with Manatt, reflects on the outcome and its greater meaning. &#8220;If you look at this case in its own little capsule, I think it says that when borrowers and lenders find themselves in a situation that many borrowers and lenders found themselves in after the crash, you need to work in good faith with each other to come to a reasoned solution,&#8221; he said.<\/p>\n<p>The story begins in 2007&#8211;just before the capital markets froze and the real estate market went into a downward spiral&#8211;when Capital Properties acquired Rincon Residential Towers from Beacon Capital Partners L.L.C. for $143 million, relying in part on a two-year, $110 million loan from Bear Stearns to fund the purchase. Just as Capital Properties was finishing up its renovation of the upscale multi-family destination, Bear Stearns crumbled. As Manatt describes it, Capital Properties later attempted to arrange an extension on the Rincon loan or purchase the loan at a discount, but to no avail.<\/p>\n<p>The loan went into default before a Carmel entity, CP III Rincon Towers Inc., acquired the debt on the 709-unit apartment community. Carmel later took over ownership of the asset, which it has renamed Carmel Rincon Luxury Apartments. &#8220;I&#8217;ve represented both lenders and owners and not withstanding what some people think, lenders, generally speaking, are not interested in having to foreclose;\u00a0\u00a0they&#8217;re just trying to get to an economically rational solution to problems,&#8221; Lee said. &#8220;Given the fact that the loan was already in default, there was the expectation that foreclosure was a definite possibility. But I&#8217;m pretty confident that our client would have been just as happy to be paid back the amount that was owned on the loan.&#8221;<\/p>\n<p>In February 2010, Capital Properties filed the lawsuit and recorded a lis pendens, or pending litigation, on the property. The plaintiff had wanted to regain ownership of Rincon and obtain $40 million in damages. Among Capital Properties&#8217; claims, as Manatt recounted, the loan defaults had been wrongfully declared and the lenders hindered efforts to refinance.<\/p>\n<p>The court thinks otherwise. The plaintiff&#8217;s lawsuit, the judge has found, was part of a strategy to interfere with any sale of the loan. &#8220;I think that the court&#8217;s opinion very clearly indicates that the evidence, to this judge, showed that the borrower wasn&#8217;t really working to try to get to a reasoned solution to the problem,&#8221; Lee said. &#8220;A corollary of that of course is to know what your documents say&#8211;and I think they did know what their documents say, which may have accounted for what their approach was.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The credit crunch may be behind us for the most part, but the fallout continues, as evidenced by a lender liability\/wrongful foreclosure action filed by Capital Properties against Carmel Partners regarding the latter&#8217;s foreclosure on Rincon Residential Towers in San Francisco.<\/p>\n","protected":false},"author":969,"featured_media":1004069809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21742],"tags":[],"class_list":["post-1004069715","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - 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