Head of Venable’s bankruptcy group hailed as “Mall Cop” for his work protecting interests of special servicers and secured creditors in restructuring $12 billion of General Growth Properties CMBS debt
WASHINGTON/BALTIMORE (April 7, 2010) – Cementing his stature as one of the country’s leading bankruptcy lawyers, Venable’s Gregory Cross has been named a “Dealmaker of the Year” by American Lawyer magazine for his role in untangling the major portion of the massive debt load weighing on national shopping mall developer General Growth Properties.
Mr. Cross, who chairs Venable’s firmwide Bankruptcy and Creditors’ Rights Group, was dubbed “Mall Cop” by American Lawyer for safeguarding the interests of a group of special servicers representing trusts holding large blocks of commercial mortgage-backed securities backed by GGP loans.
Despite owning many of the nation’s trophy retail malls – including Faneuil Mall in Boston, South Street Seaport in New York and Water Tower Place in Chicago – GGP (technically a public Real Estate Investment Trust) in April 2009 filed the largest commercial real estate bankruptcy in history, because of challenges in servicing some $27 billion in debt. The filing sent shockwaves through the commercial real estate finance community.
Mr. Cross and his team initially advised a group exposed to $5 billion of CMBS debt owed by GGP. Shortly after the case was filed, Mr. Cross was tasked by the court to serve as coordinating counsel for all CMBS creditors who were collectively owed more than $12 billion – nearly half of GGP’s outstanding debt.
After a contentious start, the CMBS portfolio was re-engineered with impressive haste as Mr. Cross led negotiations for the secured lenders’ group. In return for an extension of the maturity date, Mr. Cross negotiated a complete re-underwriting of GGP’s reporting and consent obligations, significantly accelerated amortization payments and newly created new Special Purpose Entity protections for the CMBS lenders.
As a result, Venable’s clients and the properties servicing those debts exited Chapter 11 in less than seven months, ahead of GGP itself, with reorganization plans approved last December. As a lawyer representing the Commercial Mortgage Securities Association told American Lawyer, Mr. Cross “did a very good job of orchestrating the deal of behalf of my clients.” More than that, the swift resolution helped calm down a jittery CMBS market.
“If there is a large, broken piece of commercial real estate, chances are we’ll be there in some capacity on behalf of the special servicers,” said Mr. Cross, who is no stranger to oversized bankruptcy proceedings. In the past 18 months, the portfolio of loans on which Venable’s bankruptcy team is working has grown 600%, while Mr. Cross has served as counsel on some of the largest filings in that period.
In addition to GGP, he has advised equity holders in the ongoing Chapter 11 case of Washington Mutual, while representing the debtor in the bankruptcy of former high-flying residential lender Thornburg Mortgage Inc. He also is advising creditors holding more than $3 billion in debt issued by the owners of Stuyvesant Town and Peter Cooper Village, the 80-acre, 8,800-unit residential complex on Manhattan’s Lower East Side and represents the state of Maryland in the bankruptcy of Magna Entertainment in connection with the State’s efforts to ensure the venerable Preakness Stakes remains in the State. He also recently helped lead the workout of one of the largest out-of-court restructurings by an individual in the U.S., involving more than $1.5 billion in personal assets.
This Venable attorney made his mark in the late 1990s, leading the workout of real estate trust CRIIMI MAE, still one of the only successful workouts of a large REIT in bankruptcy. It was that assignment that convinced Mr. Cross that Venable could become a significant factor in complex real estate bankruptcy matters.
“It takes some discipline to step back, recognize that you have a specialized skill set and actually develop and perfect those tools while everyone else is jumping into the ‘It’ practice of the moment,” Mr. Cross said in describing his group’s expert niche. “It came together several years ago, when we saw the huge displacement coming in commercial real estate and realized that no one knew more about how to work out those kinds of deals than our team.”
AmLaw’s Dealmaker honor marks the second time this year that Venable’s bankruptcy group has drawn attention. In January, Law360 named Venable among the top five bankruptcy practices in the nation. Venable also ranked Number 4 in American Lawyer’s Bankruptcy Scorecard for 2010.
“The recent recognition Greg Cross and his team have received confirms what all of us have known for a long time – we have a world-class bankruptcy and restructuring practice,” said Venable Managing Partner Karl Racine.
Note: An American Lawyer top 100 law firm, Venable LLP has attorneys practicing in all areas of corporate and business law, complex litigation, intellectual property and government affairs. Venable serves corporate, institutional, governmental, nonprofit and individual clients throughout the U.S. and around the world from its headquarters in Washington, D.C. and offices in California, Maryland, New York and Virginia.