Banking and Finance

Banking has been a part of the history and practice of Schenck, Price, Smith & King since it was established in 1912.  Throughout its early years, the Firm shared its physical location with many prominent banking institutions, and its founding attorneys acted as their general counsels.

The Firm is now engaged in a regional and nationwide banking practice involved in sophisticated and specialized transactions.  The Banking and Finance Practice Group consists of seasoned attorneys and paralegals who all share a depth and abundance of experience in all areas of banking.  Its members have garnered their varied experience through work in major law firms, as general counsels of banks, and tenure with regulatory agencies including the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC).

Each of the Group’s members has substantial knowledge of the law of secured transactions and the Uniform Commercial Code, real estate and general corporate matters, as well as bankruptcy, insolvency and lender liability and other litigation issues through first-hand experience with workouts and restructurings of problem credits, deed-in-lieu financings, and foreclosures and collection cases.

TYPES OF CLIENTS
In asset-based transactions and factoring situations and in acquisition financings:

  • Commercial lenders and borrowers
  • Traditional bank and non-bank lenders
  • Entities and individuals
  • Financial institutions and borrowers

Our attorneys advise both lenders and borrowers in all aspects of government-guaranteed loans through the United States Small Business Administration (SBA), the United States Department of Agriculture (USDA) and assist clients of the Firm to qualify for the New Jersey Economic Development Authority (NJEDA) loans in situations in which traditional financing is not available.

PRINCIPAL AREAS OF CONCENTRATION

  • Commercial transactions
  • Loan closings
  • Leasing matters
  • Land use
  • Letter of credit and acceptance financings
  • Franchise matters
  • Leveraged buyouts and stock/asset acquisitions
  • Mezzanine financing
  • Asset-based financings and factoring arrangements
  • Direct pay letter of credit enhancements
  • Swaps and other interest rate hedging agreements
  • Syndicated loans and participations
  • Foreign exchange transactions
  • Interpretations involving SBA rules and regulations
  • SBA repurchases
  • SBA and Economic Development Authority (EDA) financings and bond purchases
  • Housing and Urban Development (HUD) transactions and FITA transactions
  • Forbearances, restructurings, workouts
  • Deed-in-lieu financings, foreclosures, and collections
  • Employee Stock Ownership Plan (ESOP) loans
  • Condominium association financings
  • Commercial Restructuring and Workouts
  • Financial regulatory compliance
  • Regulatory deals
  • Institutional loans
  • Mortgage loans, construction loans, and mortgage loan review
  • SBA programs involving the United States SBA, including 7(a) and 504 finance transactions and USDA B & I loans
  • Working capital lines of credit, revolving credit and term loan facilities

REPRESENTATIVE MATTERS

  • Numerous transactions and closings with emphasis on SBA 7(a) and 504 closings
  • $52,000,000+ syndicated senior secured credit facilities to a company for working capital, letters of credit, acquisition financing, and mortgage loans, secured by the stock of the company’s foreign subsidiaries and by real property                
  • $23,000,000+ syndicated senior secured credit facilities to a non-profit corporation for the construction and operation of a cultural center, secured by pledges donated to the cultural center
  • $19,000,000+ secured credit facilities to a manufacturing company for working capital and letters of credit and acquisition of equipment, secured by all assets of the company
  • $60,000,000+ asset-based syndicated senior secured credit facilities to co-borrower manufacturers for working capital, letters of credit, and bankers’ acceptances, secured by all assets of the borrowers
  • $11,400,000 direct pay substitute letter of credit issued by a financial institution to support tax-exempt bonds issued by a municipality in Wyoming to provide loan proceeds to a limited partnership to finance a portion of the funds for the acquisition, construction, installation, and equipping of a certain solid waste disposal facility
  • $8,000,000 direct pay letter of credit issued by a financial institution to support variable rate tax-exempt bonds issued by the NJEDA to provide loan proceeds to finance the expansion of the facility of a New Jersey not-for-profit corporation
  • $3,500,000 SBA section 7(a) loan to finance the purchase of restaurant and liquor license, secured by a mortgage on the restaurant, a blanket lien on business assets, guarantees, and a pledge of stock of the entity holding liquor license
  • $4,750,000 SBA section 7(a) loan to finance the purchase of a hotel, secured by a mortgage on the hotel, a blanket lien on all business assets, guarantees, and a pledge of stock as collateral
  • $2,000,000 SBA section 7(a) loan to finance the purchase of a restaurant with a $1,000,000 pari passu commercial loan to finance the purchase of liquor license and inventory, secured by mortgages on the restaurant, guarantees, and a pledge of stock of the entity holding liquor license
  • $1,500,000 SBA section 7(a) loan to purchase a fast food franchise, secured by a blanket lien on all business assets, a leasehold mortgage, ancillary mortgages, and guarantees
  • $2,300,000 commercial loan facility consisting of a commercial mortgage loan with a $1,300,000 commercial mortgage bridge loan in connection with an SBA 504 loan, secured by a blanket lien on all business assets, mortgages, guarantees, and a pledge of stock as collateral
  • $7,800,000 combined commercial and SBA 5-section 504 loan to retrofit and install solar panels on a cold storage facility
  • $33,000,000 revolving construction loan for a multiple-phase residential development project, together with $14,000,000 mezzanine financing
  • Representation of a borrower in the financing of the expansion of its manufacturing facility with the proceeds of an $8,000,000 NJEDA fixed-rate tax-exempt economic development bond issue
  • Representation of a borrower in the financing of the construction and equipping of its new manufacturing facility with the proceeds of a $9,000,000 North Hampton County Pennsylvania Industrial Development Authority floating rate tax-exempt economic development bond issue
  • Representation of a borrower in a $20,000,000 acquisition financing of building sites and the subsequent construction of a number of assisted living facilities
  • Numerous other commercial mortgage, construction and real estate lending transactions for financial institutions and borrowers ranging from $100,000 to $35,000,000+

NOTEWORTHY ITEMS

Thomas L. Hofstetter, Chair

  • Has lectured on numerous topics of interest to lenders and business establishments regarding business law and transactions as well as matters involving the United States Small Business Administration
  • Member & Instructor, National Association of Government Guaranteed Lenders (NAGGL), Technical Issues Committee, Associate Member Committee; Chair, Region II Regional Liaison Committee; 504 Lending Committee
  • Member, National Association of Development Companies (NADCO)
  • General Counsel to a community bank
  • Counsel/Section Chief, FDIC
  • Staff Attorney, United States SEC

Michael A. Gallo

  • Frequent lecturer to loan officers and bank personnel on the methods of using real property and non-real-estate collateral to secure debt, Article 9 of the Uniform Commercial Code (asset-based lending), risk of loss resulting from title defects and necessity of title insurance in real property transactions
  • Member, New Jersey State Bar Association, Banking Law Section
  • Member, Advisory Board of Bank of America, Capital One Bank, and Valley National Bank

Michael L. Messer

  • AV® rated, the highest rating conferred by Martindale-Hubbell® for legal ability and professional ethics, based upon a peer review of the Bar and the Judiciary
  • Member, Advisory Boards of Sovereign Bank and Oritani Bank
  • Former President and Current Member of Senior Counsel of the Board of Governors, Industrial and Office Real Estate Brokers Association (New York metropolitan area; encompasses commercial real estate firms in New York, New Jersey, Connecticut, and Pennsylvania)

Jeremy M. Garlock

  • Recognized in 2008, 2009 and 2010 by New Jersey Monthly magazine as one of New Jersey’s “Rising Star, Super Lawyers” * in Banking
  • Former Member, Morris and Essex County Inn of Transactional Counsel (inaugural Counsel)

Daniel O. Carroll

  • Member, the Inn of Transactional Counsel (Morris and Essex Counties)
  • Member, Leadership Morris Class of 2011 (Morris County Chamber of Commerce)
  • Active participant in the Rothman Institute of Entrepreneurship events at Fairleigh Dickinson University (Madison, New Jersey)

Amy Buck Faundez

  • Member, the Inn of Transactional Counsel (Morris County)
  • Associate General Counsel—private lending company (2006-2008)

*  For more information about the Super Lawyers selection process, please go to: http://www.superlawyers.com/about/selection_process.html
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