3
Nov
Real Estate Development And Construction Project Insolvencies: Is Debt Restructuring Feasible?
While the global economy has cooled, the insolvency practice is certainly experiencing its own boom at the present. One of the hardest hit industries after the large run up in prices has been real estate development, particularly in Alberta and British Columbia. While each insolvency creates certain challenges, real estate development insolvencies present unique challenges. Many trade creditors, who in any other industry would normally be unsecured creditors, have enhanced security rights and trust rights pursuant to the various construction and builders lien statutes. Cash flow during construction is usually solely from construction advances by lenders and has certain restrictions or limits placed on it by the construction liens statutes through the hold back requirements. The long-term viability of the project is dependent on selling or leasing units or space, and being able to close those deals in a timely fashion.
 |
|
 |