Ted Herzog

(Bankr. D. Or.) – Tonkon represented debtor, Stayton SW Assisted Living, L.L.C., and over 700 substantially consolidated affiliates, in a Chapter 11 proceeding that resulted in a confirmed Plan of Reorganization. The biggest and most complex bankruptcy case ever filed in Oregon, the consolidation, restructuring and $1.2 billion sale involving over 700 of Sunwest entities demanded legal expertise in bankruptcy, securities, tax, real estate, corporate governance, litigation, mergers and acquisitions, regulated industries and commercial transactions. Al Kennedy and Tim Conway worked with a team of Tonkon lawyers and paralegals who developed and executed a complex resolution that restructured obligations owing to over 90 secured lenders, sold 146 senior living facilities (including approximately 1,200 tenant-in-common interests held by investors), and resulted in distributions to creditors and investors exceeding 100% of their claims.

Represented client borrower in the negotiation and closing of a construction loan for a retirement residence in Washington state. Our work included a loan agreement, related security documents, and the negotiation of ancillary development agreements among the borrower and its development and architectural contractors. On the intended day of closing, it was discovered that a subcontractor had prematurely commenced site work, jeopardizing the bank’s priority. We were able to work with the client, title, and bank to negotiate subordination agreements for the subcontractor and general contractor, and closing proceeded only one day later than planned.

Represented client in the purchase of a 33% membership interest in an LLC that owns a low-income multifamily housing development. This transaction was particularly complicated given the regulatory approvals required from both the State of Oregon (in connection with the low-income housing status) and the U.S. Department of Housing and Urban Development (as the entity had a loan from HUD). This process of seeking approvals, coordinating updated applications, regulatory documents, and loan documents – involving repeated back and forth with the applicable governmental authorities – took over six months.

Represented client and his estate in the sale of investment property and the purchase of new investment property in a 1031 tax deferred exchange. The transaction presented unique tax and real estate issues due to the death of the client during the 1031 exchange period. Also, the new property required evaluation of environmental issues due to its former use as a gas station.

Represented Yakima Products, Inc. on all aspects of its purchase of an 89,000 square foot office building and 13-acre campus in Lake Oswego, Oregon for its new corporate headquarters. Advised client regarding potential land use and redevelopment issues. Also negotiated a lease termination agreement with Yakima's prior landlord.

Represented seniors housing client in the formation of a joint venture with a Massachusetts developer to acquire a partial interest in a real estate sale agreement, and the acquisition of a portion of the property for the development of two assisted living facilities. The real estate transaction involved the subdivision of the property, creation of easements and other rights to the lots not acquired by the client, and the imposition of historical preservation and affordable housing covenants on the property as a condition of development. Also assisted the joint venture to obtain construction financing.

Represented client in the acquisition of bare land in Gresham, Oregon for development of a 250 lot subdivision, including negotiation of a secured purchase money loan and take-down agreements to sell the future lots to a residential homebuilder.

Represented two affiliated senior living facilities in the sale of the businesses and underlying real property. This sale involved a payoff of a Housing and Urban Development (HUD) loan and coordination with the buyer for a replacement HUD loan at closing. In light of reduced occupancy amidst COVID-19, Tonkon Torp assisted the parties in negotiating a purchase price holdback to be released to either buyers or seller over the course of a year based on post-closing occupancy rates.

Advised Portland hotel owner on defeasance and simultaneous new loan transaction secured by hotel real estate.

Represented the buyer of a Portland warehouse with SBA financing.  Issues included purchase and sale negotiations, title, survey, environmental, property inspection, other due diligence review, negotiation of a short term lease back to the seller, and forming a new entity to take title.

Represented the purchaser of two apartment complexes in Yakima, Washington. Handled the negotiation and closing of acquisition loan as well as title review, title clearing, and due diligence for client.

Ongoing representations of major retirement residence companies in their real estate transactions, business sales and acquisitions, and construction and loan transactions, including Fannie Mae and Freddie Mac loans, throughout the United States. Recent projects included sales of independent living facilities in California and purchase of others in Louisiana, and numerous construction and permanent loan transactions nationally.

Negotiated and closed $14.2 million acquisition and acquisition loan for a national owner and operator of senior housing facilities. The client sought to purchase an existing facility that had been developed and built by an inexperienced operator in Louisiana. The seller's loan was in default and the property was at risk to go into foreclosure, making it essential that the deal be completed with speed and efficiency.

Negotiated and closed a $16.7 million permanent loan with local counsel based in Camp Hill, Pennsylvania for an independent living facility in Bethlehem, Pennsylvania.

Office, commercial, and industrial leasing transactions representing landlords and tenants. Negotiating, drafting, and reviewing purchase and sale agreements for real estate concerns and businesses. Ted also handles secured lending, leases, easements, sale-leaseback transactions, and other transactions.

Negotiating and drafting organizational documents for joint ventures, limited liability companies, and other entities for real estate investments.

Representing owners of retirement residence companies. Ted counsels on real estate transactions, business sales and acquisitions, and construction and permanent loan transactions throughout the United States, including Fannie Mae and Freddie Mac loans.

Represented the buyer of a warehouse in N.W. Portland with Small Business Administration (SBA) financing, including negotiating and drafting the purchase and sale agreement, a short-term lease back to the seller, and forming a new entity to take title.

Timberland and mill purchases and sales in Oregon, Idaho, Montana, California and Washington. He also provides day-to-day advice on real estate and general business matters such as easements, timberland transactions, Sec. 1031 exchanges, and standardizing business forms.

Represented client in transaction to manage and potentially, in the future, acquire existing senior living facilities. The transaction involved complex issues of state licensing and regulatory oversight of facilities that receive state financial assistance.

Ongoing representation of several national and regional independent and assisted living owners in complex financing transactions, including securitization and defeasance transactions.

Represented major forest products company in purchase of 17,000 acres of Idaho timberlands, including associated agreements and acquisition of ancillary property rights.