CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Construction Mezzanine Financing

March 29, 2017 — Tim Davis & Steven Coury - White and Williams LLP
Construction mezzanine lending is on the rise and more development deals are getting done with a capital stack that includes mezzanine debt in addition to the traditional components of sponsor equity and senior mortgage debt. Below are important issues and concepts to bear in mind when structuring the financing of a construction project that includes a mezzanine debt component. Funding Sequence Funding Sequence When will the proceeds of the mezzanine loan be advanced? In some instances, the mezzanine loan proceeds will be advanced only after all of the borrower’s equity has been contributed to the construction of the project. In other instances, the borrower’s equity and the mezzanine loan proceeds go in either pari passu or simultaneously at another ratio. If the equity is not entirely contributed in advance, the mezzanine lender may require that the uncontributed equity be held by the mezzanine lender or held in a pledged account. The mezzanine lender may also further mitigate the risk of non-funding of the equity by requiring an equity funding guaranty (as discussed below). Additionally, when will the mezzanine loan proceeds be advanced in relation to the senior mortgage loan proceeds? Will the entire mezzanine loan be advanced prior to any senior mortgage loan advance or will they be advanced pari passu? Depending on the business deal, the mezzanine loan agreement will need to reflect how and when the equity, the mezzanine debt, and the mortgage debt will be advanced. Reprinted courtesy of Tim Davis, White and Williams LLP and Steven Coury, White and Williams LLP Mr. Davis may be contacted at davist@whiteandwilliams.com Mr. Coury may be contacted at courys@whiteandwilliams.com Read the court decision
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Developer Transition - Maryland Condominiums

June 21, 2017 — Nicholas D. Cowie - Maryland Condo Construction Defect Law Blog
INTRODUCTION “Developer transition” is the process by which the governance of a condominium association is transferred from developer to unit owner control. This article provides a brief overview of the legal requirements that govern the developer transition process for Maryland condominiums. This article also as well as a “transition checklist” for transitioning unit owner-controlled boards of directors. PERIOD OF DEVELOPER CONTROL A developer initially controls an association because it owns all unsold units in the newly created condominium community. As such, the developer has the controlling votes associated with majority ownership and can appoint its own employees as the initial members of the board of directors and thereby control how the condominium association conducts its affairs. This is referred to as the “period of developer control,” during which the developer makes all decisions on behalf of the association. The developer also creates an association’s governing documents, allowing it to dictate, subject to applicable law, the procedures and time periods under which control over the association’s board of directors will eventually be transferred to the homeowners. Read the court decision
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Reprinted courtesy of Nicholas D. Cowie, Cowie & Mott, P.A.
Mr. Cowie may be contacted at ndc@cowiemott.com

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Claim Against Broker Survives Motion to Dismiss

January 25, 2021 — Tred R. Eyerly - Insurance Law Hawaii
The insured's complaint against its broker for failure to secure adequate coverage survived a motion to dismiss. Broecker v. Conklin Prop., LLC, 2020 N.Y. App. Div. LEXIS 7399 (Dec. 2, 2020). Conklin Property, LLC purchased real property and entered into a contract with JJC Contracting, Inc. for construction and renovation of the property. The broker, Total Management Corp. (TMC) was retained by Conklin to secure insurance for the construction phase of the renovation project. During the renovation, an employee of JJC was injured at the property and died. The employee's estate then sued Conklin. US Underwriters, the insurer, disclaimed coverage pursuant to an exclusion for bodily injury to contractors and subcontractors and their workers. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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New Proposed Regulations Expand CFIUS Jurisdiction Regarding Real Estate

January 20, 2020 — Pillsbury's Construction & Real Estate Law Team - Gravel2Gavel Construction & Real Estate Law Blog
On September 17, 2019, the U.S. Department of Treasury issued two new proposed rules for the Committee on Foreign Investment in the United States (CFIUS) implementing the Foreign Investment Risk Review Modernization Act (FIRRMA). Of particular interest to readers of this blog was the second of the proposed rules, which addressed FIRRMA’s real estate-related expansion of CFIUS jurisdiction. Pillsbury's Construction & Real Estate Law Team Read the full story... Read the court decision
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Repair of Fractured Girders Complete at Shuttered Salesforce Transit Center

July 22, 2019 — Nadine M. Post - Engineering News-Record
The repair of two fractured girders spanning Fremont Street and the reinforcement of twin girders spanning First Street are complete at the beleaguered Salesforce Transit Center in San Francisco. Reprinted courtesy of Nadine M. Post, Engineering News-Record Ms. Post may be contacted at postn@enr.com Read the court decision
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New Jersey Rules that Forensic Lab Analysts Can’t be Forced to Testify

August 06, 2014 — Beverley BevenFlorez-CDJ STAFF
The New Jersey Law Journal reported that the New Jersey Supreme Court has rejected a rule that would have required “laboratory analysts who prepare forensic reports in criminal cases be available for cross-examination at trial.” The court stated that “requiring every analyst who was involved in the testing to be available for questioning by the defense was not required by the U.S. Constitution's Sixth Amendment Confrontation Clause and that doing so would create ‘practical drawbacks that range from moderate to severe.’” Read the court decision
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Louisiana Court Holds That Application of Pollution Exclusion Would Lead to Absurd Results

October 21, 2019 — Sergio F. Oehninger & Daniel Hentschel - Hunton Insurance Recovery Blog
A Louisiana court recently denied an excess insurer’s bid for summary judgment, finding that the insurer’s interpretation of a pollution exclusion would lead to “absurd results.” Central Crude, Inc., a crude oil transporter company, experienced an oil pipeline leak, allegedly causing damage to property belonging to Columbia Gas Transmission Company. Columbia Gas sued Central Crude seeking compensatory damages and injunctive relief to compel remediation of the site. Central Crude sought coverage under a CGL primary insurance policy issued by Liberty Mutual. The insurer initially agreed to cover Central Crude’s “reasonable and necessary costs” relating to the incident, but later refused to defend or indemnify Central Crude for any costs incurred from the incident. As a result, Central Crude brought suit against Liberty Mutual and its excess insurer, Great American, to enforce coverage. Great American moved for summary judgment arguing coverage was excluded by the excess policy’s pollution exclusion, which precludes coverage for injury “arising out of a discharge of pollutants.” Central Crude responded arguing that the exclusion’s applicability was invalidated or at least rendered ambiguous by the Following Form Endorsements, which reflect an intent to mirror the coverage afforded under the primary Liberty Mutual policy, and because coverage appears to be specifically authorized through the Premises Operations Liability Endorsement. Reprinted courtesy of Sergio F. Oehninger, Hunton Andrews Kurth and Daniel Hentschel, Hunton Andrews Kurth Mr. Oehninger may be contacted at soehninger@HuntonAK.com Mr. Hentschel may be contacted at dhentschel@HuntonAK.com Read the court decision
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Hurricane Ian: Discussing Wind-Water Disputes

October 10, 2022 — Randy J. Maniloff - White and Williams LLP
“Most of the Florida homes in the path of Hurricane Ian lack flood insurance, posing a major challenge to rebuilding efforts, new data show. In the counties whose residents were told to evacuate, just 18.5 percent of homes have coverage through the National Flood Insurance Program, according to Milliman, an actuarial firm that works with the program.” That’s how a September 29th article on The New York Times website begins. When it comes to insurance coverage for hurricanes, the oft-stated maxim is that homeowner’s policies cover damage caused by wind but not flood waters. Such a low take-up rate for flood insurance policies would seemingly create an incentive for those affected by Hurricane Ian to argue, when feasible, that their property damage, despite appearing to have been caused by flood, was also caused by wind. [And, of course, businesses looking to make business interruption claims, under commercial property policies, will be in the same boat.] Further, even when someone has a homeowner’s policy and a flood policy, there may still be a reason to argue that the loss was caused by wind, as homeowner’s policies often have greater limits than flood policies. [As an important aside, when hurricane damages are covered, homeowner’s policies can have a significant deductible, perhaps up to 10% of a home’s insured value.] Read the court decision
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Reprinted courtesy of Randy J. Maniloff, White and Williams LLP
Mr. Maniloff may be contacted at maniloffr@whiteandwilliams.com

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