At Mills Selig we advise clients on all aspects of dealing vulture funds and over the past several years, we have helped many of our clients negotiate a significant amount of debt forgiveness, allowing them to refinance with new lenders.
What is a ‘Vulture Fund’?
This is a term used to describe a company that buys up distressed investments or underperforming debt, usually from banks. The debt is typically bought as large debt books or portfolios. In most cases, the vulture funds such as Promontoria, Cerberus and Clipper seek to realise their assets as quickly as possible, aggressively seeking to enforce the debt by the most expeditious method possible, often via the enforcement of personal guarantees or repossession proceedings. The actions of the funds are managed by their agents, LG Asset Services and Engage Commercial.
How can we help?
Advising on the enforcement of personal guarantees
Vulture funds often hold personal guarantees, which have been assigned to them, that were previously granted in favour of the original lender. These personal guarantees may contain legal defects which render them unenforceable. The circumstances in which the guarantees were granted in favour of the original lender, including what advice was taken by the guarantors at the time of signing, may also have a bearing on their enforceability by vulture funds.
Defending Bankruptcy Proceedings
Vulture funds often seek to have clients bankrupted in order to recover their debt. We can provide you with specialised advice and representation to help you defend any bankruptcy proceedings. In additional to expert legal advice, we work closely with a network of Insolvency Practitioners (IPs) that can deliver you tailor made advice in structuring your personal solvency position.
Defending repossession actions
If a vulture fund is trying to repossess your property, we can provide you with expert legal advice and representation to help you defend the action. Due to our extensive experience of dealing with vulture funds we can offer valuable insight as to their expectations.
It is important to negotiate sensibly and realistically having regard to the security held, the totality of asset cover, and the ability to refinance. Through a combination of legal arguments, sector relationships and commercial acuity our team will be able to assist clients in reaching a satisfactory settlement. In addition, we can provide you with tailored restructuring advice to assist you in refinancing away from the vulture fund.