Difficulties with Recouping Collateral in Defaulted Pre-Crisis CMBS Deals

Detailing a couple of specific deals, Bloomberg reported on investors attempting to recoup collateral to stem their losses from pre-crisis CMBS deals. In these deals, investors have attempted to claim collateral – a piece of commercial property – though all the fixtures in the building, including stairs, elevators, and fixtures, had been pledged to someone else. The article notes that the practice of splitting the fixtures of the underlying collateral from the larger property itself has delayed seizure of property control, and significantly increased litigation costs.

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