Broadway Partners – $234 Million
Problem: The investment unit expected to be syndicated out of its equity position within nine months of the closing of the transaction. When market conditions made this impossible, the investment unit commenced negotiations to restructure the deal to make it more appropriate for the risk that it was taking as a longer-term equity holder.
Strategy: The investment unit used its contractual right to force a sale of both assets plus certain contractual claims it had with respect to the Broadway Partners fund manager as leverage to improve its economic and structural positions in the two assets.
Result: The investment unit achieved a restructuring that (1) put it in a senior position to Broadway Partners on the asset that needs more time to recover its value, (2) modified its interest in the other asset into a security that would be saleable in the secondary market, and (3) gave it a disproportionate economic share of any proceeds from a sale of such other asset.