Illinois Law: Use of Proceeds Clauses
This imaginary case serves as a great reminder that precise drafting and prompt enforcement of use‑of‑proceeds covenants can make—or break—a commercial real‑estate loan recovery. CASE FACTS AY Properties, LLC advanced a $2.5 million construction loan to DS Investments, Inc. for the development of a mixed‑use retail property in Chicago, Illinois. Under the loan agreement, disbursements were conditioned strictly […]
Enforcing Carve-Out or “Bad Boy” Guaranties
Enforcing carve-out or “bad boy” guaranties in real estate loan agreements—especially in Illinois and other jurisdictions that favor lender protections—requires a strategic blend of contract clarity, trigger precision, and procedural discipline. Here’s how to do it effectively: First, the guaranty must be clearly drafted, with carve-out events precisely defined. Courts have upheld full recourse liability […]
Key Legal Issues in Real‑Estate Loan Defaults
Both lenders and borrowers–no matter how sophisticated they are or how much artificial intelligence they may use–often need reminders of the key issues they need to think about. Are There Any Event of Default & Acceleration Clauses?Most commercial loans define specific “events of default” (e.g., missed payment, breach of a covenant, insolvency). Upon default, lenders […]
Drafting Carve-Out or “Bad Boy” Guaranties
Drafting effective carve-out or “bad boy” guaranties—especially in Illinois or similar jurisdictions—requires a careful balance between lender protection and guarantor fairness. Here are some nuanced tips to help you structure them strategically: Start with precise definitions. Avoid vague terms like “waste” or “bad acts” unless they’re clearly defined. Courts have interpreted ambiguous carve-outs as triggers […]
Forecasting the Key Legal Issues for SMBs in 2026
It is never too early to start worrying about how the legal world will impact your business in 2026. That said, I foresee the key legal issues in 2026 to largely mirror those from 2025. This is not intended to be a comprehensive list; rather, this is a “greatest hits” of generally applicable issues businesspeople […]
Real Estate LOI Basics
Real estate letters of intent (LOIs) set forth economic terms, provide a checklist of the basic substantive terms, and serve as the starting point for attorneys to draft the formal agreements. Put differently, LOIs are the preliminary understandings of parties who intend to enter into a contract in the future “if the deal works out.’” […]
Have You Really Thought Through Your Due Diligence?
Due diligence identifies potential risks before closing a deal. The goal is to find problems that may lead to renegotiating, reducing the purchase price, or walking away from a deal. Yet many issues remain hidden despite rigorous due diligence. Earlier in my career I read about issues that were raised in a bankruptcy asset sale […]
Key Tenant Issues In Data Center Leasing Agreements
Leasing a data center is a strategic decision that comes with unique challenges. Here are some of the critical issues you should be aware of before signing a data center lease. 1. Security and Access Data centers house critical infrastructure, making security a top priority. Here are some considerations: 2. Maintenance Responsibilities Data center tenants […]
Liquidated Damages In Real Estate Agreements
Liquidated damages provisions must be given careful consideration when negotiating a real estate agreement. Liquidated damages provisions usually appear as “earnest money” or a “non-refundable deposit” to set forth the negotiated amount of money that a seller can retain if a buyer breaches a purchase and sale agreement. Buyers are generally entitled to a return […]
Commercial Forbearance Agreements: Borrower Considerations
Forbearance is the act of temporarily refraining from taking action against someone or something. In the commercial lending context, forbearance means the lender is refraining from exercising its remedies because the borrower defaulted on its loan. Forbearance agreements can be simple and straightforward. They can also be complicated contracts with many moving parts, […]
