Tax Credit Workout & Litigation



Providing clients an advantage for managing troubled or special tax credit assets with guidance from a skilled team that understands the unique challenges of the syndication and tax credit industry.

Our approach

As tax credit deals mature—whether in the historic, new markets, low-income housing, renewable energy or other areas—investors and developers are realizing that disputes between partners sometimes arise, and that the investment properties themselves often become troubled. These properties burdened with construction, operational, life-safety or other exit and workout issues have become more commonplace due to significant external economic pressures negatively impacting real estate and financial markets. In this environment, it is critical that investors, developers and lenders manage their risks and enforce their rights as early and strategically as possible.

We are leaders in representing clients in every aspect of the tax credit industry, including providing industry leadership and guidance on inter-partnership disputes, as well as to investors and developers seeking to unwind their interests in tax-credit projects that have matured. We provide early assessments to resolve disputes and problems quickly and, if possible, without litigation. Our team of litigators can also help clients navigate the more difficult waters of regulatory challenges and compliance issues. Where litigation becomes necessary, our team has substantial experience and knowledge in obtaining immediate, effective relief in state and federal courts throughout the country, as well as in alternative dispute forums.

Informed by decades of direct experience involving workouts and litigation in this area, we provide time-tested approaches and strategies that work best for our clients’ objectives.

We work with

  • Institutional investors
  • Lenders
  • General and Limited Partners
  • Upper tier and lower tier investors
  • Guarantors and indemnitors
  • Real estate developers
  • Sureties
  • General contractors
  • Insurers

Representative Experience

  • Facilitated workout of three low-income housing tax credit properties located in Tennessee that involved tax credit swap, construction completion and defect issues, removal of general partner and project completion issues.
  • Negotiated removal and replacement of general partner of partnership owning long-term care facility in Long Beach, California. Handled litigation involving put of investor limited partners interests to general partner.
  • Negotiated removal of general partner/general contractor and construction takeover of 275-unit high-rise/mixed use development in Washington, D.C.
  • Negotiated the removal of the general partner and the takeover agreement between the property owner and surety and construction completion of 173-unit affordable housing complex in Jacksonville, Florida.
  • Negotiated the workout and removal of the general partner of historic rehabilitation project utilizing historic tax credits involving the Jackie Robinson minor league baseball stadium in Daytona Beach, Florida.
  • Obtained a preliminary injunction to enforce removal of the manager of a combined new markets and historic tax credit project in Tacoma, Washington.
  • Obtained state court judgment against General Partner for misappropriation of funds and improper removal of management agent without consent.
  • Resolved a financing fee dispute in Washington State that might have blocked closing on the first solar project using new markets tax credits nationwide.
  • Resolved dispute among partners over disposition of LIHTC asset in Idaho, resulting in agreed-upon purchase of limited partner interest.
  • Resolved dispute among partners over disposition of LIHTC asset in Virginia, resulting in agreed-upon sale of limited partner interest.
  • Secured final judgment on behalf of a tax credit investment partnership in California against plaintiffs’ claims in an involuntary bankruptcy proceeding successfully dismissing all claims and obtaining award of attorneys’ fees.
  • Secured trial victory on behalf of a tax credit investment partnership after a lengthy trial in New Jersey state court, arising out of a municipality’s decision to claim that a “PILOT” tax exemption was unenforceable, thereby unfairly subjecting the client to significant tax liability and potential foreclosure.

Contacts

Louis E. Dolan, Jr.

Partner
Co-Leader, Tax Credit Workout Litigation Practice

ldolan@nixonpeabody.com

Phone: 202-585-8818

Stephen M. LaRose

Partner
Co-Leader, Tax Credit Workout Litigation Practice

slarose@nixonpeabody.com

Phone: 617-345-1119

  • U.S. News/Best Lawyers “Best Law Firms” 2017 ranked as National Tier One in Commercial Litigation, Litigation—First Amendment, Litigation—Labor & Employment and Mass Tort Litigation/Class Actions—Defendants. Received Tier One Metropolitan Honors in various cities throughout the U.S. in Commercial Litigation, Criminal Defense: White Collar, Litigation—Banking & Finance, Litigation—Bankruptcy, Litigation—First Amendment, Litigation—Labor & Employment, Litigation—Mergers & Acquisitions, Litigation—Securities, Litigation—Tax, Mass Tort Litigation/Class Actions—Defendants, and Product Liability Litigation—Defendants
  • BTI Litigation Outlook 2013
    • “Most Feared Law Firms”—Honor Roll
    • Strong Performance—IP Litigation, Commercial Litigation, Product Liability Litigation
  • Chambers USA/Global
  • Legal 500
  • Benchmark: Litigation/Appellate
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