MCA Provides Expert Rebuttal Reports and Litigation Support for Commercial Lender

Prior to the pandemic, a multibillion-dollar international commercial lender loaned over $30 million to a commercial real estate developer secured by a mixed-use real estate property in a major Western city. Within two years, the borrower failed to meet its covenant requirements, going into default, and subsequently failed to make contractually required re-margin and loan acceleration payments. At the lender’s request, the Court appointed a receiver.

Multiple unsuccessful attempts were made during the receivership to sell the project, which had steadily decreased in value due to accelerating weakness in the commercial real estate market. Ultimately, the lender sued the borrower seeking repayment of the loan, while the borrower counterclaimed that the lender failed to act with commercial reasonableness and breached its duty of good faith and fair dealing, among other claims.

MCA was retained by the lender’s counsel to issue a rebuttal report to the borrower’s opposing expert report. Although the loan’s defaults had evolved over several years, the engagement required an urgent timeline. MCA’s final report was due within 10 business days of its engagement, which fell during the end-of-year holidays.

MCA worked swiftly and diligently to review all relevant materials—including loan documents, receivership materials, pleadings, correspondence, and other financial and operational documents—and to review and analyze the opposing expert’s reports. Collaboration was essential for MCA, including splitting topics and cross-reviewing sections between teams to ensure on-deadline delivery and working closely with counsel throughout the process.

On a highly accelerated timeline, MCA prepared an expert report setting forth its findings and opinions regarding the parties’ conduct and rebutting the opposing expert’s report. Later, MCA drafted another report that rebutted the findings and opinions in a second expert report issued by the borrower’s expert. MCA also drafted a direct examination outline and demonstratives in preparation for trial testimony. These materials were used by counsel during the negotiation process that ultimately led to a settlement just before trial began.

This project sat perfectly at the intersection of a few of MCA’s different service lines. The lender’s counsel had sought out MCA specifically for the team’s experience in turnaround and restructuring, as well as litigation support. Counsel believed this would help him overcome any challenges to exclusion, because that background would provide a sufficient basis to testify regarding standard of care matters and the commercially reasonable actions taken by the lender. In addition, an MCA team member’s experience as a receiver positioned him well to comment on the appropriateness of the conduct of the receiver in the matter.