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Teaching Japanese lenders the language of workouts.

In the 80's, American real estate lingo was adopted into the vocabulary of Japanese institutions and individuals who lended on or purchased U.S. properties in hopes values would keep rising.

Today, these investors are faced with assimilating such terms as bankruptcy, foreclosure, restructuring and workout.

That's why the law firm of Baker & McKenzie, the largest law firm in the world, is giving seminars on the subject -- in English and Japanese -- to Japanese investors and lenders, and their employees. The first of these seminars to be given in the United States -- "Real Estate Workouts/Restructuring/Foreclosures" -- will be held on Tuesday, July 28, 1992 at The Baker McKenzie Conference Center, 805 Third Avenue (between 49th and 50th Street) 23rd Floor, New York, from 9:00 a.m. to 11:30 a.m.

Baker & McKenzie partner Richard Weidman estimates that two-thirds to three-quarters of troubled real estate loans involve Japanese money. In addition to direct lending and investment, he said, they were co-lenders and participants with most of the major domestic institutions on many of their deals.

"The Japanese were very hungry and aggressive purchasers," Weidman said. "They are involved enormously in the area of problem real estate."

According to Weidman, the workouts are keeping these investors so busy that they don't have the time or the nerve to evaluate new potential deals. Therefore, many of these institutions, like their American counterparts, have stepped out of the lending arena. "There's so much involved in the workout," he said.

The idea for the seminars, Weidman said, grew out of the firm's own experience. As counsel to many Japanese institutions during the boom years, they are now finding themselves involved in many of these clients' restructuring needs. But, talking about these convoluted issues, they discovered, was difficult. Technical concepts like default and foreclosure did not translate easily. To convey them properly, he said, one must be very familiar with the Japanese language and business culture.

"We have found there very often a lot is lost in the understanding," Weidman said.

Lenders Become Owners

The seminars will be presented in English by the New York partners and simultaneously translated into Japanese by Akiro Ito, Esq., a partner in Baker & McKenzie's Chicago Office. And, while Weidman and fellow partners Jeffrey A. Lenobel, Peter J. Korda, Jonathan D. Siegfried, and Robert W. Toan will give broad outlines, the topics will be explained in detail in written materials that have also been translated in Japanese.

Topics include: The transition from owner to lender; environmental and lender liability issues; foreclosures and deeds in lieu of foreclouse; ownership and the U.S. and Japanese tax law implications.

"When you take back property, how should you hold it and what are the tax ramifications," he said.

The seminar is intended for officers and in-house counsel of Japanese institutions primarily involved in real estate lending, workouts and OREO. According to Weidman, most of the Japanese companies hold both debt and equity.

The partners of Baker & McKenzie recently gave a series of seminars in Japan in conjunction with their Tokyo office. They gave six in-house to several institutions, and they held a public meeting in which about 80 real estate investors and professionals attended.
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Title Annotation:seminar offered to instruct Japanese investors and lenders in real estate terminology
Author:Fizgerald, Therese
Publication:Real Estate Weekly
Date:Jul 15, 1992
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