“Thompson & Knight’s William O’Connor Talks CMBS Credit Quality”
William O’Connor, co-chair of the real estate capital markets practice at Thompson & Knight, joined the global law firm as a partner in its New York office in February 2012. Mr. O’Connor, who grew up in Oklahoma and Virginia, represents originators, mezzanine lenders, bridge lenders, servicers and hedge funds in CMBS deals.
Commercial Observer: What challenges are you seeing on the legal side of CMBS right now?
Mr. O’Connor: A lot of people haven’t really dealt with the ruling in the Federal Housing Finance Agency v. Nomura Holding America Inc. case. The judge found that there’s a tension between how deals really close and the desire of the originators, depositors or issuers to reign in closing costs and also keep documents uniform. Oftentimes, when going through the due diligence and closing process, material items are waived, assets are put in or taken out of the pools and changes are made by the business people that are not necessarily reflected in the CMBS documents. What the Nomura case says is that if you don’t do that, there’s massive liability on behalf of the issuers and personal liability in some cases where it’s deemed to be securities fraud.