Raising Capital to Settle a Legal Dispute on a Semi-Commercial Property

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Sometimes, a bespoke loan can quickly resolve a tricky, potentially ugly legal dispute. Say a commercial landlord with a mixed-use property (retail on the ground floor, a flat above) faces a legal dispute with a former business partner over equity ownership. Here is how we could help:

Client profile:

  • Client: UK resident/national
  • Age: 54
  • Profession: Commercial landlord
  • Asset: Mixed-use property in Leeds with retail on the ground floor and residential units above
  • Debt Issues: Legal dispute with a former business partner over equity ownership
  • Referral Source: Real estate lawyer acting for client in the settlement process

The problem:

The underlying client owned a valuable unencumbered semi-commercial property in central Leeds, held in their personal name. They had recently exited a protracted legal dispute with a former business partner who had claimed an interest in the building.

While a settlement was agreed, the client still needed to raise £300,000 within eight weeks to meet the terms or face further court action.

They could turn to a high street lender for help, but would likely be declined due to the litigation history. To add additional complication, the client would not be able to release funds through conventional channels. Fortunately, the solicitor they’d be working with could referred them to us to explore alternative options.

The solution:

We could work closely with the legal teams involved to arrange a 2-year fixed commercial interest-only facility, secured against the property. The building had strong rental income and a good tenancy profile, enabling Market Financial Solutions to take a pragmatic view despite the recent dispute. To exit out loan, the borrower could sell a secondary asset in their portfolio, or refinance once the legal situation was fully resolved.

Example terms of the loan:

  • Gross loan amount: £328,893 (including fees, rolled up, and deferred interest)
  • Net loan amount to client: £300,000
  • Product type: 2-Year Fixed Commercial Interest-Only
  • Rate: 6.59% per annum fixed
  • Interest structure: Interest serviced monthly, with flexibility to roll up in the short term if required
  • Exit plan: Sale of a secondary asset in his portfolio or refinance once the legal situation was fully resolved

The outcome:

Our loan would allow the borrower to:

  • Settle the legal dispute, and secure full ownership of the property
  • Avoid further court costs or reputational damage

The client could now service the loan comfortably from rental income and plan to refinance at the end of the fixed term to release additional funds for refurbishment works.

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