My name is Paul Watkins. I am a real estate lawyer and I am the subject of the foregoing Report. The Report erroneously states that I am affiliated with Latham and Watkins. This is incorrect (and this error [i.e., that the reporting party did not know the law firm it engaged] may reflect the reporting party's poor fact checking and research skills). Following receipt of BA, MBA, and JD degrees from USC (Los Angeles), I have practiced for 47 years in Southern California with large, medium, and small-sized firms. I have handled many hundreds of large dollar complex transactions ove the past nearly five decades and have represented national and international clients on a variety of commercial real estate, loan, and related transactions.
I have had the good fortune to receive numerous awards and honors in the profession and I continue to volunteer on a number of boards and for a number of community organizations. Although the reporting party did not identify himself, I believe the party is Mr. Mark D. Walsh. I say this because the reporting party states in the Report that he had an "incompetent business partner" who contacted me regarding the engagement. I believe Mr. Walsh's partner is "Bruce". The partner was not as experienced as Mr. Walsh in real estate transactions but Bruce was thoughtful, thorough, and respectful of our advice at all times during the transaction.
Before describing some of the complexities of the transaction, it may be in order to outline a little of Mr. Walsh's background. Before it filed a Chapter 11 bankruptcy petition on September 15, 2008, Lehman Brothers was a well known and successful global financial services firm. Mr. Walsh was the firm's head of the Global Real Estate Group and the Global Co-Head of the firm's Real Estate Private Equity. Mr. Walsh is himself a real estate lawyer who earned a BA from the College of Holy Cross and a JD from Fordham Law School. I do not know if Mr. Walsh ever engaged in the practice of negotiating/documenting complex real estate transactions. Mr. Walsh is not licensed to practice in the State of California. Regrettably, Mr. Walsh left Lehman Brothers with the firm holding $32.6 Billion of loans and assets which in part led to Lehman's bankruptcy filing. Following the filing, global markets plummeted. Under Mr. Walsh's watch, Lehman was forced to mark down investments by $3.6 Billion in 2008 alone, and, in addition, Lehman sold about $7 Billion of commercial mortgages and mortgage securities in 2008 at significant losses.
Despite market signals that credit was tightening, Mr. Walsh led the $22 Billion buyout of apartment building owner Archstone-Smith Trust. Mr. Walsh pushed through this transaction even though some analysts speculated that Lehman should scuttle the deal and eat the $1.5 Billion breakup fee. Some have said that Mr. Walsh---ever aggressive---pushed Lehman into highly risky loans and investments including senior secured debt and mezzanine financing. And he was the regrettable architect of the failed bridge equity, short term loans. And Mr. Walsh's questionable business performance and judgment did not end with Archstone. In Lehman's final days, Mr. Walsh collaborated on the so-called SpinCo plan which also failed, with some arguing that the plan was an example of Lehman's balance sheet manipulation. It is with this backdrop of Mr. Walsh's past business performance and judgment that we respond to the alllegations in his Report. My memory of the subject transaction is as follows:
(1) "Bruce" was the go-to contact business person and decision maker in the transaction.
(2) Mr. Walsh resided in New York and did not participate in the transaction other than to sign closing documents at the end of five months of nearly non-stop 7days a week negotiation and documentation activity. The transaction closed on March 17, 2015.
(3) I believe that over the course of the five months, I shared two (and only two) brief telephone conversations with Mr. Walsh. Fees were never discussed and our statements were generated on a regular monthly basis with full and complete service descriptions. As I recall, Mr. Walsh (and "Bruce") seemed pleased with the fact that the transaction was on track, on time, and proceeding professionally and competently.
(4) The transaction involved the purchase and institutional financing (multiple loans) of a large commercial office tower in Ontario, California. The purchase price was $40,700,000. The multiple credit facilities totaled $30,400,000 secured by Deeds of Trust and other related documents.
(5) The transaction included over 160 separate documents, some of which were hundreds of pages in length. In additon to the lengthy Purchase Agreement and Exhibits, there were eight negotiated opinions of counsel, numerous Leases and related documents for the fully occupied tower and Subordination and NonDisturbance Agreements with each of the tenants. The loan documents alone included lender title policies, escrow letters, closing letters, UCC Financing Statements/Assignments, loan agreements, promissory notes, deeds of trust, letters of credit, interim assignments, permanent assignments, consolidation agreements, environmental indemnities, contract assignments, bailee agreements, comfort letters, joinder and modification agreements, estoppel certificates, and organizational documents (including bring down certificates).
Mr. Walsh is wrong in his Report. Bruce, Mr. Walsh, and the rest of the buyer/borrower team received excellent value for their attorneys' fees paid. The transaction closed on time and without incident. Mr. Walsh's comments are unwelcome, unwarranted, and simply wrong in the extreme. And may I please conclude by saying that I would prefer to receive no further lessons or advice from Mr. Walsh on the successful execution of a complex business transaction given Mr. Walsh's unfortunate past business experiences. Shame on you, Mr. Walsh.
Thank you for giving us the opportunity to respond to these unfounded, errroneous, and wrongful accusations.
Mark D. Walsh Reviews
My name is Paul Watkins. I am a real estate lawyer and I am the subject of the foregoing Report. The Report erroneously states that I am affiliated with Latham and Watkins. This is incorrect (and this error [i.e., that the reporting party did not know the law firm it engaged] may reflect the reporting party's poor fact checking and research skills). Following receipt of BA, MBA, and JD degrees from USC (Los Angeles), I have practiced for 47 years in Southern California with large, medium, and small-sized firms. I have handled many hundreds of large dollar complex transactions ove the past nearly five decades and have represented national and international clients on a variety of commercial real estate, loan, and related transactions.
I have had the good fortune to receive numerous awards and honors in the profession and I continue to volunteer on a number of boards and for a number of community organizations. Although the reporting party did not identify himself, I believe the party is Mr. Mark D. Walsh. I say this because the reporting party states in the Report that he had an "incompetent business partner" who contacted me regarding the engagement. I believe Mr. Walsh's partner is "Bruce". The partner was not as experienced as Mr. Walsh in real estate transactions but Bruce was thoughtful, thorough, and respectful of our advice at all times during the transaction.
Before describing some of the complexities of the transaction, it may be in order to outline a little of Mr. Walsh's background. Before it filed a Chapter 11 bankruptcy petition on September 15, 2008, Lehman Brothers was a well known and successful global financial services firm. Mr. Walsh was the firm's head of the Global Real Estate Group and the Global Co-Head of the firm's Real Estate Private Equity. Mr. Walsh is himself a real estate lawyer who earned a BA from the College of Holy Cross and a JD from Fordham Law School. I do not know if Mr. Walsh ever engaged in the practice of negotiating/documenting complex real estate transactions. Mr. Walsh is not licensed to practice in the State of California. Regrettably, Mr. Walsh left Lehman Brothers with the firm holding $32.6 Billion of loans and assets which in part led to Lehman's bankruptcy filing. Following the filing, global markets plummeted. Under Mr. Walsh's watch, Lehman was forced to mark down investments by $3.6 Billion in 2008 alone, and, in addition, Lehman sold about $7 Billion of commercial mortgages and mortgage securities in 2008 at significant losses.
Despite market signals that credit was tightening, Mr. Walsh led the $22 Billion buyout of apartment building owner Archstone-Smith Trust. Mr. Walsh pushed through this transaction even though some analysts speculated that Lehman should scuttle the deal and eat the $1.5 Billion breakup fee. Some have said that Mr. Walsh---ever aggressive---pushed Lehman into highly risky loans and investments including senior secured debt and mezzanine financing. And he was the regrettable architect of the failed bridge equity, short term loans. And Mr. Walsh's questionable business performance and judgment did not end with Archstone. In Lehman's final days, Mr. Walsh collaborated on the so-called SpinCo plan which also failed, with some arguing that the plan was an example of Lehman's balance sheet manipulation. It is with this backdrop of Mr. Walsh's past business performance and judgment that we respond to the alllegations in his Report. My memory of the subject transaction is as follows:
(1) "Bruce" was the go-to contact business person and decision maker in the transaction.
(2) Mr. Walsh resided in New York and did not participate in the transaction other than to sign closing documents at the end of five months of nearly non-stop 7days a week negotiation and documentation activity. The transaction closed on March 17, 2015.
(3) I believe that over the course of the five months, I shared two (and only two) brief telephone conversations with Mr. Walsh. Fees were never discussed and our statements were generated on a regular monthly basis with full and complete service descriptions. As I recall, Mr. Walsh (and "Bruce") seemed pleased with the fact that the transaction was on track, on time, and proceeding professionally and competently.
(4) The transaction involved the purchase and institutional financing (multiple loans) of a large commercial office tower in Ontario, California. The purchase price was $40,700,000. The multiple credit facilities totaled $30,400,000 secured by Deeds of Trust and other related documents.
(5) The transaction included over 160 separate documents, some of which were hundreds of pages in length. In additon to the lengthy Purchase Agreement and Exhibits, there were eight negotiated opinions of counsel, numerous Leases and related documents for the fully occupied tower and Subordination and NonDisturbance Agreements with each of the tenants. The loan documents alone included lender title policies, escrow letters, closing letters, UCC Financing Statements/Assignments, loan agreements, promissory notes, deeds of trust, letters of credit, interim assignments, permanent assignments, consolidation agreements, environmental indemnities, contract assignments, bailee agreements, comfort letters, joinder and modification agreements, estoppel certificates, and organizational documents (including bring down certificates).
Mr. Walsh is wrong in his Report. Bruce, Mr. Walsh, and the rest of the buyer/borrower team received excellent value for their attorneys' fees paid. The transaction closed on time and without incident. Mr. Walsh's comments are unwelcome, unwarranted, and simply wrong in the extreme. And may I please conclude by saying that I would prefer to receive no further lessons or advice from Mr. Walsh on the successful execution of a complex business transaction given Mr. Walsh's unfortunate past business experiences. Shame on you, Mr. Walsh.
Thank you for giving us the opportunity to respond to these unfounded, errroneous, and wrongful accusations.
Sincerely,
Paul K. Watkins