The plaintiff, the former owner of an office building located in Memphis, Tennessee (building), borrowed $60,750,000 (loan) in 2007. The lender entered into a Pooling and Servicing Agreement (PSA) that created a trust fund into which the loan was placed.

In 2015, the plaintiff defaulted on the mortgage and the trustee and the special servicer had “negotiated to restructure the loan pursuant to a loan modification agreement (LMA).” The LMA permitted the plaintiff to avoid foreclosure and restructure the loan “by bifurcating the mortgage into two notes:” (1) a $43.5 million “A Note,” that the plaintiff was “absolutely required to repay” and (2) a $17 million “B Note,” that would be repaid “if the property generated sufficient proceeds in a sale or refinancing (“notes”).” In consideration of the LMA, the plaintiff invested $5.7 million in “new equity.”

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