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PODCAST

TRANSCRIPTwww.distressedpro.com

6 Key Components to a Successful Distressed Assets Fund

Brecht Palombo and Warren Kirshenbaum

Brecht:Gooda&ernooneverybody.IampsychedtohaveWarrenKirshenbaumonthephonetoday.Warren’sana:orneyImetmaybeayearortwoormaybeeventhreeyearsagonow.Heislocaltome,he’sjustoutsideofBostonandI’mexcitedtohavehimonthephonetodaymainlybecauseofonethinginparDcularthathe’sbeenpre:yinvolvedinandthat’sbeenstructuringdistressedassetfunds.

Infact,Warren’sbeentheleada:orneyinassemblingandstructuringdistressedassetfundsandcreaDngtheequityraisestrategiesforfourseparatedistressedassetinvestmentfundsin2009.FullyleveragedthefundsizeWarren’sbeenworkingonrangefrom$3millionto$35million.

ThefundsrangefromthoseseekingsinglefamilyhomestothreetosixfamilyhomesandcommercialproperDesbothretail,industrial,flex,mulD‐familyandreallythewholegamete.

WarrenhasalawdegreefromNewEnglandLawandamaster’sincorporatelawfromNYU.HepracDcedinNewYorkbothin‐houseforWallStreetInvestmentHouseandinprivatepracDceforalawfirm.

Hewasthegeneralcounseltoalargerealestatedeveloper,managerandbuilderbasedinTexasandnowuseshiscorporatesecuriDesbackgroundinrealestatetaxbackgroundtothegreatbenefitinstructuringdistressedassetfunds.

SoWarrenthanksforbeingonthecall.

WarrenKirshenbaum:ThankyouBrechtthatwasreallynice.Thankyou.

Brecht:Well,thereasonIwantedtohaveyouonthecallisrecentlyIsawsomethingthatyouwroteanditjustreallystruckmebecauseinmyposiDonIhavealotofpeoplewhoaretalkingtomeaboutfundsandthey’repuYngtogetherafundorthey’rejustclosingonafundorthey’rebirddoggingforafundorwhathaveyouwhereyouarereallygeYngalotofexperiencewiththisquicklyrightinthethickofitthatyou’dbejusttherightguytotalkto.

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So,tellmewithoutrevealingtoomuchaboutafundmaybethatyou’vesetuprecently?

WarrenKirshenbaum:Okay.There’stwofundsthatareinteresDng.Oneisafundthatisfocusingoncommercial,I’msorry,residenDalassets.Andthey’relookingforsingle‐familytypedistressedassetslikesinglefamilyhomesandsmallmulD‐familyuptoabout12units.

Brecht:Okay.

WarrenKirshenbaum:AndtheyhaveanintricatestructureinthattheyarepuYngtogethertheholdingcompanyandthenraisingthefunds,severalfunds,subsequenttothat.

ThefirstonewillbethisonethatfocusesonsinglefamilyandsmallmulD‐familyandthenit’sgoingtomoveontodifferenttypesofassets.Somewillbelargeapartmenttypecomplexesaswellasthey’relookingtopurchasethemortgagesandnotesandthingslikethatandputthatintoafund.

Soit’skindofacomplexfundwhichisstarDngoutraisingmoneyrightatthetopattheholdingcompanylevelandthengoingdownfromthere.

Brecht:Okay.

WarrenKirshenbaum:Thesecond,onejustbriefly,ispurelyfocusingoncommercialassetsanditisabunchofdevelopersthatareexperiencedinaparDcularareathathavethelocalcontacts.Theyknowit’stheirbackyard,ifyouwill,andsothey’reraisingalargeamountofmoneyandthey’relookingtopurchaseassetsthattheyknowareundervaluedinthemarketplaceandthatisagoodonebecausethey’veveryfocused.They’reknowledgeableintheirparDcularareaandtheinvestorsareinvesDnginsomewhatofaknownquanDty.

Brecht:Okay.Welllet’sgetintothedetailsthenali:lebitormaybeaboutthespecificfundsorhoweveryouwanttodoit.ButIknowthatyouhadlaidoutsomeveryclearpoints,sixofthem,andIkindofwanttomovethroughthoseali:lebit.AndthefirstonethatyouhadwasknowyourpurposeandIwonderifyoucouldtalkaboutthatali:lebitandsortoftheconversaDonsthatyou’rehavingwithyourclientsasyou’repuYngthesefundstogetherandknowingtheirpurpose.

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WarrenKirshenbaum:Okay.Whatwe–IstartedthisasIsensedinthemarketthatcapitalwasbecomingverydifficultformyclientstosecureeventhoughtheopportuniDeswhereoutthereintermsofundervaluedproperDesandgoodbuysfortheclients.

Althoughwedidn’tinventtheconceptwestartedtotryandrefineitinthesensethattheseparDcularclientsthatI’dbetalkingtowouldtryandcreateapoolofinvestorfundswhichtheywouldholdinafundtypeenDtyandtherebybecreaDngtheequitythattheyneedtogooutandpurchasedistressedassetsandtheconceptisthatthiswillgivethemtwothings;onebeingthey’llbeabletomeetevenmorerestricDveunderwriDngrequirementsfrombanksorthey’llbeabletonegoDatewithoneinsDtuDoninparDcularthattakesalookattheirbusinessplanandispreparedtoridewiththeminacquiringtheseassetsknowingthattheyhaveapoolofcapital.

Brecht:Okay.

WarrenKirshenbaum:Okay,andsecondlywe’vefoundthatthereareanumberofinvestorsoutthereinthemarketparDcularlywiththeresidenDaltypedistressedassets,moreifit’ssinglefamilyhometypeproperDeswheretheseinvestorsbecomecashpoorandtheyhavesecuredpurchaseandsaleagreementsorevenclosedonsomeassetsbuttheyneedtogetridoftheseassetsquickly.Andthey’rehappyifthey’vepurchasedormet50centsonthedollartomakea10or15centprofitandthengivethemofftoclientsofmine.

SohavingafundinplacemakesmyclientshaveapreferableposiDonwiththesellersofassetsandtheyhaveasourcetogetridoftheirdistressedassetswhentheyhavepurchasedtoomanyortheyneedtoloosenupsomecash.

Brecht:Okay.AndsoasIunderstanditthen,letmejustkidofrecapthatbecausemaybeI’mali:ledumbbutIjustwanttomakesureIunderstand.Soyourclients,inthisparDcularfundanyway,intermsofknowyourpurpose,whattheirsisisthey’resortof–itsoundslikethey’realmostarescuefundwherethey’veassembledcapitalandthey’regoingtocomeoutandkindofswoopinonsomeotherpeoplewhoaredigginguptheopportuniDesoramIgeYngthatright?AmIclose?

WarrenKirshenbaum:Yeah,thatisclose.

Brecht:Okay.

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WarrenKirshenbaum:Ithinkthattheywouldalsotalktopeoplelikeyouwhohaveknowledgeofassetsinthemarketplace.Maybeevenlendersthathaveablockofassetsthattheywouldbepreparedtoletgo.

Brecht:Isee.

WarrenKirshenbaum:Sobuttheconceptis,isifthere’safundinapoolofcapitalthey’llbeabletogetbe:erpricingoraslewofbe:erassets.

Brecht:Okay.

WarrenKirshenbaum:Soinasenseitmeansthattheconceptistopullinvestorequityandgooutandpurchasetheseassetsbutknowwhatyourbusinessplanisbeforegoingintoit.

So,forinstance,ifyou’reonlylookingatsinglefamilyhomesoryou’relookingtopurchaseblocksofproperDesfrombanksorapproachingpeoplelikeyouthesearealldifferentsourcesandIthinktheyrequiredifferentplanningandstrategies.

SoI’msayingcreateyourbusinessplanindetailupfront.

Brecht:Okay,allright.Sonumber1,knowyourpurpose.Number2,createaso&offering.What’saso&offering?

WarrenKirshenbaum:WellthewaythatI’vebeendoingitisaprivateequityoffering.WhichmeansthatweareseYngupanenDtyandthensellingoffalargepercentageofthatenDtytoinvestorssoit’sasaleofsecuriDesbutit’sexemptfromregistraDonunderboththefederalandthestatesecuriDeslawssolongasyoufollowthelegalrequirement.

SoI’msayingthatyoushouldbecreaDngasetofofferingdocumentswhetherthat’saprivateplacementmemorandumoraninvestorpresentaDoncoupledwiththeoperaDngagreementorlimitedpartnershipagreement,subscripDonagreements,investorquesDonnairesandyou’remeeDngallthelegalrequirementssuchthatyou’refullydisclosingtoinvestorswhatthedealis,whatthey’regeYng.AndyouaregeYngappropriateinvestorsfortheinvestment.

Brecht:Okay.Sointheso&offeringisthisfamilyandfriendsmoneyisthatwheretheygenerallystart?

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WarrenKirshenbaum:Itisfamilyandfriendsmoneybutitneedstoexpandali:lebitbeyondthattogetthefundofftheground.

Brecht:Sure.

WarrenKirshenbaum:Soyouwillbe–inevitablyit’sgoingtobefamilyandfriendsandthensome.

Brecht:Okay.Andsoareyoulimitedatalltothescope?Iguessthistakesustonumber3,raisecapital.Arewelimitedatallinscopeintermsofwhowe’retalkingtoorhowmanypeoplewe’retalkingtoorhowmuchmoneywe’retakingfromthemindividually?

Tellmeabouthowthatworks?

WarrenKirshenbaum:Yeah,excuseme.It’sallofthosethingsinvariaDons.

Brecht:Okay.

WarrenKirshenbaum:BasicallythesecuriDeslawdefinesaccreditedinvestorsandnon‐accreditedinvestors.WithaccreditedinvestorshavingaparDcularrequirementsastowhattheirnetworthannualincomepriorandexpectedannualincomeistheirknowledgeofthesetypeofinvestmentsandthere’saspecificsetofparametersthatthefederalsecuriDeslawsgointowhichensuresthatpeopleare,socalled,accreditedinvestors.

AndyoucanlimityourofferingtoaccreditedinvestorsifthatisallthepeoplethatareinvesDnginyourparDcularfundthenitisunlimitedinhowmanyyoucanhave.

Brecht:Okay.SoIseealotoffundswhereyoudohavetobeanaccreditedinvestor.What’sthedifferencewhenyoudon’thavetobe?Howdoyoumakeitokaythatthey’renotaccreditedinvestors,yourinvestors?

WarrenKirshenbaum:Wellit’smuchriskierandclearlyanon‐accreditedinvestorcouldbesomebodythattheinvestmentisnotappropriateforthem.

AndagoodexampleusuallyisthatyoumayhaveaninvestorbecausethesecuriDeslawparameterstalkaboutannualincome,networth,thingslike

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thatsoyoumayhaveapersonthatactuallyhasahighenoughincomeoralargenetworth,forinstance,fromanestateyetthatpersonisnotsophisDcatedinthistypeofinvestmentsoitwouldbeinappropriateforthem.

AndthosearethekindoflegalissuesthatIgetafraidofandI’madvisingmyclientstobecarefulabout.

Brecht:Sure.

WarrenKirshenbaum:Sointhatcircumstanceifyouhaveanon‐accreditedinvestortheymightbecomingtothetablewithafinancialadvisorandifthatfinancialadvisorisgoingtobereceivingallthedocumentaDon,analyzingitandthenmakingthedecisiontogetherwiththeirclientthenthatmightturnouttobeappropriate.

Brecht:Okay.

WarrenKirshenbaum:Butit’safactualbasedconsideraDon.Soifyouareanaccreditedinvestorthenit’sclearlyamuchmoreappropriateinvestorfromthefundsperspecDve.

Brecht:Okay.AndareyouseeingtheprinciplesinthefundshowupandstartthefundwithsomesignificantiniDaldepositorwhat’shappeningthere?

WarrenKirshenbaum:Theycandoiteitherway.I’veseenthatthefundstendtobemoresuccessfulinraisingmoneyandgiventheinvestorsconfidenceifthefoundershaveinvestedactualmoneyintothefundthemselvesinaddiDontopayingthestartupexpensesorthesweatequitythattheyareobviouslypuYngin.

Brecht:Right.

WarrenKirshenbaum:Sothosedealsthatcomeupwithfoundersofthefundnothavingputtheirownmoneyinthosebecomemoredifficult.

Brecht:Okay.AndsogetsomecredibilitybypuYngsomeskininthegame.Gotoyourfamilyandfriendsandthatsortofathingtokindofstartandthenhowelsearepeopleraisingcapital?

WarrenKirshenbaum:Peopleareraisingcapitalthroughappropriatecontactwithindividualsandindustriesthattheyknow.

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Brecht:Okay.

WarrenKirshenbaum:Theclearlegalparameterhereisthatforanofferingtobewhatyoucalltheso&offeringsoitwouldbeexemptfromregistraDon.ItcannotbewidelydistributedoradverDsedandyoumustbeabletobeincontrolofwhoreceivesthesedocumentssothatyoucandeterminewhetherit’sappropriateornot.

Soitispossiblethatifthere’sseveralfounderstogetherwiththeirprofessionaladvisorsandeachofthemcompilealistofpersonsthatmaybeappropriatetheycouldspreadsheetthatanddosomeinvesDgaDonandcomeupwithalistofpeoplebeyondfamilyandfriendsthattheybelieveareappropriate.

Brecht:Okay.

WarrenKirshenbaum:AslongasyouaremakingsurethattheyhavenondisclosuredocumentaDoninaffectwithallthesepeople.YouknowwhohasreceivedthedocumentaDon,youhavecontrolnumbersandyoucanidenDfythatthenyou’recomplying.

Brecht:Okay.

WarrenKirshenbaum:It’swhereyouwidelydistributeitorhireabrokerdealerorgointoamassdistribuDonofthesedocumentsandyoucannottellwherethesedocumentshavelandedthatyoumaybecome–oftheregulaDons.

Brecht:Okay.Allright,soitsoundslikeprofessionalnetworkingisprobablythethirdpieceofthatinordertokindofkeepitundercontrol?

WarrenKirshenbaum:Yes.AndalsoIwouldsayjustfromexperiencethatevenifyou’refollowingalltherulesandregulaDonsandyouhaveaverywellcra&edsetofdocumentsthatcomplieswiththesecuriDesregulaDonsyouhavetoexecuteonthatappropriately.

Soforinstanceifyouthen,oneofthepeopleworkingwithyouwentovertoanursinghomeanda:emptedtosellthesekindoffundsecuriDestoanelderlypersonthatwouldDeup90%oftheirnetworthormorethanthatwouldbeinappropriatedespitethefactthatyourdocumentaDonisgood.

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Brecht:Okay.Okay,sodefinitelyitsoundslikethere’ssomemoralhazardsintheretoo.Andyou’regoingtojustmakesure–well,Iguessyou’vegottohavepropercounselonhowyou’reapproachingwhoyou’reapproaching.

WarrenKirshenbaum:Correct.

Brecht:Okay.Andsonumber4youhavehere,idenDfyappropriateopportuniDes.AndIknowthatthat’ssomethingthatIspendalotofDmewithandcertainlythemembersofthesitethat’slargelywhypeoplearememberslookingforappropriateopportuniDeswithbanksandthatsortofthing.Howelseareyour–thefundsthatyou’vehelpedputtogether,howaretheyfindingopportuniDes?

WarrenKirshenbaum:SubscribingtoWebsiteslikeyours.SomeprofessionalnetworkingsiteslikeLinkedInmayhaveasubgrouptherewherepeopleneedeachotherandsomepeopleareprivytocertainliststhatfinancialinsDtuDonshave.

They’renetworkingwithbrokers.It’sjustwhoyouknowIwouldsay.

Brecht:Right.Okay.Sonumber5,I’vekindofsurmisedit,andthesearemywordsandnotyourssoI’dliketohearyourwords.Iputknowyourlimits.

Itkindof–Igotasenseforwhatyouhadwri:en.Tellmeali:lebitaboutthatpoint.

WarrenKirshenbaum:Ithinkthat’sverysmartonyourbehalf.Ithinktheunderlyingthemehereisthatyouneedabusinessplanandthatgoesthroughstep–that’sbehindthestep1point,thestep4andnowstep5.

Andifyou’veidenDfiedwhichtypeofassetsyouaregoingtotargetinwhichparDcularareaandyouhaveasetofinvestmentparametersintermsofevaluaDngtheassetknowingwhatit’sgoingtotaketorehabilitatethatintermsofmoneyandeffort,thepihallsthatareinparDculartypesofassets.You’llbemoresuccessful.

SoIthinkifyoudon’tknowyourlimitsandyou’rejustgoingoutthereandthinkingthatyou’llbeabletosnaganytypeofundervalueassetwhetheritbeafourfamilyhomeorasinglefamilyhomeorsomethingmorethanthatIthinkthatisastrategythatmayleadtoissues.

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Brecht:Okay.

WarrenKirshenbaum:Ialsothinkthatyouneedto–ifyouaregoingtodevelopafundonceyou’veraisedthemoneyandyou’reouttherethere’salotofworkandthere’salotofpaperworkasadministraDon.

Forexample,therewouldbeleasingissues.You’vehavetofilltheunitsup,youhavetohavethelegaldocumentaDoninplace,you’vegottohaveapropertymanagereitheronsiteoravailableatoddhourstodealwithtenantissuesbutyou’vegottohaveintheofficetheabilitytomanagethepropertyfromthestandpointoffinancingandthosebehindthescenefactors.

SoittakesupalotofDme,effortandenergyandIthinkyouneedtoknowormakesurethatyou’recapableofexecuDngonthat.

Brecht:Especiallya&eryou’vemadepromisesandtakenmoneyandthissortofathingIwouldassume.

Ali:lehigherstakesthenifyou’rejustinthegameaskindoftheloanwolf.

Okay,soittakesustoournextpointwhichwaspointnumber6,communicaDonorcommunicate.Tellmeali:lebitaboutsortofwhatyourecommendorhowthat–what’sappropriateinthissortofafundsituaDon?

WarrenKirshenbaum:Well,ItriedtobeassimpleasIcouldintheseDpsbutitcangetverycomplicated.Andonceagaingoingbacktothebusinessplanthey’llbecertainthingswhichyoumayormaynotpromiseinyourofferingdocumentsandsobywayofexampleyoumaybemakingdistribuDonsonanannualbasisoreverytwoyearsoryoumaybeafundwherethere’snodistribuDonsthataregoingtobemadeatall.AndIthinkyouneedtobeclearinyourofferingdocumentsastowhetherornotyou’remakingdistribuDons.Andwhat–andthereforewhattypeofaninvestmentthisisbecausefirminvestorswillequatethistoaninvestmentwheretheyhavetheabilitytoretrievetheirfundsinthreeyearsiftheyfeellikeitwhereasthisisnotthattypeofinvestment.

Sothatneedstobemadeclear.Butifyouhavemadethekindofpromises,ifIcouldusethatwordinyouofferingdocuments,thatyouaregoingtobemakingdistribuDonsthenthatnowleadstoanobligaDontomakesurethatyouarereporDngappropriatelytotheinvestors.CreateacompliancefuncDonbecauseyoumayhavetobesellingassetsatpre‐

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determinedDmesinordertomakethesedistribuDonsversusjustrunningtheoperaDononcashflow.

AndsoI’msayingthatyouneedtobecareful.Youneedtokeepyourinvestorsinformed.YouneedtofulfilleveryoneoftheseobligaDonsorpromisesyoumadeintheofferingdocuments.Andtodothatyou’regoingtohavetohavesomekindofbackofficeoperaDon.

Brecht:Okay.

WarrenKirshenbaum:AndIthinkthatneedstobethoughtthroughveryclearlyastohowyou’regoingtoexecutethis,howmuchit’sgoingtocostandhowyou’regoingtokeepyourinvestorsinformedandcommunicatewiththem.

Brecht:Okay,goodstuff.Sowhat’sthebiggestmistakeoristheremorethanonethatyouseepeoplemakingwhentheywanttogetadistressedassetsfundgoing?

WarrenKirshenbaum:Theyarenotfocusedenoughintheirbusinessplanandthey’rekindofshooDngallovertheplace.Ithinkthatpeoplealsodon’t–theydon’tunderstandhowdifficultitistoraisemoneyandwhatisinvolvedinthat.Sothatprocessisalwaysmorearduousthenpeoplereallybelieve.

IwouldsaythosearethetwobigonesIwouldfocusonhere.

Brecht:Okay.Soletmeaskyouthisandwewon’tholdyoutoanything.I’mnotgoingto–we’renotgoingtocallandseehowthisworksoutbutthisissomethingthatIliketoaskeverybodyI’mhavingthesecallswith.

Useyourcrystalballandtellmehowlongthisdistressedrealestateopportunityisgoingtolastandwhyifyouwould?Whyyouthinkthat.

WarrenKirshenbaum:Okay.Ithinkthatit’ssDllgoingtobequiteawhile.

Brecht:Okay.

WarrenKirshenbaum:Meaningdefinitely2010andprobably2011andmaybebeyond.

Ithinkthatthefactors,theunderlyingeconomicmetricfactorsarethesamenowastheywerewhentheworldwasfallingapartinfallof’07.

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Brecht:Okay.

WarrenKirshenbaum:InthesensethatIthinkthereisafeelingthatwe’reoutoftherecessionandthingsarebe:erandcertainlytheyhaveimprovedbutalotofthesamefactorsaresDllprevalentandIthinkthatthedefaultsituaDonhas,intermsofresidenDal,hasshi&edtoconsumersthathadordinarytypeloansandnotjusttheexoDcloansorthesubprimetypeproduct.

There’shighunemploymentandjoblossesandthingsofthatnatureandIthinkintermsofthethingsthatthegovernmentwasabletoadvocateshouldbedonelikeloanmodificaDons.Idon’tknowthattheymadealotofsensetothefinancialinsDtuDonssoIdon’tknowthattheydidorcompletedalotofthemandsoIthinktherewerecertainlawsputinplace,forexample,inMassachuse:swehavetogiveaconsumera90daybreakiftheyfallbehindinthemortgage.ThatandthefactthatIthinkfinancialinsDtuDonsmayhavejustbeenholdingbackonactuallymovingforwardorforeclosures.

TherewasthecourtdecisioninMassachuse:sthatseemedtoinvalidateforeclosuresbasedonassignmentbackdaDngissues.

Sothere’salotoffactorswhichsignalifthere’sbeenastabilityinforeclosurepercentagesofforeclosuresoritlookslikeitmayevenbedroppingthatthat’safalseposiDve,ifyouwill.

SoIthinkthatthat’ssDllgoingtobeoutthereandsDllbeathreattoourmarketplaceandthere’sbeenwidespeculaDonthatthecommercialmarketplacehasn’treallyseenitsworstdaysyet.

SoforthesereasonsIwouldthinkthatwe’regoingtoseethisthrough2010andinto2011atleast.

Brecht:Yeah,Ithinkyou’rerightandjusttopickupononepointthatyoumenDonedtherewhereyoutalkedaboutmaybebanksnot,mywords,notpullingthetriggeroncertainassetsthatmaybeshouldbemovingthroughtheforeclosureprocessandthissortofthing.

Youdefinitelycanseethatinthebankprospectordatathatthebulkoftheproblemsareinnon‐accrual.It’snot–there’smany,manybillionsofdollarsthatjusthaven’tmovedoutofthenon‐accrualstageintowherethey’reactuallybeingprocessedandbecomingREOorelsebeingsoldoff.

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AndsoIthinkyou’rerightonalotofthosepointsthere.

WarrenKirshenbaum:Thankyou.

Brecht:AndDmewilltell.

WarrenKirshenbaum:Yeah,exactly.Youwon’tcallmeupthough,right?

Brecht:Sowhoareyoulookingtomeetandnetworkwithoutthere?Justwho’s–wherecanyouworkIguessisonethingpeoplemightwanttoknow.Ifsomebody’ssiYnginKentuckycanyouputtogetherthepaperworkforthemtodoadistressedassetsfundorisitMassachuse:sonly?

Sotellmeali:lebitaboutwhoyou’relookingtomeetandworkwithandanybodyelsethatoughttocontactyou.

WarrenKirshenbaum:Okay.WellthesecuriDeslawsarefederalsecuriDeslaws.SotheprimarypartofhowIfundwouldbeorganizedandstructuredinordertocomply.ThefederalsecuriDeslawswouldbethesamewhicheverstateyou’rein.

TheneachstatedoeshaveitsownsecuritystatutewhichtheyrefertogenerallyastheblueskylawsandsoifyouaredoinganofferinginaparDcularstatethenyouneedtopaya:enDontotheblueskylawsinthatparDcularstate.

Butitwouldbepossibleforsomebodywherevertheyareinthecountrytobeabletotalktomeorhiremebecausewe–evenifwereseYngupafundinMassachuse:swedon’tknowwherethoseulDmateinvestorsarecomingfrom.

Sosomebody’sfamilyandfriendsmaybeinFloridaorChicagoorNewYork.Soevenalocalfundherewemaybelookingattheblueskylawsofthree,fourorfivedifferentstates.

Soitwouldn’treallyma:ertomeorimpededmeinanywayifsomebodywassiYnginthestateofKentuckyandtheyweregoingtoberaisingtheirmoneytheirinTennesseeorTexas.Itwouldn’tma:eratall.

Brecht:Okay.

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WarrenKirshenbaum:IthinkI’vedevelopedagoodblueprintandtheformulaandbeinginthetrenchesonthisandIthinkthatexperienceiswhat’svaluable.

Brecht:Okay.Andsopeoplethatshouldcontactyouoranybodywho’slookingtoputtogetherafund,arethereothertypesofdistressedassettypebusinessthatyou’redoingtodayoristhatthemainfocus?

WarrenKirshenbaum:That’sthemainfocus.It’sjustthattheproductitselfmaydiffer.Forinstance,there’stalkofcertainfundswhichmayinvolvetaxcreditsoraffordablehousingorbelimitedtoaparDcularassetclasslikeIsaidbeforethepaper,insteadofbuyingthephysicalassetsaparDcularfundmayfocusonpurchasingthemortgagesornotesforadiscount.

Sothefundconceptisallthatwe’reconcentraDngonbuttheactualassetclassisdoingtodiffer.

Brecht:Okay.Sohowdopeoplegetaholdofyou?Howdotheyfindyou?

WarrenKirshenbaum:Telephone,email.TheycouldcheckouttheWebsite,theblog,whereIdescribedhowtosetthisout.

ShouldIjustgoaheadandlistallofthis?

Brecht:Yeah,shoot.

WarrenKirshenbaum:Thetelephoneis781‐239‐8900.Emailiswkirsheenbaum@oarlaywers.com.

Brecht:Okay,great.Andwhat’syourblog?

WarrenKirshenbaum:Theblogish:p://distressedassets.wordpress.com.

Brecht:Okay,awesome.WarrenIreallyappreciateyoucomingontodayandIknowthatthisishelpfulformeespeciallylikeIsaid,I’vegotalotofpeoplecallingmewith–they’redreamingofafundorthey’restarDngafundorthey’vejustclosedafundandthissortofthingandsoyou’vereallybroughtsomeclarityformeonafewthings.

AndI’dlovetotalkwithyouagaindowntheroad.Sothanksforbeingontoday.

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WarrenKirshenbaum:WellthanksBrecht.AndIjustwantedtosaythatthishastobebriefinhavingtheconversaDonbecausethesethingscangettechnical.SotheremaybepointsthatIwasn’tabletocoverorwentoververybrieflyandsothere’samuchlargerlevelofdetailontheblogandcertainlywecouldfollow‐uponthis.

ButIwantedtojustletyouknowthatthisisn’tanAthroughZofeveryissuethatapersoncouldcomeacross.

Brecht:Ohsure,absolutelynot.Wellweappreciateyoulayingoutheretodaywhatyoudidandlookforwardtotalkingtoyouagain.

WarrenKirshenbaum:Thankyouverymuch.

Brecht:Okay,thankyou.

WarrenKirshenbaum:Okay.

Brecht:Bye‐bye.

END

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