It was in court that Frank Norton Jr. first saw Atlanta attorney Simon Bloom III at work. Norton was there to provide expert testimony for Pulte Homes, a developer that Bloom was representing.
“He was trying to protect their rights under a contract. He was very effective, as well as tenacious,” said Norton, president of the Norton Agency, a Gainesville-based real estate and insurance firm with 14 offices in Georgia and Alabama. “I said I want him on my side; someone to go to the mat for me.”
Fortunately, Norton said, his company has needed Bloom’s firm only for routine transactions. “I only develop medical office space today and I am in great shape.”
But in today’s tough economy, many developers and builders can’t repay their lenders, so loan workouts are a hot legal area. When an agreement can’t be reached, foreclosures and lawsuits often follow.
“Every recession will generate this type of litigation,” said Jerry Blanchard, partner in the law firm Bryan Cave in Atlanta. “It peaks during a recession and goes down when the economy recovers.
“I won’t say it’s any uglier now than it has been in past real estate recessions. But we’ve gone through such a period of economic expansion, everybody has forgot what it was like before,” Blanchard said. His practice is focused on financial institutions and he is the author of “Lender Liability: Law, Practice and Prevention” and co-author of “Problem Loan Workouts,” both published by West. “It has been 15 years since we had such a meltdown.”
Residential developers were hit first. Now commercial developers are feeling the pain. In fact, foreclosure notices in metro Atlanta jumped to a record high in March. There were 12,568 foreclosure notices in the 13-county metro area for March, up 22 percent from February and 24 percent from a year ago, according to Alpharetta-based Equity Depot.
Foreclosure, however, doesn’t always end a borrower’s troubles. Sometimes a lender will sue for the balance owed, and that’s where Bloom comes in.
“I represent some of the biggest builders in metro Atlanta when their lenders come calling,” Bloom said. “The goal is to come to a palatable resolution. It is very rare to be completely absolved from the debt.
“The banks have culpability and are at fault to some extent for where we are. They were throwing money out the front door, assuming returns on these loans would continue forever,” said Bloom, whose office is in the Equitable Building in downtown Atlanta, which last summer became metro Atlanta’s first significant commercial foreclosure.
Bloom formerly was a litigation partner and head of the real estate litigation group at Powell Goldstein, which merged with Bryan Cave last year. Bloom started his own firm with two lawyers in March 2007, just before the real estate market started to crumble. Now the firm has 10 lawyers and is moving into its own building in Midtown. Clients include Buckhead Homes, Cousins Properties, DeKalb Regional Medical Center and RealtyLink, among others.
Bloom was selected as one of 12 lawyers under 40 to be considered “On the Rise” by Fulton County Daily Report last year. Among other recognitions, Super Lawyers Magazine, in its 2010 selection of Rising Stars, named three of the firm’s attorneys, including Bloom. Because of his forceful personality, some clients and judges call him “the freight train.”
Bloom freely admits he does not like to lose.
“He is very diligent, very focused on our needs,” said Tama Retherford, general counsel with Atreus Homes & Communities, a residential construction company that Bloom is representing in ongoing litigation.” He keeps us very informed about the matter he is working on.”
She declined to be more specific about the legal issue. But Bloom, she said, “certainly has a big personality.”
The major reasons suits are filed against banks fall into two legal categories, Blanchard said: breach of contract and lack of good faith and fair dealing, “if a borrower thinks he was treated improperly.”
And that’s where lender liability comes in. Bloom said he combs through loans to see if the lender has done everything right.
Most of the firm’s work is in Georgia and Florida. Bloom said the firm has 40 or 50 or more ongoing cases representing more than $1 billion in debt.
Bloom and other real estate attorneys are likely to remain busy for awhile. Industry analysts predict more foreclosures this year and next year as billions of dollars in real estate loans mature.
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Meet Simon H. Bloom III
Position: Founder and partner, the Bloom Law Firm in Atlanta
Age: 39
Education: J.D., University of Virginia School of Law; B.A. with distinction, University of Virginia.
About the firm: Founded in March 2007 with two lawyers, the firm has grown to 10 attorneys. The firm offers a wide range of civil litigation, including real estate and employment.
Source: The Bloom Law Firm
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