Westfort is pleased to announce its role as exclusive advisor to a German retail fund (the “Fund”) on the acquisition of a student accommodation portfolio in Germany, secured through a complex non-performing loan (NPL) resolution.

The distressed debt position originated from a senior loan between a UK-based debt fund (the “Lender”) and a UK-based developer (the “Borrower”).

The underlying assets – student accommodation properties constructed in the 1970s – were undergoing substantial refurbishment when the Borrower encountered operational and financial distress. A breakdown with the contractor halted works, leading to loan default and the accrual of significant liabilities, including unpaid utilities, taxes, and contractor fees. On an as-is basis, the asset value had deteriorated substantially below the outstanding loan balance.

Westfort was mandated by the Fund to formulate and execute a transaction that would achieve a clean asset transfer. Westfort led discussions and assessed multiple strategies, including a consensual asset transfer, enforcement over the mortgage or share pledge, and a loan sale.

As negotiations progressed, the Borrower began to shift the goalposts for a consensual deal, prompting the Lender to initiate mortgage enforcement proceedings. The process was anticipated to take 18–24 months before a German administrator would be appointed.

Complicating matters further, a UK entity within the Borrower group filed for Compulsory Liquidation, leading to the appointment of an Official Receiver and introducing another stakeholder into an already complex transaction.
Despite these challenges, Westfort led cross-party negotiations, preserving momentum and maintaining alignment among stakeholders. Westfort ultimately negotiated a discounted loan payoff with the Lender and concurrently secured a commercial agreement with the Borrower for a consensual asset sale. This dual-track approach enabled a clean title transfer to the Fund while mitigating any risk of clawback by unpaid creditors.

Westfort also engaged directly with the Official Receiver, demonstrating how the proposed transaction represented the optimal resolution for the insolvent entity. Consent was obtained swiftly.

“This transaction is a testament to Westfort’s ability to operate at the intersection of real estate and restructuring,” said Deepak Drubhra, Co-Founder of Westfort Advisors. “It required navigating a fractured stakeholder landscape, regulatory nuance, and insolvency complexity—all while maintaining a commercial path to closing.”

Richard Herring, Co-Founder of Westfort Advisors added;

“this project further underscores Westfort’s capabilities in navigating special situations, distressed asset transactions, and complex capital structures”.