Commercial mortgage-backed securities special servicers are becoming increasingly aggressive over control rights for legacy securitizations. LNR Partners, Torchlight Loan Services and C-III Asset Management are among the special servicers who are involved in litigation aimed at either affirming or wresting control of the special servicing rights on a number of pre-crisis deals.

The battle for control has become more pronounced as realized losses in legacy CMBS deals creep higher up the capital stack. As the bottom tranches get wiped out, the controlling class shifts up the capital stack.

One executive said the litigation highlights the increasing financial pressure special servicers are under. As special servicers face increasing pressure to maintain a profitable bottom line in both legacy and new issue CMBS, they are becoming increasingly aggressive in their fight to gain or retain control rights. “It’s all about the fees,” he said.

LNR Cases

According to a recent....

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