Shifting of rent leaves no recourse

Trial Notebook

By Steven P. Garmisa

Hoey & Farina

Posted June 21, 2019 3:44 PM

After defaulting on more that $20 million in nonrecourse mortgage loans, Springfield Prairie Properties LLC bet that it could transfer $3 million in rental income from the property into the client trust accounts of its lawyers — and direct the attorneys to use hundreds of thousands of dollars for advance payment retainers, plus distributions to members of the LLC — without triggering a provision (Section 1.5(Y) of the promissory notes) that automatically converted the obligations into recourse debt if …

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