Land Swindle

[rreese]

o Party A (me)entered into an agreement of sale with Party B (developer) to sell 108 acres for $12,000 per acre. Party A agreed to finance $1,043,661 of the purchase price.
o Party B executed and delivered a purchase money note in the face amount of $1,0430661, plus interest at 9% per annum on the unpaid principle.
o BANK made a $1.2M construction loan to Party B.
o Party A agreed to a second mortgage as security for the loan made to Party B.
o BANK approved $772,389 in draws against the construction loan by Party B.
o Party B makes only 2 quarterly interest payments to Party A.
o After 5 quarters and no work performed, Party A's attorney sent notice of default and files 2 suits: (1) forclosure on property, (2) summary judgement against Party B for personal guarantee on promisory note.
o Party B files Chapter 11 bankruptcy and forclosure proceedings are stayed.
o Party B does not file a plan of reorganization, stay is lifted.
o BANK forclosed on property.
o Property was sold at Sheriff's Sale to BANK.
o Party B filed for personal bankruptcy.
o Party B did no construction and draws are unaccounted for.
o As of now, Party A lost land and has no recourse.
o Party B has history of questionable dealings.
Is there any recourse for Party A????


[This message has been edited by rreese (edited October 24, 2000).]

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by rreese:
o Party A entered into an agreement of sale with Party B (developer) to sell 108 acres for $12,000 per acre. Party A agreed to finance $1,043,661 of the purchase price.
o Party B executed and delivered a purchase money note in the face amount of $1,0430661, plus interest at 9% per annum on the unpaid principle.
o BANK made a $1.2M construction loan to Party B.
o Party A agreed to a second mortgage as security for the loan made to Party B.
o BANK approved $772,389 in draws against the construction loan by Party B.
o Party B makes only 2 quarterly interest payments to Party A.
o After 5 quarters, Party A's attorney sent notice of default and files 2 suits: (1) forclosure on property, (2) summary judgement against Party B for personal guarantee on promisory note.
o Party B files Chapter 11 bankruptcy and forclosure proceedings are stayed.
o Party B does not file a plan of reorganization, stay is lifted.
o BANK forclosed on property.
o Property was sold at Sheriff's Sale to BANK.
o Party B filed for personal bankruptcy.
o Party B did no construction and draws are unaccounted for.
o As of now, Party A lost land and has no recourse.
o Party B has history of questionable dealings.
Any suggestions??????
<HR></BLOCKQUOTE>

Which party are you? If A, you deserve an F for letting B get away with so much. Why did you not complete due diligence and subordinate your interest in the property?
Now you have no property and a very big tax writeoff.

[This message has been edited by HomeGuru (edited October 23, 2000).]