A lawsuit has been filed by Credit Union Liquidity Services LLC, a Texans Credit Union CUSO, against Coastal Federal Credit Union for breach of contract involving loan participation agreements tied to commercial properties in Pennsylvania and Illinois.Credit Union Liquidity Services was previously known as Texans Commercial Capital LLC. According to the May 1 complaint, the CUSO alleged that the $2 billion Coastal FCU and CULS signed two participation agreements on Aug. 30, 2006, for loans used to finance the Mockingbird Commons in Pennsylvania and the Lincoln Mall in Chicago. A third participation agreement was signed on June 6, 2007, for the Mountain Village in Pennsylvania.The agreement was amended in 2007 by CULS and the mall, according to the complaint. The CUSO allegedly said it made the changes with the understanding that it did not need Coastal's consent to make material amendments to the terms of the agreement. Coastal supposedly paid $5 million for an all-in participation in the Lincoln Mall. The participation interest was initially set at 24.75%; however, the interest was to be reduced to 12.68% as the loan commitment increased. According to the complaint, CULS continued to pay Coastal the original 24.75%. Overpayments were also made on the Lincoln Mall project by more than $486,909 and more than $558,163 on the Mockingbird Commons project, CULS has alleged. Coastal has failed to return the overpaid funds, according to the complaint."As policy, Texans Credit Union does not discuss pending litigation," said Jo Trizila, a spokeswoman for the credit union. Coastal spokesman Joe Mecca said the credit union does not comment on pending litigation.This is not the first time CULS has been involved in a suit regarding Lincoln Mall. In February, the CUSO was sued by Realty America Group LLC for breach of contract. Realty America and CULS entered into a loan agreement on Dec. 17, 2004. In early 2004, Realty America sought additional construction financing for the Illinois property that would include a replacement or restructure of the prior loan agreement. Bank of America approved a $57 million restructure with a scheduled closing date of May 15, 2007, according to the claim.CULS and Realty America had discussed the possibility of providing the restructure, but the real estate firm raised concerns about the CUSO's ability to fund the new loan. CULS said it had the wherewithal to fund the loan and on May 4, 2007, issued a letter of intent to loan $44.5 million and a $430,000 loan origination fee. Realty America declined Bank of America's $57 million loan and signed on with CULS.According to Realty America, CULS failed to fund the loan on May 18, 2007, the scheduled closing date. The commercial lending CUSO said a revised loan in the amount of $39.5 million would have to be approved by the loan committee on May 24, 2007, but the closing and funding would occur five days after that. Realty America said by June 1 CULS had not funded the loan. However, both parties later signed a second amended, restated agreement increasing the loan amount by $2.5 million, which CULS funded, according to the claim. CULS also intended to loan up to $42 million in place of the amended $39.5 million amount. The loan was issued on July 2, 2007, according to Realty America. Realty America is seeking $20 million and punitive damages.In 2007, $1.6 billion Texans CU sold its majority interest in the former Texans Commercial Capital to a real estate professional but retained a minority interest in the company and 100% ownership of the CUSO's pre-existing loans.–[email protected]