Credit Union Liquidity Services LLC, previously known as Texans Commercial Capital, has been awarded more than $40 million in a suit involving a defaulted Illinois property loan, according to Texans Credit Union.
The $1.5 billion CU said the $40 million will be repaid by four Dallas real estate investors who had guaranteed CULS' loan for the redevelopment of the Lincoln Mall project in Cook County, Ill. When the loan went into default, CULS demanded that the guarantors honor their obligations. Litigation soon followed with the guarantors alleging that CULS, Texans and a number of officers and directors associated with both CULS and Texans were guilty, among other things, of breach of contract and orchestrating "a loan Ponzi scheme," Texans said.
The court found there was no validity to the Ponzi scheme or the other allegations made by the guarantors and made it clear in its ruling that CULS had met all of its obligations under the loan agreement, according to Texans.
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"The guarantors' allegations were nothing more than a desperate attempt to avoid honoring their obligations to CULS," said Ted Daniel of Fulbright & Jaworski LLPP, counsel to CULS and Texans CU. "CULS honored its obligations by fully funding the loan at issue. It was the guarantors who refused to honor their obligations. The court has confirmed that in Texas, one must honor their contracts."
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