Confidential
Settlement – $1,000,000Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Defendant
Howard S Fredman
(Fredman Lieberman & Pearl LLP)
Facts
On August 29, 1988, the defendants loaned the plaintiffs real estate developers $3,500,000 for the construction, rehabilitation and lease finance of a retail shopping center located in Rancho Palos Verdes. The loan was made through a promissory note secured by a deed of trust which encumbered the ground lease underlying the improvements of the project. The plaintiffs signed a completion agreement and guaranty. The deed of trust matured on August 28, 1988. On February 28, 1992, the defendants demanded payment of the principal and interest. No payment was made. The plaintiffs defaulted on the ground lease and a judgment was obtained against plaintiffs for restitution of the premises by the lessor, which extinguished the lien of the deed of trust. At that time, the promissory note became unsecured. In 1993, the plaintiffs sued the defendant lender under breach of contract, lender liability, and fraud theories of liability alleging that the lender falsely represented that it would fund 100% of the cost of the shopping center. The defendant lender filed a cross-complaint for breach of note, breach of guaranty and money paid.
Settlement Discussions
The defendant claimed it was owed approximately $5,000,000 for this action and money on an unrelated judgment entered against the plaintiff. The settlement required the plaintiff to pay $1,000,000 in exchange for a dismissal and the elimination of the prior judgments. Per the defendant, the settlement was reached after plaintiff's assets were examined.
Damages
The defendant claimed that approximately $5,000,000 was owed to it in this action at the time of judgment. The plaintiff claimed $2,000,000 in damages.
Other Information
The case was settled 2 years and 7 months after it was filed.
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