Lenders Sue Wachovia & Bank of America|In Dispute Over $7.4 Billion in Loans

     MANHATTAN (CN) – Line Trust Corp. and Deuce Properties demands hundreds of millions of dollars from Wachovia, Bank of America and others in a dispute over $7.4 billion in mortgage and mezzanine loan financing.

     The 48-page complaint in New York County Court is summarized as follows: “This action arises out of the conspiratorial, bad faith and predatory conduct of the defendant original lenders of the $7.4 Billion combined first mortgage and mezzanine loan financing of the 75,844 unit Extended Stay Hotels portfolio, who, in cahoots with the defendant borrowers, hatched a Machiavellian scheme to wipe out entirely the Plaintiffs and holders of other junior mezzanine loans still owned by the original lenders, and, failing that, to deprive such junior mezzanine lenders (a) the former’s lawful right (a) to a one year extension of the various loans and (b) to receive and collect from the defendant borrowers debt service and all other payments due to the mezzanine lenders under their outstanding junior mezzanine loans. Defendant lenders and borrowers collusively manufactured and arranged, and defendant lenders declared, a trumped up default, based on the defendant borrowers’ complicit non-payment of a trivial amount of operating expenses (for sixty (60) days), even though, under the express terms of the relevant loan documents, such non-payment, even if non-collusively occurring, does not constitute an event of default”.
     Plaintiffs are represented by Stephen Meister with Meister Seelig & Fine.

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