If you deal with receiverships, this case will be of interest to you. A lender, a borrower and a court-appointed receiver have been battling one another in an Indiana federal court in connection with a failed construction project. Problems arose when a partially-constructed apartment complex deteriorated so much during a foreclosure suit that a judge condemned the property and ordered it to be demolished, resulting in damages alleged by the borrower of $4,167,881 (representing the purported value of the property pre-suit minus the value of the foundations of the buildings after demolition). In Judge Philip P. Simon’s words, “assessing who is at fault for this mess is at the center of the action currently before the Court.” In rulings filed September 18, 2006 and October 16, 2006, the Northern District’s Judge Simon brought some order to the chaos in case no. 2:02cv368, Four Winds v. American Express Tax and Consulting Services, et al. The cite to the September Opinion, which relates to the borrower’s claims against the receiver, is 2006 U.S. Dist. LEXIS 71349. The October Opinion, which addresses the receiver’s cause of action against the lender, can be found at 2006 U.S. Dist. LEXIS 75581.
Lender spanked. The litigation began when the lender decided to foreclose. The borrower filed a counterclaim asserting wrongful foreclosure because there had been no default. The borrower convinced the court that no default occurred, so the court dismissed the foreclosure aspect of the case. The lender then settled with the borrower for a “hefty amount” on the counterclaims.
