Hillsborough court ruling a boon to debtors

Court agrees to reform loan to abide by bank’s promises.
(PR NewsChannel) / May 4, 2012 / TAMPA, Fla. 

“A remarkable decision that will help others,” is how Tampa attorney Richard McIntyre describes the ruling by a Hillsborough Circuit Court judge to reform a bank loan based on the oral promises of its agent.

According to court records, Whitney Bank had given two loans to a group of borrowers who were developing a golf course project.  The initial loan of $2.5 million was followed by a second loan, a letter of credit, for $250,000.

The defendants say the bank had agreed to consolidate the two loans into one which would become due at the same time.  According to the borrowers’ testimony, it was “crystal clear” that the loans would be rolled into one and that the bank’s loan officer “foresaw no problem consolidating the loans.”  Instead, records show the bank did not roll the smaller second loan into the first.   When the smaller loan became due earlier, the developers defaulted, causing the bank to demand payment on both loans.

Hillsborough Circuit Court Judge William Levens ruled the bank’s commercial loan officer and former Vice President’s “repeated oral and material representations” regarding the bank’s “willingness and ability to consolidate the subject loans” caused the Defendants to reasonably rely upon them to their detriment.

The solution?  Judge Levens used the court’s equitable authority to “re-form” the written contract to reflect the prior agreement of the parties.   This equitable reformation will now give the borrowers nearly three years to pay off both loans.

Richard McIntyre, who heads up an 18-lawyer firm focusing on bankruptcy, foreclosure and unfair debt collectors, said:  “This ruling has the potential to empower borrowers who rely on bank promises when new ventures are being formed.”

“An important point here is that the banks are now going to have to pay attention to what their officers promise, and in certain situations may have to live up to those promises,” said Consumer Lawyer Eric Seidel, also with the McIntyre firm.

“I’ve heard for years from consumers who said their lender promised one thing, but their signed agreements promised otherwise,” Seidel said.

“My best advice for debtors in this type of situation is to seek out representation from a lawyer you trust,” adds McIntyre.

The court’s full ruling is available here:
McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L.
Contact:   Rich McIntyre or Eric Seidel
Phone:  813.899.6059


Direct link:  https://prnewschannel.com/2012/05/04/hillsborough-court-ruling-a-boon-to-debtors/

SOURCE:  McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L.

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