Real Estate Developers – Summary Judgment in Litigation over Recourse Provision in Mezzanine Loan Guaranty

Defense of the guarantors of a multimillion dollar mezzanine loan secured for the development of several Florida condominium projects in an action filed by the lender in New York federal court. Seeking the full outstanding balance of the loan with interest, an amount totaling nearly $190 million, the lender claimed that certain transfers out of an escrow account holding condominium purchasers’ deposits triggered a full recourse provision in the guaranty. Herrick successfully argued that the full recourse provision of the guaranty was never triggered, obtaining a ruling granting our motion for summary judgment and dismissing all claims against our clients.