DALLAS – CU Liquidity Services, the former Texans CU CUSO that financed a troubled shopping mall in suburban Chicago, filed suit in federal court last Friday claiming North Carolina’s Coastal FCU owes it more than $1 million from two loan participation deals.
CU Liquidity, formerly known as Texans Commercial Capital, LLC, claims that Coastal, which participated in funding for the Lincoln Mall in Matteson, Ill., and a luxury condominium project in Telluride, Colo., and was overpaid by more than $1 million.
In the case of the Lincoln Mall loan, CU Liquidity claims Coastal paid $5 million for "all in" participation, which originally amount to 24.75% of the loan, but the share was reduced to 12.68% as the loan was increased to $40 million. "Despite such decrease, CULS inadvertently continued to pay Coastal from the principal reductions at the initial participation interest of 24.75%," according to the suit.
The Lincoln Mall loan has been a disaster for Texans, which sold off a majority of the member business loan CUSO in 2007 as its losses were rising. The CUSO, then known as Texans Commercial, issued a $62 million loan in 2004 to finance the renovation of the ailing Lincoln Mall project. The company, which changes its name to CU Liquidity Services after Texans shed its majority stake, filed to foreclose on a $39 million balance on the loan in February.
The owners of the mall filed a countersuit claiming lender's executives jeopardized the project by waging a campaign to force the mall owners into default.
A receiver has been appointed to manage the mall in the meantime.
Representatives of Coastal FCU said yesterday they had not seen the suit so could not comment.
Lawyers for CU Liquidity Services did not return phone calls seeking comment.
