DALLAS – Credit Union Liquidity Services, a wholly owned CUSO of Texans CU, has filed suit in federal court over a failed commercial/residential development in nearby Rockwall that defaulted on a $30 million member business loan.
The dispute is the latest involving the troubled MBL CUSO, which won a $40 million verdict last year over loans to a failed Chicago shopping mall project, helping to force the CUSO into Chapter 11 bankruptcy.
The CUSO’s MBLs have been the main causes of major losses at the one-time $2 billion credit union, which reported a $44.6 million loss for 2008, a $51.6 million loss last year, followed by a $9.6 million loss for the first six months of this year.
In the latest battle, CU Liquidity is asking the federal court to appoint a receiver to oversee the finances of The Harbor at Rockwall, which defaulted on a $30 million mortgage issued by the CUSO before it filed for bankruptcy on Oct. 4. In its suit, Texans claims the borrower, Mariah Bay Leasing Corp., continues to collect rent on the property that should go to the credit union instead. The owner of Mariah Bay has filed counterclaims seeking damages from the credit union in state court.
The MBL disputes are not the only ones marring Texans’ CUSOs, with the credit union’s Texas Insurance Group hit separately with a $20 million judgment by its former owner and CEO.
