DALLAS – A federal bankruptcy court Monday awarded CU Liquidity Services LLC, a wholly owned CUSO of Texans CU, a $40 million verdict over a dispute concerning a multi-million member business loan the CUSO made to a troubled shopping mall in suburban Chicago.
The verdict is to be paid by four prominent Dallas real estate investors who had guaranteed CULS’ loan for the redevelopment of the “Lincoln Mall” project in Cook County, Illinois.
When the loan went into default, the CUSO demanded that the guarantors honor their obligations. Litigation soon followed with the guarantors alleging that the CUSO, Texans and a number of officers and directors associated with both CULS and Texans were guilty, among other things, of breach of contract and orchestrating “a loan Ponzi scheme.”
The Court found there was no validity to the “Ponzi scheme” or the other allegations made by the guarantors and made it clear in its ruling that CULS had met all of its obligations under the loan agreement.
The verdict is timely for Texans, as the $1.5 billion credit union reported a $51.2 million loss for 2009.
