A bank has filed suit against the California residents and company that it claims used rent money for something other than repaying the more than $7 million loan they borrowed from the bank.
HSBC Bank, National Association as trustee for Morgan Stanley Capital Inc. claims it lent defendants Keebler Krossing, Jeffrey Fields and Allison Fields $7.2 million on March 16, 2006. In exchange, the defendants offered a lien against the real estate property at 1099 Beltline Road in Collinsville, according
to the complaint filed April 4 in Madison County Circuit Court.
In August 2011, the defendants had stopped making the required monthly payments due under the note, the suit states. The bank sent the defendants a letter to notify them of their defaults, but they still have failed to repay the money, the complaint says.
The bank filed a lawsuit on March 19, 2012, in Madison County Circuit Court in an attempt to collect on the money it claims it is owed. The court entered a judgment that authorized HSBC to take possession, custody and control of the property, including all rents, according to the complaint.
However, the defendants have failed to comply with the terms of the judgment and a security instrument. For instance, they failed to hold rents sufficient to pay current sums due to HSBC and used
those rent payments for other purposes, the suit states. In addition, the defendants failed to make their real estate tax payments with the rent money they received, the complaint says.
“Borrower failed to use rents collected to pay the expenses of the property, including payments due to lender under the note, as required by the loan documents, and instead kept net operating income from the property in at least the amount of $198,031.61 for 2011 and $254,588.73 for 2012, the amounts set forth in the income statements provided by the borrower,” the suit states.
“Accordingly, borrower has failed to comply with or perform its obligations under the loan documents, has breached the note and
security instrument and is liable for the resulting losses to tender.”
The Fields guaranteed repayment of the note, but have also failed to make payments, the complaint says.
The bank is seeking compensatory damages of more than $200,000, plus interest, attorneys’ fees and other relief the court deems just.
Llynn K. White of Polsinelli and Shughart in St. Louis will be representing it.
Madison County Circuit Court case number: 13-L-546.