Legal Question in Banking Law in New Jersey

Bank held a residential construction loan on an 18 lot subdivision. all documents were signed by both co-managing LLC members and state all changes or modifications must be signed by all parties who signed original docs. The other LLC co-managing member requested a draw for "soft costs" that were not part of original loan or on loan budget payout schedule with out any modifications to the loan docs or my signiture and managed to pocket $450,000 without my knowledge. This member since has filed both business and personal bankruptcy and defaulted on his obligations to the LLC. The bank is foreclosing on the property as a result based on the loan now having this additional amount on it. I am being told by the bank it is not their problem even though all LLC and bank docs state both co-managing members must sign. I have been trying for over a year to resolve this and get no where. I have been unable to locate an attorney who understands problem enough to take it on. State Police and local police say not their jurisdiction and County Prosecuter's office say it is a "white collar" issue and falls under civil. I need direction to take this. Also the draw request is on a plain sheet of paper with no back up documents and signed by a previous bank president.The bank can not find any other info or back-up. I have researched bank law and regs and can find nothing that matches.


Asked on 8/08/09, 5:04 pm

1 Answer from Attorneys
Robert Davies The Davies Law Firm, P.A.

You clearly have a very, very serious problem with the thieving partner. You have also correctly identified the weakness in the Bank's position. However, this will require some pretty forceful work from an attorney, and you will very likely be filing a lawsuit against the Bank and its officers. No other records at the Bank at all? Very interesting.

As for the thief, you have options. Sounds like the Prosecutor is trying to duck this. Now, Sussex has a pretty small legal community, and that may have some impact too.

Please give me a call. The telephone discussion will be free of charge, and I will let you know what I believe I can do to assist you further.

I am in Hackensack, Bergen County, New Jersey. My contact information can be obtained from the links below, just click on the Attorney Profile link. Let my secretary know you found me through LawGuru.

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Answered on 8/13/09, 5:20 pm


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