Legal Question in Banking Law in New Jersey

We have construction loan through a bank for our business that has 50% equity participation by the Economic development agency since the partners did not have enough collateral to cover the amount of the loan.

In August the construction was completed and the business starting conducting regular business. In August 2008 one group of partners bought my share and this agreement was enforced by the court. The bank was also notified of the change in partnership but did not accept the sale as the remaining partners did not have collateral to cover even 50% of the loan.

In Oct 2008, the bank extended the construction loan to the business eventhough construction was complete and opened for regular business. The documents for extension were not signed by me and the bank know that the 50% equity participation by the Govt. agency had expired. The loan was extended by the bank by using an order from the court that said the partners who sold their share should work with the remaining partners for smooth operations of the store.

My issue is whether the bank could extend the loan without signature from all partners being fully aware that the 50% commitment from the Govt. AGency had expired and by this time the montly interest due was also paid late. Woudl I still be responsible for the repayment of the loan even though knowing fully well the situation with the business the bank extended the loan. Your advice is really appreciated. Thank you.


Asked on 6/27/10, 7:47 am

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

This is a problem that has been hanging around your neck for a while. I can not answer your question, whether you may be on the hook for this or not, until I look at all the documents and get some more information from you.

Give me a call, make an appointment to come see me, and I will go over this with you, and give you some advice.

Robert Davies, Esq. 201-820-3460

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.

Disclaimer: This answer is based only on the statements you have made. Your question and any response does NOT create an attorney-client relationship between you and this law firm. You can not rely on the statements made by an attorney given over the internet. The exact facts of your situation, including facts which you have not mentioned in your question, may completely change the result for your situation.

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Answered on 6/28/10, 7:52 am


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