FBBC helped a family-owned produce company exonerate a debt in excess of $18 million and helped the company obtain a highly lucrative real property reconveyance by the lender valued at over $22 million in a lender liability dispute.

The produce company was a successful family-owned and operated commercial produce grower and packer, in business for more than 50 years. The produce company and a large nationally recognized bank had been engaged in relationship lending for a number of years where the Bank would provide the company the necessary funds to finance each growing season. During the 2009 growing season, the company was forced to close its doors and “default” on its loans to the Bank.

In May 2009, the Bank filed a complaint seeking more than $18 million from the company and its personal guarantor (a principal in the company). The Bank sought to foreclose on all real property owned by the company in repayment of the debt, while claiming that there was a deficiency to be paid personally by the guarantor. The real property had a fair market value, according to the Bank of slightly more than $13,000,000, leaving the guarantor liable for approximately $5,000,000.

The company hired Foley, Bezek, Behle & Curtis, LLP, who promptly went to work opposing the Bank’s Complaint, and mounted a counter-attack. The company filed a cross-complaint, alleging that the Bank caused it millions of dollars in damages on theories of fraud, breach of oral contract, intentional interference with prospective economic advantage, and other lender liability claims.

The Bank tried to end the case early by filing Motions for Summary Judgment in mid-2010. In a 30 page opinion, the Superior Court concluded that the Bank was not entitled to Summary Judgment, but instead would be required to stand trial and defend against the cross-complaint. After careful consideration of the Court’s comments and conclusions in its written ruling, the Bank determined to settle the case by canceling all debt and guarantees, and returning all real estate pledged by the company for a payment slightly in excess of $4.0 million dollars. The effect of the settlement was to release over $18,000,000 in debt and to return real property valued in excess of $22,000,000 for a payment of slightly more than $4.0 million dollars.