ILNews

7th Circuit upholds ruling in favor of borrowers

Back to TopCommentsE-mailPrintBookmark and Share

A dispute between a lender and subsidiaries created by a restaurant owner to refinance its debt made its way before the 7th Circuit Court of Appeals for the second time. This time, the judges ruled in favor of the borrowers.

Quality Dining Inc. created subsidiaries BKCAP LLC, GRAYCAP LLC, and SWCAP LLC and made a deal with Captec Financial and GE Capital for 34 separate loans, with each loan secured by a restaurant. Captec assigned 13 of its loans to Captec Franchise Trust 2000-1. The borrowers and lender disagreed about the prepayment requirements for 12 of the loans, landing the parties in court and before the 7th Circuit in 2009.

There is ambiguity in the prepayment provision of the loan agreements, so the judges sent the case back to the District Court for a full trial on the merits. The 7th Circuit found both parties’ arguments as to how to interpret the loan agreement impossible without additional evidence. The District Court then ruled in favor of the borrowers, awarded prejudgment interest, and denied attorney fees for lender Captec Franchise Trust 2000-1.

The lender appealed, claiming the borrowers’ interpretation of the prepayment provision is unreasonable based on the language of the decision issued by the 7th Circuit in the first appeal. The judges did say the borrowers’ interpretation was unreasonable, but the lender’s argument is way off base, wrote Judge John Tinder. The judges didn’t call the lender’s interpretation unreasonable, but they should have, he wrote.

The evidence offered at trial supports the borrowers’ interpretation, and the District Court didn’t err in considering the testimony of the borrowers’ lead negotiator, who testified about an original lenders’ lead negotiator’s construction of the prepayment provision.

There is also no question that the borrowers are entitled to prejudgment interest after September 2009, Tinder wrote, and that the lender is not entitled to attorney fees.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Affordable Loan Offer (ericloanfinance@hotmail.com) NEED A LOAN?Sometime i really wanna help those in a financial problems.i was wondering why some people talks about inability to get a loan from a bank/company. have you guys ever try Eric Benson lending service.it cost dollars to loan from their company. my aunty from USA,just got a home loan from Eric Benson Lending banking card service.and they gave her a loan of 8,000,000 USD. they give out loan from 100,000 USD - 100,000,000 USD. try it yourself and testimony. have a great day as you try.Kiss & Hug. Contact E-mail: ericloanfinance@hotmail.com

  2. From the article's fourth paragraph: "Her work underscores the blurry lines in Russia between the government and businesses . . ." Obviously, the author of this piece doesn't pay much attention to the "blurry lines" between government and businesses that exist in the United States. And I'm not talking only about Trump's alleged conflicts of interest. When lobbyists for major industries (pharmaceutical, petroleum, insurance, etc) have greater access to this country's elected representatives than do everyday individuals (i.e., voters), then I would say that the lines between government and business in the United States are just as blurry, if not more so, than in Russia.

  3. For some strange reason this story, like many on this ezine that question the powerful, seems to have been released in two formats. Prior format here: http://www.theindianalawyer.com/nominees-selected-for-us-attorney-in-indiana/PARAMS/article/44263 That observed, I must note that it is quite refreshing that denizens of the great unwashed (like me) can be allowed to openly question powerful elitists at ICE MILLER who are on the public dole like Selby. Kudos to those at this ezine who understand that they cannot be mere lapdogs to the powerful and corrupt, lest freedom bleed out. If you wonder why the Senator resisted Selby, consider reading the comments here for a theory: http://www.theindianalawyer.com/nominees-selected-for-us-attorney-in-indiana/PARAMS/article/44263

  4. Why is it a crisis that people want to protect their rights themselves? The courts have a huge bias against people appearing on their own behalf and these judges and lawyers will face their maker one day and answer for their actions.

  5. State's rights, civil rights and human rights are all in jeopardy with Trump in the WH and Sessions running Justice.

ADVERTISEMENT