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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 1611
Experience:  Run my own successful business/contract law practice.
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Customer Question

This is a business law question - however I believe the act would be considered criminal. A real estate company has 40 rental properties - the loans are being held by a small local bank. One of the partners in this real estate company also has 10 additional rental properties they own separate from this real-estate company. The bank also holds the loans on these 10 properties. The partner tells all parties that he is probably going to be declaring bankruptcy in the coming months. The bank tells the real-estate company "we would like it if you would take over these 10 properties so we don't have to be a debtor in the bankruptcy". (btw - these houses have been neglected and are falling apart). When the real-estate company says this is a separate arrangement and we would rather not, then the bank says: unless you do us this small favor, in the fall when the balloon payment on your loans comes due, we are not going to renew your loans. Does this not qualify as criminal behavior? i.e. extortion? Is there any legal recourse? Also - if the real-estate firm accepts the deal because they can't afford to have their loans called - does that mean any recourse they could have had is lost? (i.e. once they accept the deal, that's it - even if it causes them to go bankrupt within a year because the new houses are unrentable).

Submitted: 3 years ago.
Category: Business Law
Expert:  Law Pro replied 3 years ago.
Welcome to JustAnswer! My goal is to do my very best to understand your situation and to provide a full and complete excellent answer for you.

My name is XXXXX XXXXX I'm going to assist you with your question.

Please bear with me if you believe my answer isn’t coming fast enough because I’m also working with other customers too. I apologize for any seemingly late response.

The problem is - the bank doesn't have to renew the loans and they can give reasonable legitimate reasons why they don't renew the loans if applicable.

Can you get the bank to guarantee they will renew the loans? Or renew them now?
Customer: replied 3 years ago.

Relist: Other. Already told you why


please delete this - I cancelled my earlier question, it was not answered. I tried to "ask a different question" however for some reason it brought me here.

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