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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118200
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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A few years ago, I made a loan to an LLC. This was a

Customer Question

A few years ago, I made a loan to an LLC. This was a mezzanine loan secured by an ownership stake. The loan was never repaid and the borrower filed for bankruptcy. It came out of bankruptcy and the borrower is trying to tell me that my claim was dismissed by bankruptcy court. I know that is not true and I would like to sue for my money and fraud.
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
What is your specific question for us on this matter?
Have you gone to the bankruptcy court yet to get a copy of the bankruptcy order?
Did you ever get creditor notice in the bankruptcy to give you a chance to object to the debt being extinguished in the bankruptcy?
Do you still have an ownership interest in the LLC securing the loan?
Customer: replied 2 years ago.
I have the notices I received from his atty. I received no notice regarding chapter 7 only his statement. I believe I would still have the right to ownership inyerest but I have never acted on it.
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your reply.
What were the notices from his attorney, regarding you being named as a creditor in his bankruptcy?
You need to get to the bankruptcy court because if you do not have the bankruptcy court order proving your debt was not extinguished and you sue him for the debt you can be held in contempt of the bankruptcy order which carries significant penalties including paying his attorney's fees.
If you have the ownership interest in the LLC, your only recourse may be to exercise that ownership interest since that was your security interest. If he refuses to turn over the LLC, you could sue to foreclose on that security interest and take the LLC.
Without knowing for sure what the bankruptcy order is though, you cannot sue. If your debt is not included in the BK order, then you could sue for the debt in court to obtain a judgment against him.