Case Study: Wells Fargo V. Cherryland Mall

Law360, New York (January 27, 2012, 3:19 PM EST) -- The Michigan Court of Appeals recently held that a borrower’s violation of a nonrecourse liability carve-out provision, which prohibited the borrower from becoming insolvent, resulted in the loan becoming fully recourse against the borrower. In Wells Fargo Bank NA v. Cherryland Mall Limited Partnership, et al., (Mich. App. Dec. 27, 2011), the court affirmed a lower court’s imposition of liability upon both the guarantor and the borrower for more than $2 million of deficiency liability after foreclosure by the lender.

Background

Defendant Cherryland Mall Limited Partnership,...
To view the full article, register now.