Insurance Gap Triggered Loan Default, Court Says

Law360 (January 21, 2011, 4:59 PM EST) -- A Texas appeals court has found that two commercial property owners breached loan agreements with mortgage-backed security servicer Orix Capital Markets LLC by declining to purchase terrorism insurance.

The Court of Appeals of Texas, Fifth District, in Dallas issued an opinion Wednesday largely affirming a lower court’s ruling in favor of Orix, in which the property owners ECF North Ridge Associates LP and TCI 9033 Wilshire Boulevard Inc. were ordered to pay default interest and attorneys' fees.

“Although not identical, the language of these contracts is...
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