Fed. Deposit Ins. Corp. v. Hoffman

In 2009, Hoffman executed a $1.5 million tax‐increment finance (TIF) note for a development project by Fyre Lake Ventures, backed by a TIF bond, a mechanism for local governments to finance real estate development. Hoffman was not personally liable on the loan. In 2010, Fyre signed a $9 million loan, with the same lender; Hoffman acted as a co‐guarantor for $900,000. Separately, Hoffman borrowed $157,300 from the lender with his wife; the note was secured by mortgages on three lots in a Milan, Illinois housing development. By October 2011, all of the loans were in default. After negotiations, the FDIC (as receiver for the lender) and the Hoffmans signed a settlement agreement. In exchange for titles to the Milan lots, the Hoffmans were released of their obligations. Less than three months later, the FDIC sued Hoffman and other guarantors of the Fyre loan, $900,000 of which he personally guaranteed. The district judge found the settlement agreement ambiguous and concluded that parole evidence supported the bank’s interpretation of the settlement: Hoffman was only released from his obligation on the $157,300 loan. The Seventh Circuit affirmed, interpreting the agreement's general language in light of the specific language referring to the smaller loan. View "Fed. Deposit Ins. Corp. v. Hoffman" on Justia Law