Amberhill Wins Real Estate Financing Dispute
When friends encouraged our client to invest in an environmentally progressive mixed-use residential and retail development in the city of Fairview, east of Portland, no one anticipated any problems. The $2 million that Amberhill Properties provided for Fairview Development was to be a short-term investment. Over the next few years, delays in the development led to extensions and amendments to the parties' overlapping agreements, and the overall transaction became tangled almost beyond comprehension.
The parties continued their friendly relationship, however, ultimately restructuring Amberhill's investment into what was essentially an interest-bearing secured loan featuring repurchase options on some properties and a mandatory buyback on another. Further delays in the overall development led to more extensions of the Amberhill loan, but eventually Amberhill had to insist on repayment, which was to occur through the mandatory property buyback.
A date was agreed for the closing, but a scrivener's error at the title company was discovered at the eleventh hour, an error which needed correction before the transaction could close. Despite orally agreeing to wait for Amberhill to correct the title issue, Fairview leapt at the opportunity to avoid its obligations, and declared the missed closing a material breach. The likely consequence of these actions, had they withstood challenge, would be that Amberhill would have lost substantially all of its investment.
Amberhill turned to Tonkon Torp to fight for its investment in federal court. Although the legal technicalities of the case were problematic for our client, Tonkon Torp attorneys prevailed in a federal court trial and again in the Ninth Circuit appeal, winning a rare specific performance order that obligated Fairview to perform its part of the deal. The court also awarded Amberhill its attorneys fees.
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