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March 2015

Gordon & Rees Litigation Team Obtains Favorable Settlement at Trial of Guaranty Action

The Gordon & Rees Phoenix based litigation team of John Condrey and Molly Machold, with assistance from Brian Mooney and Sandi Colabianchi in San Francisco, secured a favorable settlement for their client, plaintiff LNR Partners, LLC, on the second day of trial in the Maricopa County Superior Court.

LNR Partners is the world’s largest commercial mortgage special servicer. Gordon & Rees represented LNR Partners in the foreclosure of a shopping center in the Phoenix area that secured the loan for which the guarantors had executed a carve-out guaranty agreeing to liability only if certain identified breaches occurred. Gordon & Rees pursued the guarantors for the full balance of the loan, over $11 million, along with alternative damages for rents that were misapplied. Gordon & Rees had early success in the litigation in obtaining a favorable decision in the fair value hearing (four hearings over the course of a year) to determine the value of the property at the time of the foreclosure. After nearly six years of litigation, the case proceeded to trial in Arizona. The first day of trial concluded with Gordon & Rees’ trial team of Condrey and Machold presenting the only compelling witness who was actually involved in drafting the loan documents, and an admission by the debtor defendants that discredited their interpretation of the loan and amounted to tacit admissions of their breach of some of the key contract provisions. By the end of the first day of trial it became clear that the Court would likely agree with LNR’s interpretation of the loan documents, which gave the guarantors sufficient motivation to bring a very favorable offer to settle the matter.

Gordon & Rees’ San Francisco team of Mooney and Colabianchi continues to represent LNR in numerous foreclosures, receiver appointments and guaranty actions in several states, working successfully with attorneys throughout Gordon & Rees’ national platform to provide effective multi-state representation.

Sandi M. Colabianchi
John L. Condrey
Brian J. Mooney


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