Order raison
7\o ‘United st District Court, Northern District Illinois ( >)

Name of Assigned Jud ames : Sitting Judge if Oth
ior Magistrate Judge James B. Moran than Assigned Judge
CASE NUMBER | 02 C 3859 DATE 2/12/2003
CASE Heller Financial, Inc. Vs. 2500 Peachtree Assoc. et al.
TITLE

UIn the following box (a) indicate the party filing the motion, c.g,, plaintith, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.]

MOTION; H
: Memorandum Opinion and Order
DOCKET ENTRY:
(1) a Filed notion of [ use listing in “Motion” box above.]
2)  O — Rrief{n support of motion due
(3) ial Answer brief to motion duc_____-- Reply to answer bricfduc_
(4) oO Ruling/Hearing onset for at
(5) Oo statu hearing[held/continued to] [set for/re-set for]on__——ssetfor_— att
(6) i) Prettial conference[held/continued to] [set for/re-set for]on set for_at__ ="
(7) Qa Trial{fet for/re-set forJon_ at
(8) u (Bench/Tury trial] [Ilearing] held/continued toa
(9) im This dase is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

Qo FRCP4(m) O Local Rule 41.1 [J FRCP41(a)(1) OO FRCP41(a)(2).

(0) =o [Other|docket entry) Enter Memorandum Opinion and Order. We enter judgment for plaintiff and
against the present defendants in the amount of $2,405,619.00.

di) @f [For further detail see order attached to the original minute order. |

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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
| EASTERN DIVISION
|

HELLER FINANCIAL, INC.,, a Delaware
corporation,

)
)
)
| Plaintiff, )
i )
' vs. ) No. 02 C 3859

| )
2500 PEACHTREE ASSOCIATES, LLC, et al., )

)

)

| Defendants,

: MEMORANDUM OPINION AND ORDER

From ! me to time this court is called upon to make a determination that has virtually
no likelihood of having any practical significance but which is necessary to bring closure to the
dispute. This is such an occasion.

Defendants Akhayan, Gunter, Kelley and Urban Holdings, LLC (“present defendants”)
executed a goaranty in favor of plaintiff related to a loan for the development of a
condominium project. The project apparently encountered difficulties — it was never
completed, Plainttt sought to recover un the guaranty and it obtained a judgment of $3.5
million against each of the present defendants. {t appears that plaintiff's likelihood of
collection of those judgments ranges from slim to none,

Still, plaintitr also had a right under the guaranty to recover the cost of completion of
the project even though it chose not to complete the project. That cost was estimated to be
$2,405,619. | Plaintiff now seeks a judgment on that amount from the present defendants

because its lasses on the Joan far exceeded the $3.5 million drawn on a letter of credit from a

senior lender, the basis of the prior judgments,



No. 02 C 3859 | r . ) Tage 2

One defendant, Kelley, characterizes that recovery as an unenforceable penalty, but it
is not, When the project went into bankruptcy plaintiff could have completed the project at
its expense, hoping that it could more than recover the added investment by its recovery as a
creditor from the sale of the condominium project as a completed asset of the bankrupt estate,
But it did nak need to take that risk. 1t could, instead, refuse to advance further funds and
contine its rdcovery to its share as a creditor in the proceeds from the sale of the incomplete
project, an amount which obviously would be less than the value of a completed project, That
is the course it chose to pursue. The quaranty permitted plaintiff to elect to complete the

i
project, with| that amount recoverable from the guarantors, with the hope but without the

certainty that the funds advanced would be more than covered by an increase in its share in
bankruptcy, or to forego that option and settle for a lesser recovery in bankruptcy. That was
an election plaintiff had a right to make in its effort to minimize its losses. We enter judgment

for plaintiff gad against the present defendants in the amount of $2,405,619.

JAMES B. MORAN
Fag. Sehibr Judge, U. S. District Court
IM _, 2003.