Opinion ID: 2716864
Heading Depth: 5
Heading Rank: 1

Heading: The Testimony of John J. Vallone

Text: John Vallone testified that he was the attorney who represented American Steel “in connection with [the] loan to [N.E.] Development;” he stated that he prepared the promissory note from N.E. Development to American Steel, as well as “a loan agreement between the parties,” a guarantee from Mr. LaBonte, and a “mortgage deed to secure the promissory note.” He testified that the purpose of the loan was to purchase property which he termed “the Hope Mill property” located in Scituate. Attorney Vallone further testified that he was a party to “two or three” meetings between Mr. LaBonte on the one hand and Eric Greene (who, according to the “Proof of Claim” filed by American Steel, was “the managing member” of American Steel), and Joseph Garies (who Mr. Vallone stated was Mr. LaBonte’s “advisor”) on the other hand.7 Mr. Vallone testified that it was his understanding that American Steel would provide “$275,000” as a “short term loan for 6 General Laws 1956 § 6-26-2(a) sets the maximum rate of interest at “twenty-one percent (21%) per annum.” See Part II.B, infra, for a more thorough discussion. 7 Joseph Garies testified that he was a “consultant” who “introduce[d] borrowers to lenders for different transactions.” He stated that he was the “sole shareholder” of a company called “Global Consulting [Group],” which contracted with Mr. LaBonte to obtain financing to purchase the Scituate property. -3- 30 days,” to enable Mr. LaBonte to purchase the Scituate property. Mr. Vallone added that the intent of the parties was effectuated by a loan in the amount of $325,000 with an interest rate of 16 percent per annum. According to Mr. Vallone’s testimony, at the maturity date, N.E. Development would pay back $325,000 plus interest, which would include a $50,000 “commercial loan commitment fee,” to be split between American Steel and Mr. Garies. Mr. Vallone testified that the $50,000 would be split—$30,000 being allocated to American Steel and $20,000 being allocated to Mr. Garies.8 It was Mr. Vallone’s testimony that the borrowers on the loan was both N.E. Development “[a]nd Mr. Labonte [sic] individually.” Mr. Vallone further noted that he included a “savings clause” in the promissory note to “alleviate [his] concerns about any potential usury for the note.” The promissory note was admitted as an exhibit.