Opinion ID: 762144
Heading Depth: 3
Heading Rank: 2

Heading: 1986-87: Group obtains financing from Trumbull, Cortland and GEICO

Text: 13 After Bank One canceled its financing agreement, in August 1986 the Group approached Trumbull seeking another lender to finance the Campgrounds interests. Plaintiffs allege that Trumbull agreed to finance an installment loan program even though it knew that the LiVorio-Sabatini Group could not guarantee the repayment of these loans. Plaintiffs claim that the deal structure effectively operated to provide Trumbull with kickbacks because Trumbull knew that the Group was unable to repurchase or guarantee the loans. According to Plaintiffs, Trumbull and the LiVorio-Sabatini Group structured the deal to enhance Trumbull's ability to enforce and collect on the installment loans once the Campgrounds were bankrupt. 14 In 1987, the Campgrounds began experiencing serious financial problems and had difficulty paying off its debts. As a result, the LiVorio-Sabatini Group approached Cortland for additional financing. Cortland agreed to finance an installment loan program under an arrangement similar to Trumbull's. Again, Plaintiffs allege that the deal structure effectively operated to provide Cortland with kickbacks because Cortland knew that the Group would be unable to repay the loans. 15 The LiVorio-Sabatini Group continued to drain money from the Campgrounds after obtaining financing from Trumbull and Cortland. In addition, GEICO purchased Bank One's portfolio of Campground installment loans in 1987, and also began making on-site installment loans at the Campgrounds in 1987 and 1988. 16