Kennedy Funding Lawsuit is a prominent player in the sector of commercial real estate lending business. The firm has been surrounded in a number of lawsuits which has raised significant legal questions in their business tactics and also shows the dark side of the firm. There are a lot of allegations that the company has faced in the recent few years. If you don’t know much about the funding company or searching for information about the firm. Then this article is for you because here we will provide a comprehensive overview of the key issues and allegations that the Kennedy Funding has faced.
About Kennedy Funding
Kennedy Funding is a famous real estate lending firm which has earned a lot of reputation. Along with the portfolio of high profile clients such as Hubspot and Wordstream, KFI and many more. The practice followed by the company has attracted legal scrutiny and also leads to a range of lawsuits. The services provided by them include constructions, land development, bankruptcies and much more.
Kennedy Funding is a universal private lender experienced in bridge loans fot commercial properties and land acquisition, workout, development, bankruptcies, and foreclosures. Kennedy has passed on more than $4 Billion of amount is loans till date. Its unique financing expertise offer funding of up to 75% Loan-to-value, from $1 Million to more than $50 Million, in as little as five days. The company has cleared loans in the United States, the Caribbean, Europe, Central and South America.
The Kennedy Funding Lawsuit
The company has faced a range of lawsuits because of their unethical services, which has also gained significant attention between KFI and Virgil Shelton. Shelton was awarded $1,675,000 based on the claims of breach in the contract and fraud against KFI. Then, KFI disagreed with the judgment and appealed again.
- The lawsuit is the legal case against the Kennedy Funding. They are real estate and commercial bridge loan lender.
- The company was sued by one of their investors, due to which the company has to face a significant loss of money.
- The important detail of the lawsuit was that the company violated the Securities Exchange Act. It also included that they failed to disclose the facts about the properties and the associated risk.
- The investors demanded money for the losses handled due to the fraudulent activities of the company.
Major Clients of Kennedy Funding
The main player of the Kennedy Funding lawsuit was Virgil Shelton and the defendant, Kennedy Funding Inc. Virgil Shelton is the owner of the Rest in Peace Cemetery in Hensley, Arkansas. KFI is also one the important players, it is commercial real estate lending situated in New Jersey.
The Case Background
Virgil Shelton established the Rest in Peace Cemetery in Hensley, Arkansas in 1967 and it was operated till 1992. When the owner decided to retire. Then the owner sold the cemetery to Willie Acklin. They were a local undertaker in the deal a promissory note was involved and mortgage. In the 1990s, Willie Acklin faced financial issues and decided to restructure his financing by taking a bridge loan from KFI.
Estoppel Certificate
The Estoppel certificate is a very important piece of evidence used for Kennedy Funding. The certificate is a document in the legal terms used to prevent from making claims that contradicts what was previously agreed. In the whole case the certificate was used to clarify Acklin’s commitment to Shelton before the deal with KFI to a bridge loan. KFI requested Shelton to reduce the value of the mortgage.
Loan Commitments
The loan commitments are the agreement between KFI and Acklin according to the documents provided by the court. As per the court KFI was able to provide a bridge loan to Acklin and also intended to use Rest in Peace as security. KFI wanted to find out the amount owed under the deal with Shelton. The mortgage would be on priority other than any mortgage to Acklin.
Loan Default
Acklin failed to pay the bridge loan in 2000. Seeing this KFI initiated to confiscate the proceedings on Rest in Peace cemetery. The Estoppel certificate brought to light the issue of whether KFI met the commitments as stated in the deal.
Legality Issues
The main legality issue in the Kennedy Funding lawsuit was the breach in the contract and fraud. Shelton alleged KFI that they failed to uphold the terms of the certificate and breached the contract. Shelton alleged that the company made a false representation and hid their fees and other laws.
The Judgment
The judgment was on the side of Shelton and they were awarded $1,675,000 based on the breach into the contract and the fraud. But KFI disagreed with the judgment and appealed that the estoppel certificate was not lawful due to the Arkansas Statute Frauds.
The Appeal
The KFI did not agree with the jury verdict. So, they appealed the decision and they argued that the certificate was not lawful because of Arkansas Statute Frauds. The company also said that there was insufficient documents or evidence to support the jury verdict.
Result of Kennedy Funding Lawsuit
The court passed a judgment in both parties favor. The court declared that the district court jury related to the breached contract claim but changed the judgment into a fraud claim of $675,000.
Conclusion
The article shows the deep study of Kennedy Funding Lawsuit and the complexities of the commercial real estate dealings. Kennedy Funding unlawful practices has taken them into a deep problem leading a series of lawsuits against. KFI still continues to operate their real estate business but there are a number of cases that are still going against them, which have destroyed the reputation of the business a lot.
FAQs
Ans. Yes, and the payment was reduced to $675,000.
Ans. Virgil Shelton is the owner of Rest in Peace Cemetery in Hensley, Arkansas.
Ans. Kennedy Funding, Inc.
Ans. Shelton was awarded $1,675,000.
Also Read About: Ajit Doval: Biography, Wiki, Career, Education & Journey
