Michigan Asset Protection Lawyer Blog

An extraordinary decision by the Michigan Court of Appeals should place asset protection planning at the forefront on the minds of all individuals who have outstanding nonrecourse guarantees of commercial loans. As a result of the decision handed down by the Court in the case of Wells Fargo Bank v. Cherryland Mall Limited Partnership, David Schostak and Schostak Brothers & Co. (December 27, 2011), real estate investors/developers employing nonrecourse commercial mortgage-backed securities ("CMBS") loans now find themselves personally liable for any deficiency if the loan defaults. You are undoubtedly wondering: if these are nonrecourse loans how can the loan guarantors become liable for the unpaid debt?

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It is not much of a stretch to understand why a Michigan asset protection lawyer would be contacted by a prospective client about a possible short sale. The concern of the homeowner, of course, is whether the lender will agree to accept the proceeds from the short sale in full satisfaction of the debt. The opportunity to have a debt discharged for less than its balance is a goal typical of the asset protection planner and thus a short sale can be an excellent strategy to reduce debt for which an individual has personal liability. However there are significant issues that need to be considered.

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