Chapter 6 - THE HOUSE VICTOR THOUGHT HE OWNED
Victor’s second victory was Daniel’s mansion.
During the worst part of the company crisis, Daniel pledged his Chicago home as collateral supporting a corporate rescue note.
NorthBridge later acquired the note.
Victor’s acquisition entity bought the loan package during restructuring.
At the boardroom celebration, Victor told Daniel:
“Your house too.”
Technically, he was premature.
The foreclosure had not completed.
Worse, the assignment to Victor’s entity was funded with proceeds from the same NorthBridge loan now under review.
If the acquisition financing defaulted, rights to certain collateral could revert or be subject to control remedies.
Victor did not own Daniel’s house.
He owned a complicated path toward it.
Then another problem appeared.
The mansion was partly owned by the Mercer Heritage Trust.
Daniel personally owned the residential improvements and leasehold interest.
The underlying land belonged to the trust.
Victor’s collateral schedule described “fee simple ownership.”
Wrong.
Who prepared the schedule?
Victor’s lawyer.
Who certified it?
Victor.
NorthBridge had relied on that certification in its collateral valuation.
Mara stared at the document.
“He tried to finance a takeover using a house he didn’t fully understand.”
Daniel smiled.
“That sounds familiar.”
She looked at him.
“You overleveraged a company you didn’t fully understand.”
His smile disappeared.
“Fair.”
Daniel’s mistakes had created the battlefield.
May you like
Victor’s dishonesty determined what happened next.
Both could be true.
