Home japan financial crisis Loan company sues Hutto for $ 15 million over Perfect Game project

Loan company sues Hutto for $ 15 million over Perfect Game project

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A finance company sued Hutto, claiming the city had to repay a $ 15 million loan it received from the company to buy a field and pay for other costs related to the Perfect Game baseball project.

Preston Hollow Capital of Dallas filed a federal lawsuit on September 22, claiming the city defaulted on the loan after buying land with the money and then ruled the finance company had no right to foreclose the land because the loan agreement was invalid.

The town’s attorney said the loan was void due to the town’s own mistakes, according to the lawsuit. He said those errors included that the city had not properly published the loan agreement for review in accordance with the requirements of the Texas Open Meetings Act.

He also said the mistakes the city said it made included the loan deal never being reviewed or approved by the Texas attorney general’s office..

Dottie Palumbo, the city’s district attorney, said at the city council meeting Thursday night that the city “was eager” to present its side of the story in court.

She said the city had a disagreement with Preston Hollow over state law regarding the loan. She said she would not make any further comments.

Preston Hollow also sued Cottonwood Development Corporation, a government entity formed by Hutto to manage the Perfect Game project money and bonds.

Perfect Game is a baseball scouting company that announced in April 2019 that it would be moving their national headquarters from Iowa to Hutto.

The estimated $ 800 million project, the largest economic project in the city’s history, is expected to include Hutto’s first indoor sports and events center, designed for 13,000 people. It is also expected to have a convention hotel, 24 baseball diamonds, and office, commercial, medical and residential space.

Preston Hollow Capital has a “long-standing, historically constructive relationship with the Town of Hutto,” Greg May, the company’s chief business development officer, said in an email Thursday.

“We made this loan in good faith, and it is deeply troubling that the city and the Cottonwood Development Corporation (CDC) took our money and then disowned their deals with us,” May said.

“We believe that the case can be resolved amicably once the atmosphere of unrest and dysfunction between city officials and their advisers has subsided., ” he said. “In the meantime, we have taken the necessary action to uphold our rights and rectify a surprising and unfortunate injustice.”

According to the lawsuit, Preston Hollow loaned $ 15 million to the city and the Cottonwood Development Corporation in February. Cottonwood then spent $ 11.6 million from the loan to buy two plots of land for Project Perfect Game and $ 600,000 to settle a lawsuit with Wolverine, a former developer of the project, according to the lawsuit.

He said Preston Hollow also put $ 2.5 million of the loan into receivership.

Preston Hollow sent Cottonwood Development Corporation a notice on April 30 stating that it had defaulted on the loan by not meeting certain conditions, according to the lawsuit. These conditions included the failure to reach an agreement providing that 75% to 100% of the municipal portion of the property taxes on land related to the Perfect Game project would be used to finance the costs related to the project.

Preston Hollow then asked for the loan to be repaid, but the city refused to do so, according to the lawsuit. Preston Hollow then sent the town a notice in May stating that it planned to seize on July 7 the land the Cottonwood Corporation had purchased with the loan.

“The defendants took the incredible position that the loan agreements were null and void due to the city’s own defaults, and therefore PHC (Preston Hollow Capital – whose money, it is true, used by the defendants to pay the real estate in question – had no right to seize, “said the lawsuit.

A finance company sued Hutto, claiming the city had to repay a $ 15 million loan it received from the company to buy a field and pay for other costs related to the Perfect Game baseball project.

Preston Hollow Capital of Dallas filed a federal lawsuit on September 22, claiming the city defaulted on the loan after buying land with the money and then ruled the finance company had no right to foreclose the land because the loan agreement was invalid.

The town’s attorney said the loan was void due to the town’s own mistakes, according to the lawsuit. He said those errors included that the city had not properly published the loan agreement for review in accordance with the requirements of the Texas Open Meetings Act.

He also said the mistakes the city said it made included the loan deal never being reviewed or approved by the Texas attorney general’s office..

Dottie Palumbo, the city’s district attorney, said at the city council meeting Thursday night that the city “was eager” to present its side of the story in court.

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