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Enforcing a promissory note

Discussion in 'Commercial Transactions & Investments' started by kreozZ, Aug 2, 2016.

  1. kreozZ

    kreozZ Law Topic Starter Guest

    Jurisdiction:
    Massachusetts
    Hello,

    I'm lending money to a real estate investment company in exchange for a promissory note. The promissory note is tied up to a specific property and is written under the name of company's LLC-A. However, the property deed is recorded under the name of LLC-B (same company, different LLC).

    Question: if the company who wrote the note (LLC-A) defaults on paying the note back, will I be able to go after their LLC-B? Both LLC's are made for the same business purpose (real estate transactions).

    Thanks!
     
  2. army judge

    army judge Super Moderator

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    If you fear the loss of your funds for any reason, don't loan the money.
    If the LLC were solid, they could easily get a loan from a bank.
    If a bank won't touch them, you shouldn't either.

    My stock answers to all who ask me to loan money, is what did the bank tell you?
    If they don't say NO, they're lying, so I say NO.
    If they do say NO, the answer will be the same, NO.

    There are no guarantees when you loan money, only pie in the sky solutions which rarely work as touted.
     
  3. adjusterjack

    adjusterjack Super Moderator

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    LLC-A cannot "tie up" a property that it doesn't own.

    Obviously, you can "go after" whoever or whatever you want to "go after" but you will never see a nickel from LLC-B because LLC-B is not a party to your contract and your promissory note from LLC-A is just a worthless piece of paper without the note being secured by a properly written and recorded mortgage from the deeded owner of the property. And while you are at it get some personal guarantees from the principles.
     

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