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Home New Cases Real Estate Developer 1121 Pier Village Sues Multiple Defendants for Alleged Unregulated Lending Practices, Seeks More Than $ 5Million in Mortgages and Loans

Real Estate Developer 1121 Pier Village Sues Multiple Defendants for Alleged Unregulated Lending Practices, Seeks More Than $ 5Million in Mortgages and Loans

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May 27, 2021, Eastern District of Pennsylvania – Debtor-Plaintiff 1121 Pier Village LLC (“Pier”) and its four affiliates brought an adversary complaint against multiple defendants for avoidance and recovery of certain mortgages, loans, and forbearance agreement under Sec. 544, 548, and 550 of the Bankruptcy Code. According to the complaint, the case revolves around the Defendants’ alleged unlawful, undisciplined and unregulated lending practices, illegal overcharges and kickbacks, fraud, abuse of its superior leverage, and unequal bargaining power over Debtors, both directly and through actions of its affiliate and a pattern of racketeering activities. 

Defendants Sharestates Intercap Line LLC, Sharestates Investments LLC (collectively “Sharestates”) is a company, owned and controlled by Raymond Davoodi and Radni Davoodi as well as Allen Shayanfekr. Shayanfekr is an attorney licensed to practice in the State of New York. Debtors are limited liability companies engaged in the development of the residential real estate. The Debtors’ principals allegedly obtained financing for certain projects from the Defendants. Defendants allegedly agreed to fund not just the acquisition and improvements to the projects, but also to provide working capital to the Debtors.

In its complaint, Plaintiffs argued that the Defendants purportedly dictated when and how the Debtors could pay contractors, unilaterally changed the draw process, demanded a renegotiation of the loans under duress, and also exercised control and domination over the operations of the Debtors. According to the Plaintiffs, Defendants were a non-statutory insider of the Debtors, purportedly granted various mortgages of the property within a year of the petition date, and obtained a lien for far more value than the amount due on account of each mortgage. Allegedly, Defendants administered the loans for the projects in such a way that it robbed the Debtors of cash flow and working capital and maximized return to Sharestates by delays and charges, which were occasioned solely by Sharestates’s continuous breach of the loan agreements. The Plaintiffs contend that Sharestates presumably caused and encouraged the funding of one project at the expense of others.  

Accordingly, the Plaintiffs urge the court to enter judgment in their favor and avoid the alleged loans, mortgages, agreement and issue an order voiding and nullifying the mortgages and striking them from the records maintained by the Recorder of Deeds of Philadelphia County, Pennsylvania, and New York, New York. Besides, the Plaintiffs also brought fraud in the inducement, breach of duty of good faith, breach of fiduciary duty, equitable subordination, civil conspiracy, aiding and abetting fraud, etc. charges against the Defendants. The Plaintiffs also seek damages in the amount necessary to satisfy the mortgages and such other and further relief as the court deems just and equitable.

The case is In re 1121 Per Village LLC et al (Case Number – 21-11466) in the United States Bankruptcy Court for Eastern District of Pennsylvania. The Plaintiffs are represented by the law firm of Obermayer Rebmann Maxwell and Hippel, LLP.

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