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On February 19, 2009, when Owners confronted SFG about its sham construction budget,SFG responded by sending Owners a letter (the “Default Letter”), claiming defaults under theLoan which had no merit. When SFG learned that Owners had filed a motion for leave of court inVirginia (where the Project is located) to add SFG as a defendant to the complaint that Ownershad filed against Developer, SFG responded by wrongfully accelerating the Loan and rushed toCourt to file this action in Georgia.The undisputed facts demonstrate that all of the defaultsalleged by SFG were fabricated and that SFG had no right to accelerate the Loan.First, SFG claimed a default based on Owners’ purported inability to complete the Project by March 7, 2009.
The evidence shows, however, that SFG had extended, in writing, theCompletion Date to August 30, 2009. Under the terms of the Construction Contract dated March6, 2008, which SFG approved as a condition to closing the Loan on March 12, 2008, the Projectwas scheduled to be substantially completed within 15 months after the anticipated start date of April 1, 2008 (i.e. July 1, 2009). The July 1, 2009 completion date was extended to August 30,2009 in a Change Order dated April 27, 2008, which was also approved by SFG in writing. Thecontractor’s Change Order states: “The date of Substantial Completion as of the date of thisChange Order therefore is August 30, 2009.” In an E-mail dated April 28, 2008, Dilip Petigara, aSenior Vice President of SFG, demanded that, “The change order must be executed by all parties.”The Change Order was executed that day. Thus, the Completion Date was August 30, 2009, notMarch 7, 2009, as SFG claimed in the Default Letter.Second, SFG asserted a default based on a lawsuit filed by ML Private Financial LLC(“Merrill Lynch”) concerning a line of credit which Merrill Lynch extended to Halsey Minor years ago. Although Mr. Minor disclosed the Merrill Lynch line of credit to SFG at least ten
SFG filed the complaint in this action on February 22, 2009, before the alleged March 7, 2009 completion date.