NEW ULM - Businessman Randy Danielson was awarded $1,056,714 on Monday in a civil lawsuit involving the Marktplatz Mall owners.
Brown County District Court Judge Robert Docherty ruled that NURD (New Ulm Retail and Development, owners of the north portion of the mall), owes Danielson's business, SEK Financial, LLC, $945,506 as of May 28, for a business loan agreement, promissory note and mortgage. Interest continues to accrue at the default rate of 9.41 percent. NURD owes SEK $111,207 in attorney's fees and costs, according to court documents.
Docherty ruled that NURD failed to appear at (the May 28) trial or present any evidence of its claims against Danielson and SEK. He ruled that NURD was in default for failing to appear for trial and all their claims against Danielson and SEK were dismissed with prejudice and on the merits.
NURD, now owned by Doug Cogan of Upland, Calif., claimed Danielson inaccurately accounted for a mall mortgage balance and misused NURD rent payments he collected.
Danielson denied the allegations and bought the mortgage in 2011 to avoid a sheriff's sale of NURD's part of the mall.
"We're trying to work out a settlement," Cogan said Tuesday. "I think Mr. Danielson is being very gracious in working with us. That's it."
Danielson said he has more than $170,000 in legal costs, but said he's trying to work out a "positive" settlement. "I tried to present what they (NURD) said against me and why I disagreed with it in court. I thought everything was cleared up in arbitration. They (NURD) called me two weeks before the trial and wanted me to turn the mall over to them for $250,000. In their original plan to me, they said I could make $1 million if I worked with them."
The original principal amount of the loan from American Bank of St. Paul to Retail Investment II, LLC, on March 10, 20015 was $875,000 with an original interest rate of 6.95 percent. A promissory note provided for a late charge of five percent of the unpaid portion of the regularly scheduled payment or $25, whichever is greater. The interest rate upon default rose another 4 percent, according to court documents.
In September 2008, NURD took an assignment of Retail Investment's interest in the mall and assumed obligations under loan documents including a $700,000 mortgage balance, according to court documents.
In May 2011, SEK entered into a Forbearance Agreement with NURD, agreeing that NURD was in default of SEK's mortgage. NURD agreed that SEK would collect rents from NURD's (mall) tenants under the assignment of rents, according to court documents.
First, NURD filed bankruptcy which required SEK to hire a lawyer to protect its interest. Second, as it relates to the current lawsuit, filed shortly after NURD dismissed its bankruptcy action, NURD sought to reduce the amount of indebtedness to SEK, according to court documents.
There was considerable time spent by SEK attorneys Matt Burton, Sean Schiff and Gary Monahan dealing with tenant and rent issues, an impending tax forfeiture caused by NURD's failure to pay real estate taxes to Brown County pursuant to a confession of judgement, and other tasks related to SEK's interest, according to court documents.
(Fritz Busch can be e-mailed at firstname.lastname@example.org).