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Sunday, May 31, 2020

Judge tosses suit seeking back payments on $2.5 million note

Lawsuits

By David Beasley | Apr 7, 2020

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The plaintiff will have to wait until 2022 before he can make any claim for unpaid installment payments in a $2.5 million loan. | Stock photo

NEW ORLEANS – A federal judge said a plaintiff has to wait until March 2022 to make a claim on missed payments for a $2.5 mllion loan unless a default event occurs.

U.S. District Court Judge Wendy Vitter dismissed a lawsuit by Alan Kirkendoll against Entertainment Acquisitions LLC over the missed payments on a $2.5 million promissory note.

The complaint said that Entertainment Acquisitions borrowed the money from Kirkendoll in 2015 and promised to make monthly payments of $35,200. Those payments stopped on April 1, 2017. The plaintiff filed his claim on April 3, 2019, seeking $880,005 in back payments plus interest and attorney fees.

Kirkendoll's complaint said that because the loan did not include an acceleration clause, he could not sue for the entire balance due.

The defendant claims the note is due on the maturity date, March 31, 2022. because the plaintiff did not show evidence of a “liquidity event” such as bankruptcy or insolvency.

“The Court finds that Plaintiff has failed to allege sufficient facts to state a claim to recover the monthly installment payments owed under the Promissory Note,” Vitter said in her order.

Missing payments on the loan is not one of the four “exclusive default events” the judge said.

 Kirkendoll conceded in court briefs that, “as of this point in time, no event of default exists,” the judge stated.

She dismissed the suit with prejudice, meaning Kirkendoll can’t file another federal lawsuit on the same issue.

“Likewise, plaintiff cannot foreclose on the collateral securing the promissory note until there has been an event of default,” she ruled.

U.S. District Court Louisiana Eastern Case number 2:19-cv-07942

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U.S. District Court for the Eastern District of Louisiana