A bit less than a month ago I examined documents at city hall that were held by the City Clerk - the entire file she had including stuff handed her by Nelson from when Nelson left - concerning the Flaherty transaction.
There was no recorded deed from the city to Flaherty.
There was no note draft, from whichever shell LLC will be signing.
Most worrisome, there was no guarantee draft agreed to by all, within the papers the city clerk held and made available for inspection.
I mentioned that to Kurt the day I was there. Mentioned as something he and Bill and Bray should look into.
That's important stuff.
Consider this: something flips the deal; title transfer is languishing in escrow; and some subcontractor fails to be paid. A lien gets slapped on things - on the property; and what's up if the city is still owner of record? And then Flaherty balks and threatens to walk? Wanting perhaps to escape giving a guarantee? Changing his mind, while being able to assert some technical objections? Where is the city left?
I do not pretend to have answers. I only have the questions and have no idea who, if anyone, has answers. Emily McGlone in the Flaherty trailer? Go ask her? Ask Bray? Ask Darren who can ask Cronk who is sitting in Indiana closer to Flaherty than to here?
Also, related to the Flaherty project. I don't like the safety aspect of driving Sunwood with cranes extended over the road. They fall, big hurt. It seems only sane that the Flaherty cranes be parked overnight and over-weekend over Flaherty's stuff, not our citizens' road.
Aren't there laws, rules, or standards of the contracting trade; you do not unreasonably endanger citizens' roadway traffic?
Any reader thoughts? Any help, from anyone?
It appears the transaction
has properly closed. The city clerk emailed me a number of documents which I
discovered minutes ago in the inbox. While I have not reviewed them I
hold them and hence am reassured.
Look for a FURTHER UPDATE after I
check the paperwork.
I am confused because there are two notes, and two guarantees. Note 1, $1.4 million, HRA as lender, "F & C Ramsey Member LLC" as borrower; Flaherty and Collins Construction, Inc. as guarantor. Note 2, $6.9 million, HRA as lender, same borrower, David Flaherty (alone, not both spouses) signing a personal guarantee. I have no idea why the baby was Solomon chopped; but it was. One would have to read a ton of paper, I decline. So, a deed, two notes, and two separate guarantees constitute the five documents the city clerk provided. Clearly, it closed. Closing statements were not provided, nor the final escrow instructions. Preliminary items were in the clerk's file, and I admit not studying the escrow instructions. The closing statements would be prepared at the end of things, but approved before the tender and acceptance and recording of the deed; and before tender and acceptance of the notes and guarantees. The escrow agent would make disbursements as the buyer and seller closing statements specified and escrow then ended.
My understanding is the City bonded and raised the cash, but the notes are payable to the HRA. Presumably the HRA assigns all rights to payment under the notes to the City, but keeps the right of reverter. That's a guess. Anyway, as a practical matter, it's the right pocket and the left pocket at play, split hairs however you like. If there is a payment default, then who does what may matter. But the Flaherty people intend to pay, or at least promise it.
Here is one for the lawyers to wrestle with. Flaherty's personal guarantee, at paragraph 10(iii), subject to the "United States Bankruptcy Code" language. Is it saying discharge of the primary obligor in a bankruptcy would discharge the guarantor? That surely is not in our citizens' best interest, if that's the meaning a Court would assign it. It is wholly ambiguous to me. It looks like a trap for the unwary. If I were the lender, I would want an ironclad unconditional guarantee surviving, expressly, the primary obligor's bankruptcy. They put a deal in Chapter 7 bankruptcy in North Carolina, that's the Flaherty track record.
If Flaherty, himself, goes bankrupt, that's a different matter, but what does that language mean?