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the foreclosure. This left GSD, petitioner, and Schlesinger
owing a balance of $27,742,833 on the Sunbelt note. GSD
continued to accrue interest on the Sunbelt note after
foreclosure. Sunbelt sought to collect from petitioner
individually because he was GSD’s general partner and had
guaranteed the note.
In June 1988, GSD, petitioner, and Schlesinger sued Sunbelt
in Federal District Court to recover Encino Park. The plaintiffs
alleged that the Sunbelt note and guaranty were not enforceable,
that Sunbelt was a partner and joint venturer of Encino Park, and
that the foreclosure was wrongful. GSD, petitioner, and
Schlesinger also filed notices of lis pendens against Sunbelt in
November 1988 and September 1989 to ensure that Encino Park would
not be sold before the court resolved their claims. In February
1990, the State and Federal suits were consolidated in Federal
District Court.
In May 1990, the State of Texas filed a condemnation action
against Sunbelt, GSD, petitioner, and Schlesinger in State
probate court. The State of Texas ordered Sunbelt, GSD,
petitioner, and Schlesinger jointly to make condemnation payments
of about $1.8 million plus interest to the State probate court.
In 1995, the condemnation proceeds were distributed to Sunbelt’s
successor in interest, the Resolution Trust Corp., in partial
payment of the loan deficiency to Sunbelt.
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