$3.4 Million Foreclosure Suit Against George Markopoulos

Crain's reporter Marissa Oberlander covers what happened to a George Markopoulos development that was the subject of a a $3.4 million foreclosure suit. The property in question is described as a "venture of George Markopoulos, principal with Northbrook-based Praedium Development Corp."

The foreclosure suit was filed by Wells Fargo Bank, in its role as trustee for holders of commercial mortgage-backed securities. According to the article, CWCapital Asset Management LLC subsequently bought a controlling interest in the property through a sheriff's sale. In the end, the property, a commercial mall in Elmwood Park, was purchased by Chicago-based McGarry Properties L.P.

In related coverage of people named Markopoulos involved with Elmwood Park foreclosures, Crain's has written that Charles Markopoulos of Akton Realty Corporation was involved with a shopping mall venture in the area: "Mr. Markopoulos has specialized in small retail projects, such as Galewood Plaza, a 14,000-square-foot strip mall at 6600-6624 W. North Ave. in west suburban Elmwood Park."

This mention is in a larger article about a foreclosure on a Charles Markopoulos property in Orland Park, with Crain's writing that: "A venture led by developer Charles Markopoulos defaulted on a loan secured by an 18-acre development site at Wolf Road and 159th Street in the south suburb, according to a lawsuit Wheatland Bank filed Dec. 11 in Cook County Circuit Court." Loans for this venture were provided by Wheatland Bank, a bank that later failed.

Wheatland Bank was litigated against specifically for backing loans to Galewood Plaza II, LLC. Justia's coverage of this case notes that "Notwithstanding the condition of the collateral, the Loan Committee Defendants approved the loan without ensuring that the borrower had the cash flow to repay the loan. Furthermore, rejected such a “conscious disregard” standard for gross negligence claims against bank directors and noted that bad faith was not required to plead a breach of the duty of care. 966 F. Supp. at 636. Defendants have not cited any Illinois cases applying the Caremark or Citigroup standards for an Illinois corporation under Illinois law. The loan allegedly was approved without obtaining current financial information from the borrower or the guarantor. The guarantor, a major shareholder of Wheatland, was only required to provide a 25 percent personal guaranty in violation of the Bank’s written loan policies."

As you read through the articles on this site, you will likely notice a pattern that, sadly, is increasingly common. Real estate developers with records that include foreclosures and lawsuits are later backed by new financial backers and supported by government representatives (aldermen, mayors, etc.). A project can fail -- often at great cost to the local community and in many cases after using local resident's tax money via TIF funding -- and the developers, when things go wrong, often simply just move on to the next neighborhood and the next project.