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UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLORADO
IN RE:
)
)
Brent Sanders Herron
)
Case No. 25-14392-KHT
)
Chapter 11
)
Debtor.
)
______________________________________________________________________________
MOTION FOR APPOINTMENT OF TRUSTEE
______________________________________________________________________________
MidCountry Bank (“MidCountry”) by and through its undersigned counsel, hereby moves
this court for the appointment of a Chapter 11 Bankruptcy Trustee pursuant to 11 U.S.C. § 1104
and Bankruptcy Rule 2007.1 and in support thereof states as follows:
INTRODUCTION
This bankruptcy case involves a dishonest debtor who has committed loan fraud against
MidCountry, resulting in a judgment. The Chapter 11 case of Brent Sanders Herron (“Debtor”), a
licensed physician who currently runs his own medical practice, was filed as part of a further effort
by the Debtor to defy court orders, avoid the appointment of a receiver over his limited liability
companies, and avoid creditors’ claims and collection efforts through dishonesty. As set forth in
more detail below, Debtor’s conduct requires the appointment of a Chapter 11 trustee for cause
under section 1104(a) because the Debtor has demonstrated a clear inability to act in the best
interest of creditors. Instead the Debtor seeks only to further his own personal benefit at the
expense of the bankruptcy estate. MidCountry’s claim against the Debtor arises in part from a
judgment in the amount of $2,931,208.94 it received against the Debtor in Minnesota state court
on October 15, 2025 (the “Judgment”). That Judgment supports this motion because the judgment
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resulted from the Debtor’s fraud in inducing MidCountry to lend him $24 million dollars to finance
a commercial building owned by an entity Debtor created. In order to receive this loan, Debtor
falsified the purchase price of the transaction, and further falsified his own financial information
which was relied upon by MidCountry to assess the viability of the loan. After MidCountry
obtained the multi-million dollar judgment, the Debtor continued to disregard court orders,
obfuscate, move, and hide assets to thwart MidCountry’s collection efforts.
The Debtor’s conduct in obtaining the loan by, but not limited to, falsifying the purchase
price of a property in a purchase agreement, providing materially false financial information to
MidCountry to secure the loan, and willingly participating in a “seller carry” loan without
disclosing such arrangement with MidCountry, shows that cause exists to appoint a Chapter 11
trustee and that such appointment is in the best interests of creditors. This Debtor cannot be trusted
to honestly and responsibly manage the bankruptcy estate for the benefit of creditors during the
pendency of this bankruptcy case. Appointing a Chapter 11 trustee is also in the clear best interest
of creditors to ensure a fair and accurate process to maximize value for creditors and parties in
interest.
FACTUAL BACKGROUND
1.
On July 15, 2025, the Debtor filed a voluntary petition under Chapter 11 of the
United States Bankruptcy Code.
2.
The Debtor is an individual Chapter 11 debtor.
3.
Freeport Elk River LLC (the “Company”) and MidCountry entered into that certain
Loan Agreement dated October 21, 2021 (“Loan Agreement”) to finance the Company’s
acquisition of a retail center located at 19216 Freeport Street NW in Elk River, Minnesota.
(Affidavit of Steve Meads (“Meads Aff.”), Ex. A).
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4.
In connection with the Loan Agreement, the Company executed and delivered to
MidCountry that certain Real Estate Note dated October 21, 2021 (“Note”), in the original
principal amount of $24,240,000. (Meads Aff., Ex. B).
5.
To guaranty the payment and performance of the Company’s obligations to
MidCountry, including, but not limited to, those under the Loan Agreement and Note, Debtor
executed and delivered to MidCountry that certain Personal Guaranty dated October 21, 2021
(“Guaranty”), pursuant to which Debtor absolutely, and unconditionally guaranteed to
MidCountry payment of the Note and other obligations of the Company to MidCountry. (Meads
Aff., Ex. C).
6.
MidCountry disbursed the principal proceeds of the Loan in accordance with the
terms and conditions of the Loan Documents in exchange for, among other things, Debtors’
promises (i) to make monthly payments of principal and interest as required under the Loan
Documents; (ii) to abide by the financial and operating covenants set forth in the Loan Documents;
and (iii) that its representations and warranties contained in the Loan Documents were, and would
remain, true. (Meads Aff., ¶ 8).
7.
MidCountry relied on Debtor’s promises, covenants, representations and warranties
reflected in the Guarantees when MidCountry agreed to issue the Note and extend the Loan.
(Meads Aff., ¶ 9).
8.
Debtor defaulted and materially breached certain terms, conditions, and covenants
of the Loan Documents, including, but not limited to, falsifying the purchase price of the Real
Estate in a purchase agreement and providing materially untrue information to MidCountry in
order to secure the Loan, in addition to failing to timely pay amounts due and owing to MidCountry
under the Loan Documents. (Meads Aff., ¶ 10).
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9.
In the Loan Documents, Debtor warranted that the information furnished to
MidCountry is true and correct, but Debtor falsified the purchase price of the real property in a
purchase agreement to secure the Loan. (Meads Aff., ¶ 11).
10.
Debtor provided MidCountry with materially untrue financial information to falsify
his financial position. (Meads Aff., ¶ 12).
11.
Additionally, Debtor falsely inflated his cash reserves on his Personal Financial
Statement to make it appear that he had materially greater cash on hand than he actually had.
(Meads Aff., ¶ 13).
12.
Specifically, Debtor accepted a wire in the amount of $9,500,000.00 from his co-
conspirator, Matt Onofrio (“Mr. Onofrio”), to inflate Debtor’s cash reserves and deceive
MidCountry. The next day, Debtor then wired the money back to Mr. Onofrio. (Meads Aff., ¶ 14;
Ex. D).
13.
Mr. Onofrio used this deceptive transfer to mislead MidCountry as to the amount
of cash in Debtor’s account and fraudulently induce MidCountry to provide the $24,240,000 loan.
(Meads Aff., ¶ 16).
14.
On November 17, 2022, Mr. Onofrio was indicted in Federal District Court for the
District of Minnesota on three counts of bank fraud (Case No. 22-CR-00322, and he ultimately
pleaded guilty to one count of bank fraud. (Meads Aff., ¶ 17, Ex. E).
15.
Debtor knew that Mr. Onofrio falsified the appraisal of the retail center and was
engaging in a “seller carry” note to finance the retail center without MidCountry’s approval or
knowledge. (Meads Aff., ¶ 19, Ex. F).
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16.
On October 11, 2024, the Sherburne County District Court in Minnesota, in case
No. 71-CV-24-752 entered an order (“Order”)against Debtor, the Company, and Debtor’s wife,
Michelle Herron (“Ms. Herron1”). (Meads Aff., ¶ 21).
17.
The Order made several factual findings of fraud conducted by Debtor, including
falsifying the purchase price of the retail center in a purchase agreement and providing materially
untrue information, including financial information, to MidCountry in order to secure the loan,
specifically it found:
a.
Borrower and Guarantors defaulted and materially breached certain terms,
conditions, and covenants of the Loan Documents, including, but not limited to,
falsifying the purchase price of the Real Estate in a purchase agreement and
providing materially untrue information to Bank in order to secure the Loan, in
addition to failing to timely pay amounts due and owing to Bank under the Loan
Documents.
b. In the Loan Documents, Borrower and Guarantors warrant that the information
furnished to Bank are true and correct, but Defendants falsified the purchase price
of the Real Estate in a purchase agreement to secure the Loan.
c.
Guarantors provided Bank with materially untrue financial information to falsify
their financial position.
(Meads Aff., ¶ 22; Ex. G at ¶¶ 22, 24).
18.
The Order also directed judgment to be entered against Debtor, the Company, and
Ms. Herron, jointly and severally, in the amount of $2,931,208.94. (Meads Aff., ¶ 23).
1 On August 12, 2025, Ms. Herron filed her own separate Chapter 11 petition before this Court in
Case No. 25-15060-KHT.
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19.
On October 15, 2025, the Sherburne County District Court entered judgment in
favor of MidCountry and against the Company, Debtor, and his wife, jointly and severally, in the
amount of $2,931,208.94. (See Court Index #24-25).
20.
The judgment amount is the deficiency that remained on the loan after the retail
center was sold and proceeds of the sale were applied to the loan balance. (Meads Aff., ¶ 25).
21.
On November 9, 2024, MidCountry docketed the Minnesota Judgment in Adams
County, Colorado, Case Number 2024-CV-31629. (Affidavit of Richard D. Beller (“Beller Aff.”),
¶ 3 & Exhibit H).
22.
A true and correct copy of the Order for Confirmation of Registration of Foreign
Judgment is attached to the Beller Affidavit as Exhibit H.
23.
On December 29, 2024, the Adams County District Court entered Charging Orders
(the “Charging Orders”) against the Debtor’s businesses, including Redwood Medical, LLC
(“Redwood”), Simply Styled USA LLC (“Simply Styled”) and Living Well Design USA, LLC
(“Living Well Design”). (Beller Aff., ¶ 4 & Ex. I).
24.
True and correct copies of the Charging Orders are attached to the Beller Affidavit
as Exhibit I.
25.
The Adams County District Court’s Charging Order against Debtor’s 100%-owned
company, Redwood, required Redwood to take the following actions, including the delivery of all
financial records over the past three years, and payment of Debtor’s full distributive share from
Redwood:
a.
Required to pay to Plaintiff Debtor’s full distributive share, whether or not Debtor
normally draws his full share due.
b. Prohibited from making any loans to any person until the Judgment is fully
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satisfied.
c.
Prohibited from acquiring any capital assets.
d. Prohibited from selling or encumbering any property belonging to the limited
partnership or limited liability company.
e.
Required to deliver all financial records from the past three years, including balance
sheets, current accounting in electronic and paper form, tax returns, operating
agreements, and books of account to Plaintiff’s counsel.
(Beller Aff., ¶ 6 & Ex. I p. 2 ¶ 3.)
26.
Debtor holds a 100% membership interest in Redwood, but has yet to pay the Bank
a single dollar from Redwood, nor has he produced the required three years of financial records
from Redwood, in clear disregard of the Adams County District Court’s Charging Order. Debtor
instead successfully thwarted and evaded the Court’s Charging Order, and frustrated Plaintiff’s
collection of the Judgment and the court-ordered discovery. MidCountry also filed motions to
compel and for sanctions due to the Judgment Debtor’s failure to provide financial documents
pursuant to the Charging Orders. (Beller Aff., ¶¶ 7-9).
27.
Debtor opposed MidCountry’s motions to appoint a receiver. As part of that
opposition, Debtor requested that the state court schedule a hearing on MidCountry’s motions to
appoint a receiver, stalled that hearing for months by claiming that Debtor was not available for
the state court’s available hearing dates until July 17, 2025, and then filed Debtor’s Chapter 11
petition in this case on July 15, 2025, only three days before the scheduled July 18, 2025 hearing
date on MidCountry’s motions to appoint a receiver for Redwood, Simply Styled, and Living Well
Design. Thus, this entire proceeding arises in large part as an attempt to avoid the appointment of
a fiduciary over significant portions of Debtor’s estate. (Beller Aff., ¶¶ 9-10).
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28.
MidCountry took the Debtor’s deposition on February 3, 2025.. Debtor’s false
testimony at that deposition again confirm that Debtor cannot be trusted. For example, Debtor
testified that he had no continuing involvement with BBSC Endurance LLC:
Q· · ·What is BBSC Endurance?
A· · ·That is a business that I owned previously.
Q· · ·What kind of a business was that?
A· · ·It was a running triathlon event production company.
Q· · ·Is BBSC Endurance still in business?
A· · ·I believe so.
Q· · ·Did you sell it?
A· · ·Yes.
Q· · ·How much did you sell it for?
A· · ·I don't recall the exact number.
Q· · ·When did you sell it?
A· · ·I would be speculating.· It was around when my kids were born, and they're
three and four.
Q· · ·Okay.· So is it fair to say that you sold BBSC, LLC roughly three to four
years ago or ·before?
A· · ·Yeah.
Q· · ·Okay.· How much did you sell it for?
A· · ·I said I don't recall exactly.
Q· · ·Do you have any current interest in BBSC Endurance?
A· · ·No.
Q· · ·How much of BBSC Endurance did you own?
A· · ·100 percent.
Q· · ·Since you sold it, have you been involved in any way with BBSC
Endurance?
A· · ·No.
Brent Herron Deposition at p. 27, line 10- p. 28, line 14 (February 3, 2025) (Beller Aff., ¶ 11 &
Ex. J).
29.
Despite testifying that he had “no” current interest in BBSC Endurance at his
deposition, in his bankruptcy petition Debtor now discloses that he sold BBSC Endurance in 2021
for $981,789.00 through an Installment Sale, through a “15 year owner financing loan.” Debtor’s
Schedule A/B ¶ 30, (Debtor’s Petition at p. 22 of 46). Debtor’s Petition reveals that Debtor
received gross income of $63,289 from BBSC in 2025 alone, with regular monthly payments of
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$10,548.17 per month. Debtor’s Statement of Income ¶ 10 (ECF 5, at p. 2); Debtor’s Statement
of Financial Affairs ¶ 5 (ECF 1, at p. 9). Debtor also testified at his 341 Meeting of Creditor that
he is receiving the monthly payments of approximately $10,500.00 from the sale of BBSC
Endurance. Incredibly, Debtor falsified his prior testimony to avoid collection. Debtor also failed
to reveal or include in his bankruptcy schedules a whole life insurance policy, which at the 341
Meeting of Creditors the Debtor did then note has a cash surrender value of approximately
$80,000.00. (Beller Aff., ¶¶ 16-19 & Ex. L ¶ 43).
30.
Debtor further refused to provide a straightforward answer to simple questions
regarding the payments he has been taking from Redwood since the Judgment was entered against
him, and the Charging Order was entered against his medical practice, Redwood:
Q…Do you own Redwood?
A· · ·From the basis of what I know to be an employee, I'm not an employee of
anybody.
Q· · ·Okay.· Do you own 100 percent of Redwood?
A· · ·Yes.
Q· · ·What is the full name of Redwood?
A· · ·Redwood Medical, LLC.
Q· · ·Are you paid a regular wage at Redwood?
A· · ·No.
Q· · ·Do you take distributions?
A· · ·No.
Q· · ·Does Redwood pay you anything by any means?
A· · ·No.
MR. LEVY:· Objection to form, vague.
Q· · ·(By Mr. Beller)· Do you take profits from Redwood?
A· · ·No.
Q· · ·And are you paid a salary or wage?
A· · ·I think you just asked that.
MR. LEVY:· Objection, asked answered.
Q· · ·(By Mr. Beller)· Okay.· Do you get, in addition to your salary, any other
benefits ·fees, commissions, stock options, profit sharing contributions or
bonuses from Redwood?
A· · ·No.
MR. LEVY:· Objection to form.
Give me a chance to object, please.
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Q· · ·(By Mr. Beller)· Do you take profit sharing from Redwood?
A· · ·I thought you just asked that.
Q· · ·So you're saying you get zero income from Redwood?
A· · ·You're saying right now?
Q· · ·Since --· Since October 15, 2024, have·you received any income from
Redwood?
MR. LEVY:· Objection to form.
A· · ·To be honest, I really don't think so. Yeah, I . . .
Q· · ·(By Mr. Beller)· When was the last time Redwood paid you money?
A· · ·I would have to look.
Q· · ·Was it before October 15, 2024?
MR. LEVY:· If you know, you can answer.
A· · ·Was it before --
Q· · ·(By Mr. Beller)· Yes.
A· · ·-- or have I been paid since then?
Q· · ·Yeah.· Have you been paid since then by Redwood?
MR. LEVY:· Objection, asked and answered.
A· · ·I've --· Yes, I probably have at some point.· I'm not sure the last time I've been
paid. You said am I currently getting distributions, and I am not.
Q· · ·(By Mr. Beller)· How much did Redwood pay you by any means in 2024?
A· · ·Extremely variable.
Q· · ·I just mean total.
A· · ·I believe I gave you a profit and loss.
I don't know exactly what my distribution was.
Q· · ·Can you approximate?
MR. LEVY:· Objection, calls for speculation.
A· · ·I really can't, to be honest.
Q· · ·(By Mr. Beller)· How often do you take distributions from Redwood?
A· · ·Extremely variable.
Q· · ·When was the last time you took a distribution from Redwood?
A· · ·I think you already asked that.· I said I'm not sure.· Not recently.· We haven't
had any·actual money.
Q· · ·Since October 15, 2024, list all ·sources of income you've received from
anybody.
MR. LEVY:· Objection to form.
THE DEPONENT:· So that means --· So you objected.· Does that mean I don't
have to answer?
MR. LEVY:· No.· You have to answer. It's an objection to form.
Can we go off the record for a second? Can I step outside with him for a second?
MR. BELLER:· Sure.· That's fine if you want to explain the objections, that's okay
with me.
(Recess from 10:24 a.m. to 10:25 a.m.)
MR. BELLER:· Can you please read back the last question?
(Last question read.)
A· · ·I don't recall.
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MR. LEVY:· I'm going to object to form anyway on the question, but --· Yeah.· If
you could define "income" better by maybe asking for ·some examples.
Q· · ·(By Mr. Beller)· So here I'm using ·"income" the way the IRS would use
"income."· It's a defined term.· You have to put it on your tax return.
Have you received any income from anybody in 2025 for month-ending 2025?
A· · ·I don't recall.· No, I don't think so.
Q· · ·Since October 15, 2024, have you received any income?
MR. LEVY:· Objection to form.
I really don't think so
Brent Herron Deposition at p. 10, line 1- p. 14, line 7 (February 3, 2025) (attached as Exhibit J).
(Beller Aff., ¶ 20-21 & Exhibit J).
31.
Yet, despite Debtor’s claim of not receiving any income since October 15, 2024
from his medical practice or two other LLCs, Debtor somehow paid three mortgage payments on:
1) his home at 2153 S. Dayton Street, Denver, Colorado 80231, with an estimated value of $1.35
million
(https://www.zillow.com/homedetails/2153-S-Dayton-St-Denver-CO-80231/13055189
_zpid/; 2) his home which Ms. Herron occupies at 10365 N. Julian Court, Westminster, CO 80023,
with an estimated value of $765,000 (https://www.zillow.com/homedetails/10365-Julian-Ct-
Westminster-CO-80031/12977037_zpid/); and 3) Debtor’s cabin at 23 Grand County Road 6121,
Granby Colorado, with an estimated value of $751,200 (https://www.zillow.com/homedetails/23-
Gcr-6121-Granby-CO-80446/2088773733_zpid/).
32.
Debtor also paid high monthly payments on a BMW I8, a Tesla Model X, and a
2022 Ford Bronco which are registered to him. See Brent Herron Deposition at p. 50, line 9 – p.
53, line 14, and p. 56, line 19 – p. 57, line 21 (February 3, 2025) (Exhibit J to Beller Aff.).
33.
In his deposition, Debtor testified that he has no role with Living Well Design, and
that he has received no money from it. (Beller Aff., ¶ 21 & Exhibit J at p. 24, line 4-18).
34.
In contrast, Debtor’s wife testified that Debtor has withdrawn $25,000 and $4,000
from the Living Well Design bank account in 2025 alone, after the state court’s Charging Order
was entered, and that he has access to the company’s funds. See Michelle Herron Deposition at p.
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16, line 3 – p. 18, line 24, and p. 114, line 4 – p. 116, line 8 (April 23, 2025) (attached as Exhibit
K to Beller Aff.).
ARGUMENT
A motion to appoint a trustee presents a single question to the court: will this Debtor act
as a faithful fiduciary for the creditors? “[E]xcessive improper misconduct, either prepetition or
postpetition, may indicate that the DIP will be an unreliable representative of the estate.” In re
Microwave Products of America, Inc., 102 B.R. 666, 672 (Bankr. W.D. Tenn. 1989).
The Court must appoint a Chapter 11 trustee here if cause is shown, including for fraud,
dishonesty, incompetence, or gross mismanagement by the debtor either before or after the filing
of the case, or for similar cause or if such appointment is in the best interests of creditors. 11 U.S.C.
§ 1104(a)(1)-(2); see In re Okla. Refining Co., 838 F.2d 1133, 1136 (10th Cir. 1988) (Once cause
is found the Court has no discretion and must appoint a trustee.); In re Plaza de Retiro, Inc., 417
B.R. 632, 640 (Bankr. D. N.M. 2009) (appointment of a Chapter 11 trustee is mandatory when
cause is found). Section 1104(a) states that “the court shall order the appointment of a trustee” (1)
“for cause, including fraud, dishonesty, incompetence, or gross mismanagement . . .” or (2) “if
such appointment is in the interests of the creditors . . . .” 11 U.S.C. § 1104(a). Here, Debtor’s
fraudulent conduct, false statements/dishonesty, refusal to comply with court orders, and
movement of assets away from creditors require that the Court appoint a trustee under Section
1104(a) for cause—such appointment is also in the best interests of creditors.
Moreover, the list of enumerated “causes” under Section 1104(a) is not exhaustive, and a
court may consider whatever relevant factual circumstances exist. In re Colorado-Ute Electric
Ass’n, Inc., 120 B.R. 164, 174 (Bankr. D. Colo. 1990). The creditors’ right to seek the appointment
of a trustee is an “important protection that courts should not lightly disregard or encumber with
overly protective attitudes towards debtors-in-possession.” In re V. Savino Oil & Heating Co., Inc.,
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99 B.R. 518, 525 (Bankr. E.D.N.Y. 1989). It is a misconception that the need for a trustee must
be shown by ‘clear and convincing’ evidence; the statute and its legislative history provide no
support for that assertion. In re Colby Construction Corp., 51 B.R. 113, 116 n.2 (Bankr. S.D.N.Y.
1985).
Bankruptcy Code section 1104(a) states:
(a) At any time after the commencement of the case but before confirmation of a plan, on
request of a party in interest or the United States trustee, and after notice and a hearing, the
court shall order the appointment of a trustee—
(1) for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the
affairs of the debtor by current management, either before or after the commencement of
the case, or similar cause, but not including the number of holders of securities of the debtor
or the amount of assets or liabilities of the debtor; or
(2) if such appointment is in the interests of creditors, any equity security holders, and other
interests of the estate, without regard to the number of holders of securities of the debtor
or the amount of assets or liabilities of the debtor.
11 U.S.C. § 1104 (Emphasis added).
In determining whether “cause” to appoint a trustee exists, courts must consider the
debtor’s pre-petition conduct. In re Oklahoma Refining Co., 838 F.2d 1133, 1136 (10th Cir. 1988);
In re Rivermeadows Assocs., Ltd., 185 B.R. 615, 619 (Bankr. D. Wyo. 1995) (even if the debtor’s
“postpetition financial practices have been exemplary . . . the prepetition conduct of debtor’s
management may be the sole deciding factor”). The statute is mandatory and dictates that upon a
finding of cause, the court is required to appoint a Chapter 11 trustee. In re Sillerman, 605 B.R.
631, 642 (Bankr. S.D.N.Y. 2019).
In determining whether appointment of a trustee would be in creditors’ interests under
section 1104(a)(2), courts consider (i) the trustworthiness of the debtor; (ii) the debtor’s past and
present performance and future prospects for debtor’s rehabilitation; (iii) the confidence or lack
thereof of the debtor’s creditors; and (iv) the potential benefits of a trustee balanced against the
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cost thereof. In re Colorado-Ute Electric Ass’n, supra, 120 B.R. at 176; In re Plaza de Retiro,
Inc., 417 B.R. at 641 (same) (“Another independent ground for appointing a trustee is either a
perceived dishonesty or withholding of information or a debtor’s inability to provide accurate
records and reports.”); In re Ionosphere Clubs, Inc., 113 B.R. 164, 168 (Bankr. S.D.N.Y. 1990).
The best interests test is less stringent than the “for cause” requirement because the court has broad
discretion to appoint a trustee when it is in the best interests of the parties, without any showing of
fraud, mismanagement, or other finding of fault or cause. See In re Ionosphere Clubs, Inc., 113
B.R. at 168. The discretionary nature of this test “involves to some extent weighing equities.” In
re Marvel Ent. Grp., Inc., 140 F.3d 463, 475 (3d Cir. 1998).
The facts of this case dictate that a Chapter 11 trustee must be appointed because the
Debtor’s prepetition conduct involved fraud in obtaining a loan from MidCountry, dishonesty in
disclosure of assets, and the Debtor’s participation with Mr. Onofrio in what ultimately resulted in
Mr. Onofrio’s indictment on three counts of bank fraud, and Mr. Onofrio’s subsequent guilty plea.
The Debtor cannot be trusted to administer the bankruptcy estate for the benefit of creditors when
he lied on his personal financial statement and blatantly defrauded MidCountry in order to secure
a $24,000,000.00 loan for his entity, which quickly went under. (Meads Aff., ¶¶ 12-14; Ex. D-E).
Again, Debtor was in business with an individual who has pleaded guilty to criminal bank fraud.
(Meads Aff., ¶ 17). Even after judgment was entered against the Debtor and in favor of
MidCountry, Debtor continued to lie under oath, deceive MidCountry, defy court orders to produce
financials of his businesses, and remitted funds from his medical practice to pay his individual
expenses. See Beller Aff. ¶¶ 5, 7-8, 11-22 & Exhs. J & K. Debtor’s dishonesty and fraudulent
conduct are cause for appointment of a trustee.
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15
Additionally, Debtor is a high earning physician with millions in assets, numerous vehicles
and parcels of real property. It is critical that a trustee be appointed to manage these assets,
particularly when the Debtor has consistently tried to deceive creditors such as MidCountry. The
appointment of a trustee ensures that Debtor’s assets (and any income that those assets are
producing) are protected and included in the bankruptcy estate to benefit creditors and parties in
interest. The cost of appointing a trustee pales in comparison to the risk of permitting Debtor
manage his assets unchecked and misuse bankruptcy estate resources to the detriment of creditors.
The Court must appoint an independent trustee to manage Debtor’s bankruptcy estate where cause
exists because Debtor’s fraud and dishonesty and because such appointment is in the best interests
of creditors.
CONCLUSION
Debtor’s history of fraud and dishonesty has already shown, on numerous occasions, that
he cannot be trusted in any financial or fiduciary capacity. The Debtor’s creditors should not be
forced to rely on a dishonest fiduciary who has consistently acted only in his self-interest to the
detriment of creditors.
MidCountry urgently requests that this Court enter an order appointing a Chapter 11 trustee
in this case pursuant to 11 U.S.C. § 1104, and that the Court grant such other and further relief as
the Court may deem necessary or appropriate.
Respectfully submitted this 19th day of August, 2025.
RINGENBERG & BELLER, P.C.
By: /s/ Richard D. Beller_______
Richard D. Beller, Atty. Reg. No. 33791
RINGENBERG & BELLER, P.C.
125 S. Howes, Third Floor
Fort Collins, CO 80521
Tel. (970) 482-1056
E-mail: rdb@rb-legal.com
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16
WINTHROP & WEINSTINE, P.A.
/s/ Benjamin M. Podobinski
Andrew J. Steil (#387048 - MN)
asteil@winthrop.com
William J. Schumacher (#0397267 - MN)
wschumacher@winthrop.com
Benjamin M. Podobinski (#0401054 - MN)
bpodobinski@winthrop.com
225 South Sixth Street, Suite 3500
Minneapolis, MN 55402
Telephone: (612) 604-6400
Facsimile (612) 604-6800
Attorneys for Creditor MidCountry Bank
40133795v7
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MidCountry/Freeport
Loan Agreement
Ex. B-1
EXHIBIT B
(Current Rent Roll)
[Attached]
EXHIBIT A
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
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MidCountry/Freeport
Real Estate Note
REAL ESTATE NOTE
$24,240,000.00
Minneapolis, Minnesota
October 21, 2021
1.
FOR VALUE RECEIVED, FREEPORT ELK RIVER LLC, a Minnesota limited liability
company (the “Borrower”), hereby promises to pay to the order of MIDCOUNTRY BANK, a
federal savings bank organized under the laws of the United States of America, its successors
and assigns (the “Lender”), at its banking house located in Minneapolis, Minnesota, the principal
sum of TWENTY-FOUR MILLION TWO HUNDRED FORTY THOUSAND AND 00/100
DOLLARS ($24,240,000.00), which amount has been advanced to or for the benefit of the
Borrower pursuant to that certain Loan Agreement of even date herewith by and between the
Borrower and the Lender (as the same may be amended, restated, renewed or supplemented from
time to time, the “Loan Agreement”), in lawful money of the United States and immediately
available funds, together with interest on the unpaid balance accruing as of the date hereof at a
rate initially equal to three and forty-five hundredths percent (3.45%) per annum (the “Initial
Rate”).
2.
Principal and accrued interest on this Note shall be initially be due and payable in equal
consecutive monthly installments of $121,353.55 each on the twenty-fifth (25th) day of each
calendar month, commencing on November 25, 2021, and continuing on the twenty-fifth (25th)
day of each calendar month thereafter through and including October 21, 2026 (the “Reprice
Date” or the “Initial Maturity Date”). Said monthly installments are calculated based on an
amount necessary to fully amortize the outstanding principal balance of this Note and accrued
interest hereon at the Initial Rate in equal monthly installments by the twenty-five (25) year
anniversary of the date hereof (the “Amortization Date”).
3.
If this Note has not been duly extended as set forth in Paragraph 4 hereof, this Note shall
mature and the full amount of principal and accrued interest on this Note shall be due and
payable on the Initial Maturity Date.
4.
So long as (a) no Event of Default, or event which with the giving of notice or the
passage of time or both would constitute an Event of Default, has occurred and is continuing, (b)
the Borrower has paid to the Lender of a non-refundable extension fee equal to $60,600, (c) at
least 90% of the net rentable square feet in the Project is leased with Tenants under arms’ length,
market rate Leases, with minimum Net Operating Income (as provided for in the required
appraisal set forth herein) sufficient to provide for a minimum Debt Service Coverage Ratio of
1.20 to 1.00 based on the adjusted debt service payments set forth in Paragraph 6 hereof, (d) the
Lender has received and approved a current appraisal of the Project which provides for a loan-to-
value percentage of not greater than 75%, (e) the Anchor Lease has been extended on terms and
conditions acceptable to the Lender in its discretion which must include, without limitation, a
minimum term of five (5) additional years at a minimum annual rental rate no less than the in-
place rental rate, and (f) there has been no material adverse change in the financial condition of
the Project, the Borrower or any Guarantor, then the Borrower may extend the Initial Maturity
Date to October 21, 2031 (the “Extended Maturity Date”) upon providing a written extension
request to Lender (the ‘Extension Request”) at least fifteen (15) but not more than thirty (30)
days prior to the Initial Maturity Date.
EXHIBIT B
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
ny (the Borrower ), hereby promises to pay t
y o the order of MIDCOUNTRY BA
savings bank organized un
unde
der ththe lalaws
ws of
of ththe Un
Unitited
ed St
S ates of America, its succ
signs (the “Lender”), at its ban
ankiking
ng hou
ouse
se loc
ocatated
ed in Mi
Minn
nneapolis, Minnesota, the pr
f TWENTY-FOUR MILLION TWO HUNDRED FORTY THOUSAND AND
ARS ($24,240,000.00), which am
amou
ount has been
en ad
adva
vanced to or for the benefit
wer pursuant to that certain Lo
Loan
an Ag
Agreem
emen
ent of
of ev
even
en da
datete herewith by a
y
nd betwe
wer and the Lender (as the sam
ame ma
may be e am
amen
ended, res
estated, renewed or supplemente
y
o time, the “Loan Agreem
emen
ent”t”),), in lawf
wfulul money o
y
f the United States and imme
ble funds, together with interest on the unpaid ba
balance accruing as of the date here
itially e
y
qual to three and forty-five hundredths percent (3.45%) per annum (the “
Principal and accrued interestst on ththis Note h
sh lall be ininiti ially b
y e due and payable in
utive monthly i
y nstallments of
of $12
121,1,35
353.55
55 ea
each
ch on
on ththe twenty-fifth (25th) day o
y
ar month, commencing on
on November 25, 2021, and continuing on the twenty-fifth
each calendar month thereafter through and including October 21, 2026 (the “R
or the “Initial Maturity D
y
ate”). Said monthly i
y nstallments are calculated based
t necessary t
y o fully a
y mortize the outstanding principal balance of this Note and a
t herereon
on at ththe In
Inititiaial Ra
Ratete inin eq
equa
ual mo
montnthlhly i
y ns
nstallllme
mentnts s by
by t
y he
he tw
twen
entyty-five (25
rsary of f ththe e date hereo
eof f (t(the
he “Am
Amor
ortit zation
on Datate”
e”)
y
.
If this No
N te has not been duly e
y xtende
d d as set fo trth in Paragraph 4 he
h reof, hthis Not
and the full amount of principal and accrued interest on this Note shall be du
e on n ththe In
Inititiaial l Ma
Matuturirityty Datate.e.
y
So long as (a) no Event of Default, or event which with the gig viving of notice
e of time or both wou
o ld constitute an Event of Defaulu t, has occur
u red and is continui
rrrrow
owerer has pa
paidid toto the Lend
nderer of
of a a non-
n-rer fu
fund
ndab
ablele ex
extetensioion fefee equal toto $60
60,6,600
00
0% of the net rentable square feet in the Project is leased with Tenants under arms’
rate Leases, with minimum Net Operating Income (as provided for in the re
sal set t fortrth he
hereini ) su
sufffficicient to provide fo
f r r a mi
mininimu
mum De
Debtbt Se
Serv
rvice Co
Coverarage R
1.00 based on
on the adjusted debtbt se
s rvice pa
payme
ments
y
set fo
forth in Paragraph 6 hereof,
r has rec ieive
ved an
a d appr
prov
oved a cur
urrerent appraraisalal of ththe Project which providides for a lo
percentage of not greater ththan 75%, (e) ) the Anch
chor Leas
a e has be
been extended on term
ons acce tpt b
able to ththe Le
L nd
nder in its didiscretition which mustst ininclclude withthout lil mita
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MidCountry/Freeport
Real Estate Note
- 2 -
5.
If this Note has been duly extended, then effective on the Reprice Date, the rate of
interest on this Note shall be adjusted to be equal to two and one half percent (2.50%) per annum
in excess of the 5-year Federal Home Loan Bank Rate then in effect or such equivalent rate as is
selected by the Lender (the “Adjusted Rate”).
6.
If this Note has been duly extended, then the amount of each installment due hereunder
shall then be adjusted on the Reprice Date to be equal to the amount necessary to fully amortize
the then outstanding principal balance hereunder and accrued interest hereon at the Adjusted
Rate in equal consecutive monthly installments by the Amortization Date (the “Adjusted P&I
Installments”). The Adjusted P&I Installments shall be due and payable monthly, each on the
twenty-fifth (25th) day of each calendar month, commencing on November 25, 2026, and shall
continue on the twenty-fifth (25th) day or each calendar month thereafter, with the full amount of
principal and accrued interest on this Note due and payable on the Extended Maturity Date.
7.
In all cases hereunder, interest on this Note shall be calculated on the basis of a year of
three hundred sixty (360) days but charged on the basis of the actual number of days principal is
unpaid.
8.
The Borrower may prepay this Note at any time, in whole or in part. In connection with
any prepayment of this Note, the Borrower shall be required to pay the Lender on the date of
such prepayment a prepayment fee (the “Prepayment Fee”) equal to (i) three percent (3.00%) of
the principal amount repaid from the date hereof until the 2-year anniversary of the date hereof,
(ii) two percent (2.00%) of the principal amount repaid from the 2-year anniversary of the date
hereof until the 4-year anniversary of the date hereof, and (iii) one percent (1.00%) of the
principal amount repaid from the 4-year anniversary of the date hereof until the Initial Maturity
Date. If this Note is duly extended, then in connection with any prepayment of this Note, the
Borrower shall be required to pay the Lender on the date of such prepayment a Prepayment
Fee equal to (i) three percent (3.00%) of the principal amount repaid from the Initial Maturity
Date until the 2-year anniversary of the Initial Maturity Date, (ii) two percent (2.00%) of the
principal amount repaid from the 2-year anniversary of the Initial Maturity Date until the 4-year
anniversary of the Initial Maturity Date, and (iii) one percent (1.00%) of the principal amount
repaid from the 4-year anniversary of the date hereof until the Extended Maturity Date. If the
Borrower fails to pay any Prepayment Fee when due, the amount of such Prepayment Fee shall
thereafter bear interest until paid at the Default Rate defined herein (computed on the basis of a
360-day year, actual days elapsed). Any prepayment of principal shall be accompanied by a
payment of interest accrued to date thereon; and said prepayment shall be applied to the principal
installments in the inverse order of their maturities. Notwithstanding the foregoing, no
Prepayment Fee shall be payable as a result of the sale of the Project to an arms-length, non-
affiliated purchaser or of the Lender refinances the Project in its sole and absolute discretion.
9.
If any installment of principal or interest on this Note, including the installment due and
payable on the Initial Maturity Date or the Extended Maturity Date, as the case may be, is not
paid within ten (10) days of the due date thereof, the Borrower shall pay to the Lender a late
charge equal to five percent (5.00%) of the amount of such installment.
EXHIBIT B
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
hen be adjusted on the Reprice Date to be equal to the amount necessary t
y o fully am
en outstanding principal ba
balance hereunder and accrued interest hereon at the Ad
n equal consecutive monthlhly i
y ns
nstatallllme tnts by
by t
y he
he Am
Amor
ortitization Date (the “Adjuste
ments”). The Adjusted P&I Installments shall be due and payable monthly, each
-fifth (25th) day o
y
f each calelend
ndarar mo
month, comm
mmen
encicing
ng on November 25, 2026, an
ue on the twenty-fifth (25th) da
day or ea
each
ch calalenda
dar montnth h ththereaftfter, with the full amo
y
pal and accrued interest on thisi Note due and
nd payable on the Extended Maturity Date
y
In all cases hereunder, interest on this No
Note shall be calculated on the basis of a y
undred sixty (
y 360) days but charged on the basis of the actual number of days princ
.
The Borrower may p
y repay ththis Note tat any titime, in wh
whole or in part. In connectio
epayment
y
of this Note, the Bo
Borrrrow
owerer sh
shalall be
be rerequ
quirired
ed to pay t
y he Lender on the d
repayment
y
a prepayment
y
fefee (t( he “Prepa
p yment
y
Fee”) equa
ual to (i) three percent (3.0
ncipal amount repaid from the date hereof until the 2-ye
y ar anniversary o
y f the date h
o percent (2.00%) of the principal amount repaid from the 2-year anniversary o
y
f th
until the 4-year anniversary o
y
f the date hereof,f and (iii) one percent (1.00%)
pal am
amou
ount repa
paidid frf om
om the 4-
4-ye
yeara an
anninive
versrsary o
y f ththe da
date he
hereof
of un
untitil ththe Initial M
If thisis No
Notete is du
duly e
y xtxten
ended,d ththen
en in co
connectit on wi
w th any prepaymentn of
of this No
wer shall
e
be required to pay t
y he Lende
der on
on ththe da
datete of
o su
such prep
epay
ayme
m ntnt a a Prepa
ual to (i) three percent (3.00%) of the principal amount repaid from the Initial M
ntil the 2-year anniversary o
y
f the Initial Maturity D
y
ate, (ii) two percent (2.00%)
pal am
amou
ountnt rerepa
paid frfrom
om ththe 2-
2-ye
year an
anninive
versarary o
y f f ththe In
Inititiaial Maturirityty D
y
ate un
untitil the
rsary o
y
f the Initial Maturity D
y
ata e, and (iii)i) one percrcent (1.00%) of the principal a
from the 4-year anniversary o
y
f the date hereof until the Extend
nded Maturity D
y
ate.
werer fails to pay a
y ny P
y
repaymentnt
y
Fee when due, the amount of such Prep
e ayment Fe
Fe
fterer be
bear intererestst un
until pa
paidid atat ththe Defafaulult t Ratete de
defifine
ned d he
herereinin (c(com
o pu
puteted d on
on ththe ba
bas
y y
y
ear, actual days elapsed). Any prepayment of principal shall be accompanie
nt of interest accrued to date thereon
o ; and said prepa
p yment shall be applp ied to th
y
e pr
ments in ththe inverse orde
d r of their ma
maturirities.
No
Notw
twiths
hstatanding the foregoin
ment Fee sh
shalall be pay
ayab
able as a a result of the sa
sale of the Projec
ect to an
an ararms-length
ed purchaserer or of the Le
Lend
n er refefininan
a ces the Pr
Projo ect in its sole and
n absolute discretio
If
i
t ll
t
f
i
i
l
i t
t
thi N t
i
l di
hth i
t ll
t d
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MidCountry/Freeport
Real Estate Note
- 3 -
10.
Notwithstanding anything to the contrary contained herein, at all times after an Event of
Default has occurred and is continuing, interest shall accrue on amounts outstanding hereunder at
a rate equal to five percent (5.00%) per annum in excess of the rate otherwise payable hereunder.
11.
All payments and prepayments shall, at the option of the Lender, be applied first to any
costs of collection, second to any late charges, third to accrued interest on this Note, fourth to
any Prepayment Fee and lastly to principal.
12.
Notwithstanding anything to the contrary contained herein, if the rate of interest, late
payment fee or any other charges or fees due hereunder are determined by a court of competent
jurisdiction to be usurious, then said interest rate, fees and/or charges shall be reduced to the
maximum amount permissible under applicable Minnesota law.
13.
This Note is issued pursuant to the terms of the Loan Agreement, is secured by the
Mortgage and is guaranteed by the Guarantors pursuant to the Guaranties, and the Lender is
entitled to all of the benefits provided for in said documents.
14.
Unless otherwise defined herein, capitalized terms used herein shall have the meanings
assigned thereto in the Loan Agreement.
15.
Upon the occurrence of an Event of Default or at any time thereafter, the outstanding
principal balance hereof and accrued interest and all other amounts due hereon shall, at the
option of the Lender, become immediately due and payable, without notice or demand.
16.
Upon the occurrence of an Event of Default or any time thereafter, the Lender shall have
the right to set off any and all amounts due hereunder by the Borrower to the Lender against any
indebtedness or obligation of the Lender to the Borrower.
17.
Upon the occurrence of an Event of Default or at any time thereafter, the Borrower
promises to pay all costs of collection of this Note, including but not limited to attorneys’ fees,
paid or incurred by the Lender on account of such collection, whether or not suit is filed with
respect thereto and whether such cost or expense is paid or incurred, or to be paid or incurred,
prior to or after the entry of judgment.
18.
Demand, presentment, protest and notice of nonpayment and dishonor of this Note are
hereby waived.
19.
This Note shall be governed by and construed in accordance with the laws of the State of
Minnesota without giving effect to the choice of law provisions thereof.
20.
The Borrower hereby irrevocably submits to the jurisdiction of any Minnesota o state
court or federal court over any action or proceeding arising out of or relating to this Note, the
Loan Agreement, the Mortgage and any instrument, agreement or document related thereto, and
the Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding
may be heard and determined in such Minnesota state or federal court. The Borrower hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The Borrower agrees that judgment final
EXHIBIT B
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
epayment Fee
y
and lastly to principal.
y
Notwithstanding anything toto ththe co
contntrarary
ry c
y
on
ontatainined
ed he
herein, if the rate of intere
nt fee or any other charges or fees due hereunder are de
determined by a
y
c
a ourt of com
ction to be usurious, then saidid inintetererest rate, fees
es an
and/d/or
o charges shall be reduced
um amount permissible und
nderer app
pplilica
cablble Mi
Minnes
esotota lalaw.
w
This Note is issued pursua
u ntnt to the term
rms of the Loan
an Agreement, is secured
age and is guaranteed by t
y he Gu
G arantors pu
pursua
uant tot the Guaranties, and the Len
d to all of the benefits provided for in said documents.
Unless otherwise defined herein, capipitalil zed terms used herein shall have the me
ed thereto in the Loan Agreeme
mentnt.
Upon the occurrence of an Event of Default or at any time thereafter, the outst
pal balance hereof and accrued interest and lall other amounts due hereon shall,
of the Lender, become imm d
ediately due a d
nd pay
y
b
able, i
wi hthout notice or demand.
Upon
on the oc
occu
currrren
ence
ce of
o an
an Ev
Even
e t t of
of De
Defafaulu t or
or an
any t
y ime ththerea
eaftfterer, tht e Le
L nder sha
ht to se
set t off f any a
y nd alall am
amountnts du
due herereun
unde
der r by
by t
y he
he Borrow
ower to the Le
Lender again
ednessss or ob
obligation of ththe Lend
n erer to the Bo
B rrrrow
owerer.
Upon the occurrence of an Event of Default or at any time thereafter, the Bo
es to pa
p y a
y ll costs of collection of this Note, including but not limi
m ted to attorneys
r incurred by
b
t
y he Lender on ac
acco
count of such
ch collec
ectit on, whether or not suit is file
t thereto and whethe
her such cost or expense is paid or
o incurred, or
or to be paid or in
o or after the entry of judgment.
y
De
D mand, presentment, pr totest and d notitice of nonpay
a me tnt
y
and dishonor f
of ththis N
waived.
This Note shala l be governed by a
y nd
nd constrtrue
ued d in accord
rdance with the laws of the S
sota withou
out t giving effffec
ect to the choicice of law pro
roviv sions thereof.
The Borrrrow
owerer hereby
b
i
y rrev
evoc
ocably y subm
bmitits s to ththe juririsd
sdici tion
on of any y Minnes
e ota
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MidCountry/Freeport
Real Estate Note
- 4 -
by appeal, or expiration of time to appeal without an appeal being taken, in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Paragraph shall affect the
right of the Lender to serve legal process in any other manner permitted by law or affect the right
of the Lender to bring any action or proceeding against the Borrower or its property in the courts
of any other jurisdiction to the extent permitted by law.
15357-206
22548767v4
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EXHIBIT B
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
6
v4
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THI
I
S PA
PAGE
GE IS INT
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ENTI
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ONALLY
I
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EXHIBIT B
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
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MidCountry/Freeport
Guaranty – Freeport
PERSONAL GUARANTY
BY
BRENT HERRON
TO
MIDCOUNTRY BANK
Dated: October 21, 2021
This instrument was drafted by:
WINTHROP & WEINSTINE, P.A.
Suite 3500
225 South Sixth Street
Minneapolis, MN 55402
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
PE
PERSON
ONAL
AL GUARA
RANT
NTY
BY
BY
BREN
ENT HE
HERR
RRON
ON
TO
TO
MI
MIDC
DCOU
OUNT
NTRY
RY BAN
ANK
Da
Datet d:d: Octotobe
ber 21
21, , 20
2021
21
Thisis ins
nstrum
umen
ent t wa
was dr
drafaftet d d by
by:
WI
WINT
NTHROP & WEINS
NSTI
TINE
NE, P.A.
I
Suiti e 3500
0
225 South Si
Sixtxth St
Streetet
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MidCountry/Freeport
Guaranty – Freeport
PERSONAL GUARANTY
In consideration of and in order to induce MidCountry Bank, a federal savings bank organized
under the laws of the United States of America with its banking house located in Bloomington,
Minnesota (the “Lender”), to extend financial accommodations to Freeport Elk River LLC, a
Minnesota limited liability company (the “Borrower”), pursuant to that certain Loan Agreement
of even date herewith by and between the Lender and the Borrower (as the same may be
amended, restated, renewed or supplemented, the “Loan Agreement”) and as evidenced by that
certain Real Estate Note of even date herewith executed by the Borrower in the original principal
amount of $24,240,000 and payable to the order of the Lender ((as the same may be amended,
restated, renewed or supplemented, the “Note”), the undersigned (the “Guarantor”) hereby:
1.
Unconditionally and absolutely guarantees to the Lender:
(a)
the full and prompt payment, when due, whether at the maturity dates specified
therein or theretofore upon acceleration of maturity pursuant to the provisions thereof, of
principal, accrued interest, prepayment premiums and late charges, if any, on the Note,
and any and all renewals thereof including notes taken in substitution therefor; and
(b)
any and all other liability or indebtedness of the Borrower to the Lender whether
now existing or hereafter arising, joint or joint and several, contingent or direct; and
(c)
the payment and performance by the Borrower of all of its obligations under and
pursuant to the Note, the Loan Agreement and any and all documents related thereto;
(the Note, the Loan Agreement and such other liability, indebtedness and obligations set forth
above are herein collectively referred to as the “Obligations”); together with the full and prompt
payment of any and all costs and expenses of and incidental to the collection of the Obligations
or the enforcement of this Guaranty, including, without limitation, attorneys’ fees.
2.
Agrees that the Lender may demand payment from the Guarantor of any installment (or
portion thereof) of principal or interest on the Note, when due, and the Guarantor shall
immediately pay the same to the Lender, and the Lender may demand payment or performance
of any or all of the other Obligations, when such payment or performance is due or required, and
the Guarantor shall immediately pay or perform the same, whether or not the Lender has (i)
declared an Event of Default, or (ii) accelerated payment of the Note, or (iii) commenced
repossession of, or foreclosure of any security interest, mortgage or other lien in, any or all of the
collateral securing the Note, or (iv) otherwise exercised its rights and remedies hereunder or
under the Note, the documents related thereto or applicable law.
3.
Waives (i) presentment, demand, notice of nonpayment, protest and notice of protest and
dishonor on the Obligations; (ii) notice of acceptance of this Guaranty by the Lender; and (iii)
notice of the creation or incurrence of the Obligations by the Borrower.
4.
Agrees that the Lender may from time to time, without notice to the Guarantor, which
notice is hereby waived by the Guarantor, extend, modify, renew or compromise the Obligations,
in whole or in part, without releasing, extinguishing or affecting in any manner whatsoever the
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
y
(
ed, restated, renewed or supp
ppleleme
mentnted
ed, ththe “Loa
oan Ag
Agrereement”) and as evidenced b
Real Estate Note of even da
d te herewitith ex
exec
ecututed
ed by the Borrower in the original pr
y
t of $24,240,000 and payablele to hthe order f
of ththe Lend
ndere ((as the same may b
y
e am
d, renewed or supplemented, the “Note”)”), ththe undersigigned (the “Guarantor”) hereby
Unconditionally and absolutut lely
y
gua
u rantntees toto t e
he Len
ende
der:
y
(a)
the full and prompt pa
paym
yment, wh
when due, wh
whetether at the maturity d
y
ates sp
therein or theretofore upon acceleration of maturity p
y ursuant to the provisions ther
principal, accrued interest, prepayment premiums and late charges, if any, on the
and any and all renewals therereof inc
ncluding
ng notes taken
en in substitution therefor; and
(b)
any a
y nd all other liab
ability o
y r indebtedness of the Borrower to the Lender w
now existing or hereafter ararisisining, joiointnt or jojoinint an
and se
se e
veraral, contingent or direct; and
(c)
the payment
y
an
and pe
pe
perfrfrfor
or
orma
ma
manc
nc
nce by
by
by t
y he
he
he Bo
Bo
Borrrrrrow
ow
owererer of
of
of alall of its obligations und
pursuant to the Note, the Loan Agreement and any and all documents related theret
ote, ththe Loan
an Agreem
emen
ent and d su
such othe
her liliab
abilility, inde
debted
edne
nessss and obliligations se
are hereinin collectivelyly r
y efefere red toto as
as the “O
“Oblbligigatatioions”); together with ththe fu
full and p
nt of an
any a
y nd
nd alall co
coststs and ex
expe
p nses of an
and incic dentalal toto ththe collllectition
on of the Oblig
enforcement of this Guaranty, including, without limitation, attorneys’ fees.
Agrerees ththatat ththe Le
Lend
nderer ma
may d
y
em
e and d pa
payme
mentnt
y
frfrom
om ththe Gu
Guarantotor r of any y ininststallm
n thereof) of princic pal or inteterests on the Note, when due, an
and d the Gu
Guaranto
iately p
y ay t
y he same to the Lender, and the Lender may d
y emand d pa
payment
y
or perfor
or
or all of the other Ob
O ligations, wh
when such pa
payment or performa
mance isis due or requirire
y
uararan
antotor shalall im
imme
m diatatelely pay
ay o
y
r pe
perfrfor
orm ththe sa
same
me, wh
whetethe
her or
o no
not ththe Le
Lend
nderer
ed an Event of Default, or (ii) accelerated payment
y
of the Note, or (iii) comm
ession
o of, or foreclc os
osur
u e of any sec
ecurity
y
intere est, mor
o tgage e or
or othere lien in, , any
y
or all
y
ral securing ththe No
Note, or (iv) ototherw
r ise ex
e erercised its rirights and remedies hereun
the Note, ththe e documentnts s rerelated d ththere eteto or app
pplica
cablble law.
Waives (i) ) presentment,t dema
mand, no
notice
c of
o nonpay
aymentnt, pr
p otes
est and no
n tice of prote
th Obli
ti
(ii)
ti
f
t
f thi G
t
b
th L
d
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MidCountry/Freeport
Guaranty – Freeport
- 2 -
liability of the Guarantor hereunder, the foregoing acts being hereby consented to by the
Guarantor.
5.
Agrees that the Lender shall not be required to first resort for payment to the Borrower or
any other person, corporation or entity, or their properties or estates, or any other right or remedy
whatsoever, prior to enforcing this Guaranty.
6.
Agrees that this Guaranty shall be construed as a continuing, absolute, and unconditional
guaranty without regard to (i) the validity, regularity or enforceability of the Obligations or the
disaffirmance thereof in any insolvency or bankruptcy proceeding relating to the Borrower, or
(ii) any event or any conduct or action of the Borrower or the Lender or any other party which
might otherwise constitute a legal or equitable discharge of a surety or guarantor but for this
provision.
7.
Agrees that this Guaranty shall remain in full force and effect and be binding upon the
Guarantor until the Obligations are paid in full.
8.
Agrees that the Lender is expressly authorized to forward or deliver any or all collateral
and security which may at any time be placed with it by the Borrower, the Guarantor or any
other person, directly to the Borrower for collection and remittance or for credit, or to collect the
same in any other manner and to renew, extend, compromise, exchange, release, surrender or
modify the installments of, any or all of such collateral and security with or without
consideration and without notice to the Guarantor and without in any manner affecting the
absolute liability of the Guarantor hereunder; and that the liability of the Guarantor hereunder
shall not be affected or impaired by any failure, neglect or omission on the part of the Lender to
realize upon the Obligations, or upon any collateral or security therefor, nor by the taking by the
Lender of any other guaranty or guaranties to secure the Obligations or any other indebtedness of
the Borrower to the Lender, nor by the taking by the Lender of collateral or security of any kind
nor by any act or failure to act whatsoever which, but for this provision, might or could in law or
in equity act to release or reduce the Guarantor’s liability hereunder.
9.
Waives any right that the Guarantor may have to collect or seek to collect from the
Borrower the claim, if any, by subrogation or otherwise, acquired by the Guarantor through
payment of any part or all of the Obligations until the Obligations have been paid in full.
10.
Agrees that the liability of the Guarantor hereunder shall not be affected or impaired by
the existence or creation from time to time, with or without notice to the Guarantor, which notice
is hereby waived, of indebtedness from the Borrower to the Lender in addition to the
indebtedness evidenced by the Note; the creation or existence of such additional indebtedness
being hereby consented to by the Guarantor.
11.
Agrees that the possession of this instrument of guaranty by the Lender shall be
conclusive evidence of due execution and delivery hereof by the Guarantor.
12.
Agrees that this Guaranty shall be binding upon the legal representatives, successors and
assigns of the Guarantor, and shall inure to the benefit of the Lender and its successors, assigns
and legal representatives; that notwithstanding the foregoing, the Guarantor shall have no right to
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
Agrees that this Guarantyty sh
shalall be
be co
cons
nstrtrue
ued as
as a co
contntininuiu ng, absolute, and uncond
ty without regard to (i) ththe va
valilididityty, reregu
gulalarirityty o
y
r en
enfo
forcrceability o
y
f the Obligations
rmance thereof in any i
y nsolvency o
y
r bankruptcy p
y
roceeding relating to the Borrow
y event or any conduct or actition
on of
of tht e Borrowerer or
or ththe Lender or any o
y
ther party
otherwise constitute a lega
gal or
or eq
equiuitat blble didischa
harg
rge of
of a a surety or guarantor but f
on.
Agrees that this Guaranty s
y ha
h llll remain in fu
full fo
force and effect and be binding up
ntor until the Obligations are paid in full.
Agrees that the Lender is expr
pressly a
y uthorized
a
to forward or deliver any or all co
curity w
y
hich may at any time
me be
be plplac
aced
ed wi
withth itit by
by t
y he
he Borrower, the Guarantor
erson, directly to the Borrowe
wer fo
for co
collllec
ectition
on and
nd rem
emitittance or for credit, or to coll
n any other manner and to renew, extend, compromise, exchange, release, surren
y t
y
he installments of, any o
y
r all of such collateral and security w
y
ith or w
eration and without notice to the Guarantor and without in any manner affecti
te liability o
y
f the Guarantor hereunder; and that the liability o
y
f the Guarantor her
ot be afaffected
ed or
or im
impa
pairired by
by a
y ny
n f
y aiailulure,
f
ne
neglglec
ect t or
o om
omisissision
o on
on ththe pa
partrt of the Len
upon ththe Obligations,s, or up
u on
on an
any y collatatere al or
o se
secu
curity t
y herefor, nor by
by t
y he taking
r of any otht er guarantnty
y
or r guararantities
es to secu
curere the O
y
blbligigations
ns or any otother r indebtedn
rrower to the Lender, nor by t
y he taking by hthe Lender of collater lal or secu irity of an
any act or failure to act whatsoever which, but for this provision, might or could in
ty actct to o r
y
elelea
ease
se or r reredu
duce
ce the
he Guarantntor
or’s liabibililityty here eu
eund
ndere .
y
Waives any r
y ight that the Guarantor may h
y
ave to collect or seek to collect fro
wer the claim, if any, by s
y
ubrogation or otherwise,e, acquired by t
y he
he Guarantor thth
ntnt of f an
any parart t or
or allll
y
of the Oblbligigatations untntil the
he Oblbligigatioions hav
ave been
en paiaid in fulull.
Agrees that the liability o
y
f the Guarantor hereunder shall not be affected or impai
stenc
nce e or
or crereata ion n frfrom
om tim
ime to tim
ime,e with h or witho
houtut nototicice toto the
he Guarantntor, wh
w ich
eby waived, of indebtbtedness frfrom the Bo
Borrrrower to the Le
Lender in addition
edness ev
evididen
ence
c d by t
y he
he Note; ththe crcreation
o or ex
existence of such addiditition
onal indebt
hereby consented to by the Gua
uarantor.
y
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MidCountry/Freeport
Guaranty – Freeport
- 3 -
assign or otherwise transfer the Guarantor’s rights and obligations under this Guaranty to any
third party without the prior written consent of the Lender; and that any such assignment or
transfer shall not release or affect the liability of the Guarantor hereunder in any manner
whatsoever.
13.
Agrees that the Guarantor may be joined in any action or proceeding commenced against
the Borrower in connection with or based upon the Obligations and recovery may be had against
the Guarantor in any such action or proceeding or in any independent action or proceeding
against him should the Borrower fail to duly and punctually pay any of the principal of or
interest on the Obligations without any requirement that the Lender first assert, prosecute or
exhaust any remedy or claim against the Borrower.
14.
Agrees that upon the occurrence at any time of an Event of Default, the Lender shall have
the right to set off any and all amounts due hereunder by the Guarantor to the Lender against any
indebtedness or obligation of the Lender to the Guarantor.
15.
Agrees that the Guarantor shall be liable to the Lender for any deficiency remaining after
foreclosure of any mortgage in real estate or any security interest in personal property granted by
the Borrower, the Guarantor or any third party to the Lender to secure repayment of the
Obligations and the subsequent sale by the Lender of the property subject thereto to a third party
(whether at a foreclosure sale or at a sale thereafter by the Lender in the event the Lender
purchases said property at the foreclosure sale) notwithstanding any provision of applicable law
which may prevent the Lender from obtaining a deficiency judgment against, or otherwise
collecting a deficiency from, the Borrower, including, without limitation, Minnesota Statutes
582.30.
16.
Agrees that this Guaranty shall be deemed a contract made under and pursuant to the
laws of the State of Minnesota and shall be governed by and construed under the laws of such
state without giving effect to the choice of law provisions thereof; and that, wherever possible,
each provision of this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining provisions of the
Guaranty.
17.
Agrees that no failure on the part of the Lender to exercise, and no delay in exercising,
any right or remedy hereunder shall operate as or constitute a waiver thereof; nor shall any single
or partial exercise of any right or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right or remedy granted hereby or by any related document or
by law.
18.
Waives any and all claims against the Lender and defenses to performance and payment
hereunder relating in any way, directly or indirectly, to the performance of the Lender’s
obligations or exercise of any of its rights under the Note and the documents related thereto.
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
rrower in connection with or based upon the Obligations and recovery m
y
ay be had
y
a
uarantor in any such action
on or proceediding or in any i
y nd
ndependent action or proc
t him should the Borrowerer fafailil toto dulyly a
y
d
nd pun
unctctua
ualllly p
y
ay a
y
ny o
y
f the principal
t on the Obligations without any r
y equirement that the Lender first assert, prosec
t any remedy
y
or claim agains
nst ththe Bo
Borrr ower.
y
Agrees that upon the occurrenc
nce e at any time of an Ev
Event of
of Default, the
y
Lender sha
ht to set off any a
y nd all amoun
u tsts due hereu
eund
nder by the
he Guarantor to the Lender again
y
edness or obligation of the Lender to the Gu
Guarantor.
Agrees that the Guarantor shall be liable to the Lender for any deficiency remain
y
in
osure of any mortgage in real estatete or r any
y
secur
urit
y
y y inteterest in personal property gran
y
orrower, the Guarantor or any ththird pa trty t
y o ththe Le
Lender to secure repayment
y
tions and the subsequent sale by
by t
y he
he Len
ende
der of
of ththe pro
rope
perty subject thereto to a third
er at a foreclosure sale or at a sale thereafter by t
y he Lender in the event the L
ses said property at the foreclosure sale) notwithstanding g any y provision of applicab
may p
y
revent the Lender from obtaining a deficiency j
y udgment against, or oth
ing a deficiency f
y rom,
f
the Borrower, including, without limitation, Minnesota S
.
Agrees ththat this Guaran
antyty shall be
be deem
emed
ed a a contntraract ma
made und
nder an
a d pu
pursuant
f the State
f
of Mi
Minnesota an
a d d h
shall be govern d
ed by
b
a
y nd construed under the lal ws o
without giving effect to the choice of law provisions thereof; and that, wherever po
rovisisioion n of
of ththisis Gu
Guararan
anty sh
shalall be ininteterp
rprer ted d inin su
such
ch ma
mann
nner as toto be effefectctivive an
applicable law, but if any p
y
rovivisis on of this Guaran
anty shall be pr
p ohibited by o
y
r
applicable law, such provision shall be ineffective only to the
y
extet nt of such prohibi
ityty without
y
invalidating the remainder of su
such provisis on or the rer maini ining provisions
ns
nty.y.
Agrees that no failure on the part of the Lender to exercise, and no delay i
y n exer
ht or reme
medy
dy hereu
e nd
nderer sha
h ll ope
peratet as or
or con
onstititutute a wa
waiverer the
herereof; nor r shall any
y
tial exercise of any r
y igight or reme
m dy h
y
ereu
eundere pr
p ec
eclude any y other or further ex
f or the exercrcisise of any
ny otht er rigightht or remedy
y
grar ntnted
e hereby
y
or by
b
y
any
y
r lelata ed docum
y
.
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Guaranty – Freeport
- 4 -
19.
Warrants and represents to the Lender as follows:
(a)
Enforceability. This Guaranty constitutes the legal, valid and binding obligation
of the Guarantor enforceable in accordance with its terms (subject, as to enforceability, to
limitations resulting from bankruptcy, insolvency or other similar laws affecting
creditors’ rights generally).
(b)
Litigation. There is no action, suit or proceeding pending or, to the knowledge of
the Guarantor, threatened against or affecting the Guarantor which, if adversely
determined, would have a material adverse effect on the condition (financial or
otherwise), properties or assets of the Guarantor, or which would question the validity of
this Guaranty or any instrument, document or other agreement related hereto or required
hereby, or impair the ability of the Guarantor to perform the Guarantor’s obligations
hereunder or thereunder.
(c)
Default. The Guarantor is not in default of a material provision under any
agreement, instrument, decree or order to which the Guarantor is a party or by which the
Guarantor or the Guarantor’s property is bound or affected.
(d)
Consents. To the Guarantor’s knowledge, no consent, approval, order or
authorization of, or registration, declaration or filing with, or notice to, any governmental
authority or any third party is required in connection with the execution and delivery of
this Guaranty or any of the agreements or instruments herein mentioned to which the
Guarantor is a party or the carrying out or performance of any of the transactions required
or contemplated hereby or thereby or, if required, such consent, approval, order or
authorization has been obtained or such registration, declaration or filing has been
accomplished or such notice has been given prior to the date hereof.
(e)
Taxes. The Guarantor has filed all tax returns required to be filed and has paid all
taxes shown thereon to be due, including interest and penalties, which are not being
contested in good faith and by appropriate proceedings and has no information or
knowledge of any objections to or claims for additional taxes in respect of federal income
or excess profits tax returns for prior years.
(f)
Financial Condition. The financial statements of the Guarantor furnished to the
Lender are complete and correct in all respects and fairly present the financial condition
of the Guarantor at the dates of such statements, and have been prepared in accordance
with generally accepted accounting principles, consistently applied. Since the most recent
set of financial statements delivered by the Guarantor to the Lender, there have been no
material adverse changes in the financial condition of the Guarantor.
(g)
Residence, Etc.. The Guarantor is an individual person who is a citizen of the
United States of America and a citizen and resident of the State of Colorado, who is
under no legal disability. The obligations of the Guarantor under this Guaranty are or will
be incurred in the interest of the marriage and family of the Guarantor.
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
(b)
Litigation. There isis no
no ac
actition
on, su
suitit or
or pr
proc
ocee
eediding
ng pending or, to the knowle
the Guarantor, threatened
ed ag
agaiains
nst or
or afaffefectctining ththe Gu
Guarantor which, if adv
determined, would have a material adverse effect on the condition (financ
otherwise), properties or asse
setsts of
of ththe Guarantotor, or
or wh
which would question the vali
this Guaranty or any instru
rume
mentnt, do
docu
cumentnt or otothe
her ag
agreement related hereto or re
hereby, or impair the ab
ability o
y
f the Gu
Guararantor to pe
perform the Guarantor’s oblig
hereunder or thereunder.
(c)
Default. The Guarantor is not in default of a material provision und
agreement, instrument, decree or r
order to wh
which the Guarantor is a party or by w
y
h
Guarantor or the Guarantor’s pr
prop
opertyty is bo
boun
und or
or affffected.
y
(d)
Consents. To the Gu
Guararan
antotor’r s kn
know
owleledg
dge, no consent, approval, or
authorization of, or registration, declaration or filing with, or notice to, any govern
authority o
y
r any third party i
y s required in connection with the execution and deliv
this Guaranty or any of the agreements or instruments herein mentioned to whi
Guarantor is a party or the carrying out or performance of any of the transactions re
y
or co
c ntn emplplatated
ed he
hereby y or
or ththereb
eby or, ifif rerequiuired,d, su
such
ch co
cons
n en
ent,t, ap
approval, or
author
orizizatatioi n has be
been
en ob
o tainined
ed or su
such
ch reregigiststraration, declclaration or
or fifiling ha
accomp
mplilished or such
c noto ici e has be
been given
en prir or to ththe e datete hereo
eof.
(e)
Taxes. The Guarantor has filed all tax returns required to be filed and has p
taxe
xes sh
show
own tht erereo
eon toto be
be du
d e, ininclclud
uding inintetererest an
and pe
p nalties,s which arare not
contested in good faith and d by
by a
y
ppropr
priaiate
a
proc
oceedings and d ha
has no informat
knowledge of any objections to or claims
ms for additional taxes in r
y
espe
pect of federal i
or excess profits tax returns for prior years.s
(f)
Financial Condition. The financial statements of the Guarantor furnished
Lender are complete and correct in all respects and fairly present the financial con
of ththe Gu
Guararan
antor r atat ththe da
d tes of
of su
such ststatatementsts, an
and d ha
have
ve be
been
en pr
p ep
epared
ed inin acco
with generallyly a
y ccepted accountiting
ng principiplel s,s, consistently applied. Since the most
y
set of fifina
nanc
nciaial statem
ements delilive
vered d by t
y he Gu
G araran
a tor to the Lender, ththere e have b
material adverse changes in ththe fina
nancial condititioi n of the
he Guararantor.
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Guaranty – Freeport
- 5 -
20.
Agrees that the liability of the Guarantor and any other guarantor of the Obligations shall
be joint and several.
21.
Agrees to deliver to the Lender the financial information and documentation required
under the Loan Agreement for the Guarantor.
22.
Agrees that (i) the Guarantor will indirectly benefit by and from the making of the loan
by the Lender to the Borrower evidenced by the Note; (ii) the Guarantor has received legal and
adequate consideration for the execution of this Guaranty and has executed and delivered this
Guaranty to the Lender in good faith in exchange for reasonably equivalent value; (iii) the
Guarantor is not presently insolvent and will not be rendered insolvent by virtue of the execution
and delivery of this Guaranty; (iv) the Guarantor has not executed or delivered this Guaranty
with actual intent to hinder, delay or defraud the Guarantor’s creditors; and (v) the Lender has
agreed to make such loan in reliance upon this Guaranty.
23.
Agrees that if, at any time, all or any part of any payment previously applied by the
Lender to any of the Obligations must be returned by the Lender for any reason, whether by
court order, administrative order or settlement, the Guarantor shall remain liable for the full
amount returned as if said amount had never been received by the Lender, notwithstanding any
term of this Guaranty or the cancellation or return of any note or other agreement evidencing the
Obligations.
24.
Irrevocably submits to the jurisdiction of any Minnesota state court or federal court over
any action or proceeding arising out of or relating to this Guaranty, the Note and any instrument,
agreement or document related thereto (collectively, the “Loan Documents”); agrees that all
claims in respect of such action or proceeding may be heard and determined in such Minnesota
state or federal court; irrevocably waives, to the fullest extent he may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding; irrevocably
consents to the service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding by the mailing by United States certified mail,
return receipt requested, of copies of such process to the Guarantor’s last known address; and
agrees that judgment final by appeal, or expiration of time to appeal without an appeal being
taken, in any such action or proceeding shall be conclusive and may be enforced in any other
jurisdictions by suit on the judgment or in any other manner provided by law; provided that
nothing in this paragraph shall affect the right of the Lender to serve legal process in any other
manner permitted by law or affect the right of Lender to bring any action or proceeding against
either Guarantor or his property in the courts of any other jurisdiction to the extent permitted by
law.
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
Agrees that (i) the Guarantor will indirectly b
y
enefit by a
y nd from the making of th
Lender to the Borrower evididen
enced
ed by
by t
y he
he No
Notete; (i(ii)i) ththe Gu
Guarantor has received leg
ate consideration for the exec
ecututioion of
of ththisis Gu
Guararan
anty y an
and has executed and deliver
nty to the Lender in good faith in exchange for reasonably e
y
quivalent value; (i
ntor is not presently i
y nsolventnt and
nd wilill not be ren
ende
derered ini solvent by v
y irtue of the exe
livery o
y
f this Guaranty; (i(iv)
v) ththe Gu
Guaran
antor ha
has no
not ex
executed or delivered this Gu
ctual intent to hinder, delay o
y
r de
d fraud d ththe Guarantotor’s creditors; and (v) the Lend
to make such loan in reliance
c upon this Gua
u ranty.
Agrees that if, at any time, all or any p
y
art of any p
y
ayment
y
previously a
y
pplied
a
r to any of the Obligations must be
be returned by t
y he Lender for any r
y eason, whet
order, administrative order or settttleme
ment, hthe
u
Guaran
antor shall remain liable for t
t returned as if said amount ha
had never been receiv d
ed by
b
t
y he Lender, notwithstandi
f this Guaranty or
y
t
r he cancellalatition
on or
or reretuturn
rn of
of an
any n
y otote or other agreement evidenc
tions.
Irrevocably submits to the jurisdiction of any Minnesota state court or federal cou
tion or proceeding arising out of or relating to this Guaranty, the Note and any instr
y
ment or
o docume
mentnt rerelalatet d d ththere ete o (c(colollelectctivively, ththe “L
“Loa
oan n Do
Docu
cume
mentn s”);); agrees t
in resp
spect t of
of such ac
actition
on or pr
proc
ocee
eeding
ng ma
m y be
be he
hearard d and determ
rmined
ed inin such Min
r fede
deral court; irrevo
v cablbly wa
w ivives, to the fu
fullest ex
extent he
he may e
y
ffffec itive
vely do
e of an ini convenient forum to the maintenance of such action or proceediding; irrev
ts to the service of copies of the summons and complaint and any o
y
ther process
e serv
rved
ed inin an
any s
y uc
uch ac
actition
on or
or pr
p ocee
eediding
n by
by t
y he
he ma
mailining by
b
U
y
niteted States
es ce
certr ified
receipt requested, of
o copies of
of su
such process to the Guarantor’s lal stst known addres
that judgment final by a
y
ppeal,
a
or expiration of time to appealal without an appeal
in any such action or proceeding
ng shall be conclusive
v and may b
y
e enfo
f rced in any
ctition
ons by s
y uiuit on
on ththe jujudg
dgme
mentnt or inin an
any otothe
her ma
mann
nnerer pr
prov
ovidided by
by l
y aw
aw; pr
prov
ovidide
g in this paragraph shall affect the right of the Lender to serve legal process in any
r permitted by l
y aw or affect the righ
g t of Lender to bring any y action or proceeding a
Guarantor or
o hih s propererty y in the courts of
of any o
y therer jujuririsd
sdiction
on to the extetent permi
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Guaranty – Freeport
- 6 -
25.
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR PERTAINING TO THIS GUARANTY OR THE OTHER
LOAN DOCUMENTS.
Dated as of this 21st day of October, 2021.
15357-206
22548825v1
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
6
v1
[REMAINDER OF
F PA
PAGE
GE INTENTION
ONAL
ALLY
L
I
LEFT BLANK]
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EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
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MidCountry/Freeport
Guaranty – Freeport
PERSONAL GUARANTY
BY
MICHELLE HERRON
TO
MIDCOUNTRY BANK
Dated: October 21, 2021
This instrument was drafted by:
WINTHROP & WEINSTINE, P.A.
Suite 3500
225 South Sixth Street
Minneapolis, MN 55402
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
PE
PERSON
ONAL
AL GUARA
RANT
NTY
BY
BY
MICH
CHEL
ELLE HERR
RRON
TO
TO
MI
MIDC
DCOU
OUNT
NTRY
RY BAN
ANK
Da
Datet d:d: Octotobe
ber 21
21, , 20
2021
21
Thisis ins
nstrum
umen
ent t wa
was dr
drafaftet d d by
by:
WI
WINT
NTHROP & WEINS
NSTI
TINE
NE, P.A.
I
Suiti e 3500
0
225 South Si
Sixtxth St
Streetet
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MidCountry/Freeport
Guaranty – Freeport
PERSONAL GUARANTY
In consideration of and in order to induce MidCountry Bank, a federal savings bank organized
under the laws of the United States of America with its banking house located in Bloomington,
Minnesota (the “Lender”), to extend financial accommodations to Freeport Elk River LLC, a
Minnesota limited liability company (the “Borrower”), pursuant to that certain Loan Agreement
of even date herewith by and between the Lender and the Borrower (as the same may be
amended, restated, renewed or supplemented, the “Loan Agreement”) and as evidenced by that
certain Real Estate Note of even date herewith executed by the Borrower in the original principal
amount of $24,240,000 and payable to the order of the Lender ((as the same may be amended,
restated, renewed or supplemented, the “Note”), the undersigned (the “Guarantor”) hereby:
1.
Unconditionally and absolutely guarantees to the Lender:
(a)
the full and prompt payment, when due, whether at the maturity dates specified
therein or theretofore upon acceleration of maturity pursuant to the provisions thereof, of
principal, accrued interest, prepayment premiums and late charges, if any, on the Note,
and any and all renewals thereof including notes taken in substitution therefor; and
(b)
any and all other liability or indebtedness of the Borrower to the Lender whether
now existing or hereafter arising, joint or joint and several, contingent or direct; and
(c)
the payment and performance by the Borrower of all of its obligations under and
pursuant to the Note, the Loan Agreement and any and all documents related thereto;
(the Note, the Loan Agreement and such other liability, indebtedness and obligations set forth
above are herein collectively referred to as the “Obligations”); together with the full and prompt
payment of any and all costs and expenses of and incidental to the collection of the Obligations
or the enforcement of this Guaranty, including, without limitation, attorneys’ fees.
2.
Agrees that the Lender may demand payment from the Guarantor of any installment (or
portion thereof) of principal or interest on the Note, when due, and the Guarantor shall
immediately pay the same to the Lender, and the Lender may demand payment or performance
of any or all of the other Obligations, when such payment or performance is due or required, and
the Guarantor shall immediately pay or perform the same, whether or not the Lender has
(i) declared an Event of Default, or (ii) accelerated payment of the Note, or (iii) commenced
repossession of, or foreclosure of any security interest, mortgage or other lien in, any or all of the
collateral securing the Note, or (iv) otherwise exercised its rights and remedies hereunder or
under the Note, the documents related thereto or applicable law.
3.
Waives (i) presentment, demand, notice of nonpayment, protest and notice of protest and
dishonor on the Obligations; (ii) notice of acceptance of this Guaranty by the Lender; and (iii)
notice of the creation or incurrence of the Obligations by the Borrower.
4.
Agrees that the Lender may from time to time, without notice to the Guarantor, which
notice is hereby waived by the Guarantor, extend, modify, renew or compromise the Obligations,
in whole or in part, without releasing, extinguishing or affecting in any manner whatsoever the
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
y
(
ed, restated, renewed or supp
ppleleme
mentnted
ed, ththe “Loa
oan Ag
Agrereement”) and as evidenced b
Real Estate Note of even da
d te herewitith ex
exec
ecututed
ed by the Borrower in the original pr
y
t of $24,240,000 and payablele to hthe order f
of ththe Lend
ndere ((as the same may b
y
e am
d, renewed or supplemented, the “Note”)”), ththe under isign
g ed (the “Guarantor”) hereby
Unconditionally and absolutut lely
y
gua
u rantntees toto t e
he Len
ende
der:
y
(a)
the full and prompt pa
paym
yment, wh
when due, wh
whetether at the maturity d
y
ates sp
therein or theretofore upon acceleration of maturity p
y ursuant to the provisions ther
principal, accrued interest, prepayment premiums and late charges, if any, on the
and any and all renewals therereof inc
ncluding
ng notes taken
en in substitution therefor; and
(b)
any a
y nd all other liab
ability o
y r indebtedness of the Borrower to the Lender w
now existing or hereafter ararisisining, joiointnt or jojoinint an
and se
se e
veraral, contingent or direct; and
(c)
the payment
y
an
and pe
pe
perfrfrfor
or
orma
ma
manc
nc
nce by
by
by t
y he
he
he Bo
Bo
Borrrrrrow
ow
owererer of
of
of alall of its obligations und
pursuant to the Note, the Loan Agreement and any and all documents related theret
ote, ththe Loan
an Agreem
emen
ent and d su
such othe
her liliab
abilility, inde
debted
edne
nessss and obliligations se
are hereinin collectivelyly r
y efefere red toto as
as the “O
“Oblbligigatatioions”); together with ththe fu
full and p
nt of an
any a
y nd
nd alall co
coststs and ex
expe
p nses of an
and incic dentalal toto ththe collllectition
on of the Oblig
enforcement of this Guaranty, including, without limitation, attorneys’ fees.
Agrerees ththatat ththe Le
Lend
nderer ma
may d
y
em
e and d pa
payme
mentnt
y
frfrom
om ththe Gu
Guarantotor r of any y ininststallm
n thereof) of princic pal or inteterests on the Note, when due, an
and d the Gu
Guaranto
iately p
y ay t
y he same to the Lender, and the Lender may d
y emand d pa
payment
y
or perfor
or
or all of the other Ob
O ligations, wh
when such pa
payment or performa
mance isis due or requirire
y
uararan
antotor shalall im
immediatatelely pa
pay o
y
r pe
perfrfor
o m ththe sa
same
me, wh
whetethe
her or
or no
not t ththe Le
Lend
nd
lared an Event of Default, or (ii) accelerated payment
y
of the Note, or (iii) comm
ession
o of, or foreclc os
osur
u e of any sec
ecurity
y
intere est, mor
o tgage e or
or othere lien in, , any
y
or all
y
ral securing ththe No
Note, or (iv) ototherw
r ise ex
e erercised its rirights and remedies hereun
the Note, ththe e documentnts s rerelated d ththere eteto or app
pplica
cablble law.
Waives (i) ) presentment,t dema
mand, no
notice
c of
o nonpay
aymentnt, pr
p otes
est and no
n tice of prote
th Obli
ti
(ii)
ti
f
t
f thi G
t
b
th L
d
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- 2 -
liability of the Guarantor hereunder, the foregoing acts being hereby consented to by the
Guarantor.
5.
Agrees that the Lender shall not be required to first resort for payment to the Borrower or
any other person, corporation or entity, or their properties or estates, or any other right or remedy
whatsoever, prior to enforcing this Guaranty.
6.
Agrees that this Guaranty shall be construed as a continuing, absolute, and unconditional
guaranty without regard to (i) the validity, regularity or enforceability of the Obligations or the
disaffirmance thereof in any insolvency or bankruptcy proceeding relating to the Borrower, or
(ii) any event or any conduct or action of the Borrower or the Lender or any other party which
might otherwise constitute a legal or equitable discharge of a surety or guarantor but for this
provision.
7.
Agrees that this Guaranty shall remain in full force and effect and be binding upon the
Guarantor until the Obligations are paid in full.
8.
Agrees that the Lender is expressly authorized to forward or deliver any or all collateral
and security which may at any time be placed with it by the Borrower, the Guarantor or any
other person, directly to the Borrower for collection and remittance or for credit, or to collect the
same in any other manner and to renew, extend, compromise, exchange, release, surrender or
modify the installments of, any or all of such collateral and security with or without
consideration and without notice to the Guarantor and without in any manner affecting the
absolute liability of the Guarantor hereunder; and that the liability of the Guarantor hereunder
shall not be affected or impaired by any failure, neglect or omission on the part of the Lender to
realize upon the Obligations, or upon any collateral or security therefor, nor by the taking by the
Lender of any other guaranty or guaranties to secure the Obligations or any other indebtedness of
the Borrower to the Lender, nor by the taking by the Lender of collateral or security of any kind
nor by any act or failure to act whatsoever which, but for this provision, might or could in law or
in equity act to release or reduce the Guarantor’s liability hereunder.
9.
Waives any right that the Guarantor may have to collect or seek to collect from the
Borrower the claim, if any, by subrogation or otherwise, acquired by the Guarantor through
payment of any part or all of the Obligations until the Obligations have been paid in full.
10.
Agrees that the liability of the Guarantor hereunder shall not be affected or impaired by
the existence or creation from time to time, with or without notice to the Guarantor, which notice
is hereby waived, of indebtedness from the Borrower to the Lender in addition to the
indebtedness evidenced by the Note; the creation or existence of such additional indebtedness
being hereby consented to by the Guarantor.
11.
Agrees that the possession of this instrument of guaranty by the Lender shall be
conclusive evidence of due execution and delivery hereof by the Guarantor.
12.
Agrees that this Guaranty shall be binding upon the legal representatives, successors and
assigns of the Guarantor, and shall inure to the benefit of the Lender and its successors, assigns
and legal representatives; that notwithstanding the foregoing, the Guarantor shall have no right to
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
Agrees that this Guarantyty sh
shalall be
be co
cons
nstrtrue
ued as
as a co
contntininuiu ng, absolute, and uncond
ty without regard to (i) ththe va
valilididityty, reregu
gulalarirityty o
y
r en
enfo
forcrceability o
y
f the Obligations
rmance thereof in any i
y nsolvency o
y
r bankruptcy p
y
roceed
e ing relating to the Borrow
y event or any conduct or actition
on of
of tht e Borrowerer or
or ththe Lender or any o
y
ther party
otherwise constitute a lega
gal or
or eq
equiuitat blble didischa
harg
rge of
of a a surety or guarantor but f
on.
Agrees that this Guaranty sh lall remain in fu
full fo
force and effect and be binding up
ntor until the Obligations are paid in full.
Agrees that the Lender is expr
pressly a
y uthorized
a
to forward or deliver any or all co
curity w
y
hich may at any time
me be
be plplac
aced
ed wi
withth itit by
by t
y he
he Borrower, the Guarantor
erson, directly to the Borrowe
wer fo
for co
collllec
ectition
on and
nd rem
emitittance or for credit, or to coll
n any other manner and to renew, extend, compromise, exchange, release, surren
y t
y
he installments of, any o
y
r all of such collateral and security w
y
ith or w
eration and without notice to the Guarantor and without in any manner affecti
te liability o
y
f the Guarantor hereunder; and that the liability o
y
f the Guarantor her
ot be afaffected
ed or
or im
impa
pairired by
by a
y ny
n f
y aiailulure,
f
ne
neglglec
ect t or
o om
omisissision
o on
on ththe pa
partrt of the Len
upon ththe Obligations,s, or up
u on
on an
any y collatatere al or
o se
secu
curity t
y herefor, nor by
by t
y he taking
r of any otht er guarantnty
y
or r guararantities
es to secu
curere th
y
e Ob
Obliligation
ons or any othther indebtedn
rrower to the Lender, nor by t
y he taking by hthe Lender of collater lal or secu irity of an
any act or failure to act whatsoever which, but for this provision, might or could in
ty actct t
y
o o rereleleas
ase e or
or red
educ
uce ththe e Gu
G aran
antotor’r s liab
abililitity here eu
eund
ndere .
y
Waives any r
y ight that the Guarantor may h
y
ave to collect or seek to collect fro
wer the claim, if any, by s
y
ubrogation or otherwise,e, acquired by t
y he
he Guarantor thth
ntnt of f an
any parart t or
or a
y
llll of ththe Ob
Obliliga
gation
ons un
untit l ththe e Ob
Obliligatitions s ha
have
ve been pa
paidid in fu
fullll.
Agrees that the liability o
y
f the Guarantor hereunder shall not be affected or impai
stenc
nce e or
or crereata ion n frfrom
om tim
ime to tim
ime,e with h or witho
houtut nototicice toto the
he Guarantntor, wh
w ich
eby waived, of indebtbtedness frfrom the Bo
Borrrrower to the Le
Lender in addition
edness ev
evididen
ence
c d by t
y he
he Note; ththe crcreation
o or ex
existence of such addiditition
onal indebt
hereby consented to by the Gua
uarantor.
y
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assign or otherwise transfer the Guarantor’s rights and obligations under this Guaranty to any
third party without the prior written consent of the Lender; and that any such assignment or
transfer shall not release or affect the liability of the Guarantor hereunder in any manner
whatsoever.
13.
Agrees that the Guarantor may be joined in any action or proceeding commenced against
the Borrower in connection with or based upon the Obligations and recovery may be had against
the Guarantor in any such action or proceeding or in any independent action or proceeding
against him should the Borrower fail to duly and punctually pay any of the principal of or
interest on the Obligations without any requirement that the Lender first assert, prosecute or
exhaust any remedy or claim against the Borrower.
14.
Agrees that upon the occurrence at any time of an Event of Default, the Lender shall have
the right to set off any and all amounts due hereunder by the Guarantor to the Lender against any
indebtedness or obligation of the Lender to the Guarantor.
15.
Agrees that the Guarantor shall be liable to the Lender for any deficiency remaining after
foreclosure of any mortgage in real estate or any security interest in personal property granted by
the Borrower, the Guarantor or any third party to the Lender to secure repayment of the
Obligations and the subsequent sale by the Lender of the property subject thereto to a third party
(whether at a foreclosure sale or at a sale thereafter by the Lender in the event the Lender
purchases said property at the foreclosure sale) notwithstanding any provision of applicable law
which may prevent the Lender from obtaining a deficiency judgment against, or otherwise
collecting a deficiency from, the Borrower, including, without limitation, Minnesota Statutes
582.30.
16.
Agrees that this Guaranty shall be deemed a contract made under and pursuant to the
laws of the State of Minnesota and shall be governed by and construed under the laws of such
state without giving effect to the choice of law provisions thereof; and that, wherever possible,
each provision of this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining provisions of the
Guaranty.
17.
Agrees that no failure on the part of the Lender to exercise, and no delay in exercising,
any right or remedy hereunder shall operate as or constitute a waiver thereof; nor shall any single
or partial exercise of any right or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right or remedy granted hereby or by any related document or
by law.
18.
Waives any and all claims against the Lender and defenses to performance and payment
hereunder relating in any way, directly or indirectly, to the performance of the Lender’s
obligations or exercise of any of its rights under the Note and the documents related thereto.
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
rrower in connection with or based upon the Obligations and recovery m
y
ay be had
y
a
uarantor in any such action
on or proceediding or in any i
y nd
ndependent action or proc
t him should the Borrowerer fafailil toto dulyly a
y
d
nd pu
punc
nctutualallyly p
y
ay a
y
ny o
y
f the principal
t on the Obligations without any r
y equirement that the Lender first assert, prosec
t any remedy
y
or claim agains
nst ththe Bo
Borrr ower.
y
Agrees that upon the occurrenc
nce e at any time of an Ev
Event of
of Default, t
y
he Lender sha
ht to set off any a
y nd all amoun
u tsts due hereu
eund
nder by the
he Guarantor to the Lender again
y
edness or obligation of the Lender to the Gu
Guarantor.
Agrees that the Guarantor shall be liable to the Lender for any deficiency rem
y
ainin
osure of any mortgage in real estatete or r any
y
secur
urit
y
y y inteterest in personal property gran
y
orrower, the Guarantor or any ththird pa trty t
y o ththe Le
Lender to secure repayment
y
tions and the subsequent sale by
by t
y he
he Len
ende
der of
of ththe pr
prop
operty subject thereto to a third
er at a foreclosure sale or at a sale thereafter by t
y he Lender in the event the L
ses said property at the foreclosure sale) notwithstanding g any y provision of applicab
may p
y
revent the Lender from obtaining a deficiency j
y udgment against, or oth
ing a deficiency f
y rom,
f
the Borrower, including, without limitation, Minnesota S
.
Agrees ththat this Guaran
antyty shall be
be deem
emed
ed a a contntraract ma
made und
nder an
a d pu
pursuant
f the State
f
of Mi
Minnesota an
a d d h
shall be govern d
ed by
b
a
y nd construed under the lal ws o
without giving effect to the choice of law provisions thereof; and that, wherever po
rovisisioion n of
of ththisis Gu
Guararan
anty sh
shalall be ininteterp
rprer ted d inin su
such
ch ma
mann
nner as toto be effefectctivive an
applicable law, but if any p
y
rovivisis on of this Guaran
anty shall be pr
p ohibited by o
y
r
applicable law, such provision shall be ineffective only to the
y
extet nt of such prohibi
ityty without
y
invalidating the remainder of suc
u h provisision or the remaiaining provisions
nty.y.
Agrees that no failure on the part of the Lender to exercise, and no delay i
y n exer
ht or reme
medy
dy hereu
e nd
nderer sha
h ll ope
peratet as or
or con
onstititutute a wa
waiverer the
herereof; nor r shall an
y
y
tial exercise of any r
y igight or reme
m dy h
y
ereu
eundere pr
p ec
eclude any y other or further ex
f or the exercrcisise of any
ny otht er rigightht or remedy
y
grar ntnted
e hereby
y
or by
b
y
any
y
r lelata ed docum
y
.
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19.
Warrants and represents to the Lender as follows:
(a)
Enforceability. This Guaranty constitutes the legal, valid and binding obligation
of the Guarantor enforceable in accordance with its terms (subject, as to enforceability, to
limitations resulting from bankruptcy, insolvency or other similar laws affecting
creditors’ rights generally).
(b)
Litigation. There is no action, suit or proceeding pending or, to the knowledge of
the Guarantor, threatened against or affecting the Guarantor which, if adversely
determined, would have a material adverse effect on the condition (financial or
otherwise), properties or assets of the Guarantor, or which would question the validity of
this Guaranty or any instrument, document or other agreement related hereto or required
hereby, or impair the ability of the Guarantor to perform the Guarantor’s obligations
hereunder or thereunder.
(c)
Default. The Guarantor is not in default of a material provision under any
agreement, instrument, decree or order to which the Guarantor is a party or by which the
Guarantor or the Guarantor’s property is bound or affected.
(d)
Consents. To the Guarantor’s knowledge, no consent, approval, order or
authorization of, or registration, declaration or filing with, or notice to, any governmental
authority or any third party is required in connection with the execution and delivery of
this Guaranty or any of the agreements or instruments herein mentioned to which the
Guarantor is a party or the carrying out or performance of any of the transactions required
or contemplated hereby or thereby or, if required, such consent, approval, order or
authorization has been obtained or such registration, declaration or filing has been
accomplished or such notice has been given prior to the date hereof.
(e)
Taxes. The Guarantor has filed all tax returns required to be filed and has paid all
taxes shown thereon to be due, including interest and penalties, which are not being
contested in good faith and by appropriate proceedings and has no information or
knowledge of any objections to or claims for additional taxes in respect of federal income
or excess profits tax returns for prior years.
(f)
Financial Condition. The financial statements of the Guarantor furnished to the
Lender are complete and correct in all respects and fairly present the financial condition
of the Guarantor at the dates of such statements, and have been prepared in accordance
with generally accepted accounting principles, consistently applied. Since the most recent
set of financial statements delivered by the Guarantor to the Lender, there have been no
material adverse changes in the financial condition of the Guarantor.
(g)
Residence, Etc.. The Guarantor is an individual person who is a citizen of the
United States of America and a citizen and resident of the State of Colorado, who is
under no legal disability. The obligations of the Guarantor under this Guaranty are or will
be incurred in the interest of the marriage and family of the Guarantor.
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
(b)
Litigation. There isis no
no ac
actition
on, su
suitit or
or pr
proc
ocee
eediding
ng pending or, to the knowle
the Guarantor, threatened
ed ag
agaiains
nst or
or afaffefectctining ththe Gu
Guarantor which, if adv
determined, would have a material adverse effect
f
on the condition (financ
otherwise), properties or asse
setsts of
of ththe Guarantotor, or
or wh
which would question the vali
this Guaranty or any instru
rume
mentnt, do
docu
cumentnt or otothe
her ag
agreement related hereto or re
hereby, or impair the ab
ability o
y
f the Gu
Guararantor to pe
perform the Guarantor’s oblig
hereunder or thereunder.
(c)
Default. The Guarantor is not in default of a material provision und
agreement, instrument, decree or r
order to wh
which the Guarantor is a party or by w
y
h
Guarantor or the Guarantor’s pr
prop
opertyty is bo
boun
und or
or affffected.
y
(d)
Consents. To the Gu
Guararan
antotor’r s kn
know
owleledg
dge, no consent, approval, or
authorization of, or registration, declaration or filing with, or notice to, any govern
authority o
y
r any third party i
y s required in connection with the execution and deliv
this Guaranty or any of the agreements or instruments herein mentioned to whi
Guarantor is a party or the carrying out or performance of any of the transactions re
y
or co
c ntn emplplatated
ed he
hereby y or
or ththereb
eby or, ifif rerequ
quirired, su
such
ch co
cons
n en
ent,t, ap
approval, or
author
orizizatatioi n has be
been
en ob
o tainined
ed or su
such
ch reregigiststraration, declclaration or
or fifiling ha
accomp
mplilished or such
c noto ici e has be
been given
en prir or to ththe e datete hereo
eof.
(e)
Taxes. The Guarantor has filed all tax returns required to be filed and has p
taxe
xes sh
show
own tht erereo
eon toto be
be du
d e, ininclclud
uding inintetererest an
and pe
p nalties,s which arare not
contested in good faith and d by
by a
y
ppropr
priaiate
a
proc
oceedings and d ha
has no informat
knowledge of any objections to or claims
ms for additional taxes i
y
n n resp
spec
e t of federal i
or excess profits tax returns for prior years.s
(f)
Financial Condition. The financial statements of the Guarantor furnished
Lender are complete and correct in all respects and fairly present the financial con
of ththe Gu
Guararantntor
or atat ththe da
d tes of
of su
such ststatatementsts, an
and d ha
have
ve be
been
en pr
p ep
epared
ed inin acco
with generallyly a
y ccepted accountiting
ng principiplel s,s, consistently applied. Since the most
y
set of fifina
nanc
nciaial statem
ements delilive
vered d by t
y he Gu
G araran
a tor to the Lender, ththere e have b
material adverse changes in ththe fina
nancial condititioi n of the
he Guararantor.
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20.
Agrees that the liability of the Guarantor and any other guarantor of the Obligations shall
be joint and several.
21.
Agrees to deliver to the Lender the financial information and documentation required
under the Loan Agreement for the Guarantor.
22.
Agrees that (i) the Guarantor will indirectly benefit by and from the making of the loan
by the Lender to the Borrower evidenced by the Note; (ii) the Guarantor has received legal and
adequate consideration for the execution of this Guaranty and has executed and delivered this
Guaranty to the Lender in good faith in exchange for reasonably equivalent value; (iii) the
Guarantor is not presently insolvent and will not be rendered insolvent by virtue of the execution
and delivery of this Guaranty; (iv) the Guarantor has not executed or delivered this Guaranty
with actual intent to hinder, delay or defraud the Guarantor’s creditors; and (v) the Lender has
agreed to make such loan in reliance upon this Guaranty.
23.
Agrees that if, at any time, all or any part of any payment previously applied by the
Lender to any of the Obligations must be returned by the Lender for any reason, whether by
court order, administrative order or settlement, the Guarantor shall remain liable for the full
amount returned as if said amount had never been received by the Lender, notwithstanding any
term of this Guaranty or the cancellation or return of any note or other agreement evidencing the
Obligations.
24.
Irrevocably submits to the jurisdiction of any Minnesota state court or federal court over
any action or proceeding arising out of or relating to this Guaranty, the Note and any instrument,
agreement or document related thereto (collectively, the “Loan Documents”); agrees that all
claims in respect of such action or proceeding may be heard and determined in such Minnesota
state or federal court; irrevocably waives, to the fullest extent he may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding; irrevocably
consents to the service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding by the mailing by United States certified mail,
return receipt requested, of copies of such process to the Guarantor’s last known address; and
agrees that judgment final by appeal, or expiration of time to appeal without an appeal being
taken, in any such action or proceeding shall be conclusive and may be enforced in any other
jurisdictions by suit on the judgment or in any other manner provided by law; provided that
nothing in this paragraph shall affect the right of the Lender to serve legal process in any other
manner permitted by law or affect the right of Lender to bring any action or proceeding against
either Guarantor or his property in the courts of any other jurisdiction to the extent permitted by
law.
EXHIBIT &
71-CV-24-752
Filed in District Court
State of Minnesota
6/3/2024 4:19 PM
Agrees that (i) the Guarantor will indirectly b
y
enefit by a
y nd from the making of th
Lender to the Borrower evididen
ence
ced by
by t
y he
he No
Notete; (i(ii)i) ththe Gu
Guarantor has received leg
ate consideration for the exec
ecututioion of
of ththisis Gu
Guararan
anty y an
and has executed and deliver
nty to the Lender in good faith in exchange for reasonably e
y
quivalent value; (i
ntor is not presently i
y nsolventnt and
nd wilill not be ren
ende
derered ini solvent by v
y irtue of the exe
livery o
y
f this Guaranty; (i(iv)
v) ththe Gu
Guaran
antor ha
has no
not ex
executed or delivered this Gu
ctual intent to hinder, delay o
y
r de
d fraud d ththe Guarantotor’s creditors; and (v) the Lend
to make such loan in reliance
c upon this Gua
u ranty.
Agrees that if, at any time, all or any p
y
art of any p
y
ayment
y
previously a
y
pplied
a
r to any of the Obligations must be
be returned by t
y he Lender for any r
y eason, whet
order, administrative order or settttleme
ment, hthe
u
Guaran
antor shall remain liable for t
t returned as if said amount ha
had never been receiv d
ed by
b
t
y he Lender, notwithstandi
f this Guaranty or
y
t
r he cancellalatition
on or
or reretuturn
rn of
of an
any n
y otote or other agreement evidenc
tions.
Irrevocably submits to the jurisdiction of any Minnesota state court or federal cou
tion or proceeding arising out of or relating to this Guaranty, the Note and any instr
y
ment or
o docume
mentnt rerelalatet d d ththere ete o (c(colollelectctivively, ththe “L
“Loa
oan n Do
Docu
cume
mentn s”);); agrees t
in resp
spect t of
of such ac
actition
on or pr
proc
ocee
eeding
ng ma
m y be
be he
hearard d and determ
rmined
ed inin such Min
r fede
deral court; irrevo
v cablbly wa
w ivives, to the fu
fullest ex
extent he
he may e
y
ffffec itive
vely do
e of an ini convenient forum to the maintenance of such action or proceediding; irrev
ts to the service of copies of the summons and complaint and any o
y
ther process
e serv
rved
ed inin an
any s
y uc
uch ac
actition
on or
or pr
p ocee
eediding
n by
by t
y he
he ma
mailining by
b
Unitited
e States
es ce
certr ified
receipt requested, of
o copies of
of su
such process to the Guarantor’s lal stst known addres
that judgment final by a
y
ppeal,
a
or expiration of time to appealal without an appeal
in any such action or proceeding
ng shall be conclusive
v and may b
y
e enfo
f rced in any
ctition
ons by s
y uiuit on
on ththe jujudg
dgme
mentnt or inin an
any otothe
her ma
mann
nnerer pr
prov
ovidided by
by l
y aw
aw; pr
prov
ovidide
g in this paragraph shall affect the right of the Lender to serve legal process in any
r permitted by l
y aw or affect the righ
g t of Lender to bring any y action or proceeding a
Guarantor or
o hih s propererty y in the courts of
of any o
y therer jujuririsd
sdiction
on to the extetent permi
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25.
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR PERTAINING TO THIS GUARANTY OR THE OTHER
LOAN DOCUMENTS.
Dated as of this 21st day of October, 2021.
15357-206
22548828v1
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EXHIBIT &
71-CV-24-752
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6
v1
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EXHIBIT D
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EXHIBIT D
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EXHIBIT D
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STATE OF MINNESOTA
DISTRICT COURT
COUNTY OF SHERBURNE
TENTH JUDICIAL DISTRICT
CASE TYPE: CONTRACT
MidCountry Bank,
Plaintiff,
v.
Freeport Elk River LLC; Brent Herron; and
Michelle Herron,
Defendants.
Court File No. 71-CV-24-752
Judge Brianne J. Buccicone
ORDER
The above-entitled matter came before the Honorable Brianne J. Buccicone on October 11,
2024 on Plaintiff MidCountry Bank’s (“Plaintiff” or the “Bank”) motion for default judgment in
the above-captioned matter against Defendants Freeport Elk River LLC (“Borrower”), Brent
Herron (“Mr. Herron”), and Michelle Herron (“Mrs. Herron”) (Mr. Herron and Mrs. Herron,
collectively, “Guarantors”) (Borrower and Guarantors, collectively, “Defendants”). Plaintiff
appeared by Michael E. Obermueller of Winthrop & Weinstine PA. Other appearances, if any,
were noted on the record. The Court, having considered the same, and being duly advised of the
issues in dispute, hereby makes the following findings:
PARTIES
1.
Plaintiff is a federally chartered savings bank with a main office address of 7825
Washington Avenue South, Suite #120, Bloomington, Minnesota 55439.
2.
Borrower is a Minnesota limited liability company with a registered address of
1809 Northwestern Avenue, Stillwater, MN 55082.
3.
Mr. Herron is a Colorado resident with a residential address of 2153 South Dayton
Street, Denver, CO 80231.
71-CV-24-752
Filed in District Court
State of Minnesota
10/11/2024
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Electronically Served
10/15/2024 8:35 AM
Sherburne County, MN
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4.
Mrs. Herron is a Colorado resident with a residential address of 10365 N. Jullian
Court, Westminster, CO 80023.
JURISDICTION AND VENUE
5.
This Court has subject matter jurisdiction over this lawsuit.
6.
This Court has personal jurisdiction over Defendants pursuant to Minnesota law.
7.
Venue is proper in this Court by consent of the parties under their subject loan
documents and pursuant to Minn. Stat. §§ 542.02 and 542.09 because the subject real and personal
property of this action are located in Sherburne County.
FACTUAL BACKGROUND
A.
The Agreement
8.
Borrower and the Bank entered into that certain Loan Agreement dated October 21,
2021 (“Loan Agreement”) to finance Borrower’s acquisition of a retail center located at 19216
Freeport Street NW in Elk River, MN. Compl. at ¶ 8. A true and correct copy of the Loan
Agreement is attached to the Complaint as Exhibit A. Id.
9.
In connection with the Loan Agreement, Borrower executed and delivered to Bank
that certain Real Estate Note dated October 21, 2021 (“Note”), in the original principal amount of
$24,240,000 (“Loan”). Id. at ¶ 9. A true and correct copy of the Note is attached to the Complaint
as Exhibit B. Id.
10.
To secure the obligations of Borrower to Bank, including, but not limited to, the
obligations under the Loan Agreement and the Note, Borrower executed and delivered to Bank
that certain Mortgage, Security Agreement, Fixture Financing Statement and Assignment of
Leases and Rents (“Mortgage”) in favor of Bank, dated October 22, 2021, recorded with the
Sherburne County Office of the Registrar of Titles on October 29, 2021 as Document No. 59905.
Id. at ¶ 9. A true and correct copy of the Mortgage is attached to the Complaint as Exhibit C. Id.
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11.
The Mortgage encumbered all of the property described therein, which property
includes, among other things, all personal property, rents, profits, accounts, and general intangibles
of the Borrower within the subject real property (“Collateral”) and the real estate, generally
described as the Elk River Center, with a common address of 19216 Freeport Street NW, Elk
River, MN (“Real Estate,” together will Collateral, “Property”). Id. at ¶ 11.
12.
To further guarantee the payment and performance of Borrower’s obligations to the
Bank, including, but not limited to, those under the Loan Agreement, Note, and Mortgage, Mr.
Herron and Mrs. Herron each executed and delivered to Bank those certain Personal Guaranties
dated October 21, 2021 (“Guaranties”), pursuant to which the Guarantors have jointly and
severally, absolutely, and unconditionally guaranteed to the Bank payment of the Note and other
obligations of the Borrower to the Bank. Id. at ¶ 12. True and correct copies of Mr. Herron’s
Guaranty and Mrs. Herron’s Guaranty are attached to the Complaint as Exhibit D and Exhibit E,
respectively. Id.
13.
The Loan Agreement, the Note, the Mortgage, the Guaranties, and all documents
related thereto, are collectively referred to herein as the “Loan Documents.”
14.
The Bank disbursed the principal proceeds of the Loan in accordance with the terms
and conditions of the Loan Documents in exchange for, among other things, Borrower’s and
Guarantors’ promises (i) to make monthly payments of principal and interest as required under the
Loan Documents; (ii) to abide by the financial and operating covenants set forth in the Loan
Documents; and (iii) that its representations and warranties contained in the Loan Documents
were, and would remain, true. Id. at ¶ 14.
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15.
The Bank reasonably relied on Borrower’s and Guarantors’ promises, covenants,
representations and warranties reflected in the Loan Documents when the Bank agreed to issue the
Note and extend the Loan. Id. at ¶ 15.
B.
Events of Default Under the Loan Documents
16.
The Loan Documents define the events of default, which include, among other
things, failure to provide Bank with truthful representation and failure to make payment of any
portion of the Loan when due and owing as required under the Loan Documents, such as the real
estate taxes and the monthly principal and interest payments (each defined event of default shall
be “Event of Default” herein). Id. at ¶ 16.
17.
Section 3.6 of the Loan Agreement states that “representations and warranties
contained in Section 4 hereof are true and correct on and as of the date hereof.” Id. at ¶ 8, Ex. A.
18.
Section 4.5 of the Loan Agreement expressly provides that “[no] Event of Default
has occurred and is continuing as of the date hereof and no event has occurred and is continuing
which would constitute an Event of Default with notice, lapse of time or both.” Id.
19.
Section 7.1(b) of the Loan Agreement provides that “Borrower or Guarantor shall
default in the due performance or observance of any term, covenant, or agreement contained in
this Loan Agreement . . . the Loan Documents or in any other documents or agreements delivered
pursuant hereto or in connection herewith.” Id.
20.
Section 7.1(d) of the Loan Agreement provides an Event of Default occurs under
the Loan Agreement “[i]f any representation or warranty contained in this Loan Agreement, any
of the Loan Documents, or any letter or certificate furnished or to be furnished to [Bank] proves
to be false as of the date of the Loan Agreement, or the date such Loan Documents are executed
or at the time such letter or certificate is delivered to [Bank].” Id.
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21.
Section 7.01 of the Mortgage provides that it is it is an event of default under the
Mortgage if an “Event of Default occurs under the Loan Agreement.” Compl. at ¶ 9, Ex. C.
C.
Borrower and Guarantors Default Under the Loan Documents
22.
Borrower and Guarantors have defaulted and materially breached certain terms,
conditions, and covenants of the Loan Documents, including, but not limited to, falsifying the
purchase price of the Real Estate in a purchase agreement and providing materially untrue
information to Bank in order to secure the Loan, in addition to failing to timely pay amounts due
and owing to Bank under the Loan Documents. Compl. at ¶ 22.
23.
In the Loan Documents, Borrower and Guarantors warrant that the information
furnished to Bank are true and correct, but Defendants falsified the purchase price of the Real
Estate in a purchase agreement to secure the Loan. Id. at ¶ 23.
24.
Guarantors provided Bank with materially untrue financial information to falsify
their financial position. Id. at ¶ 24.
25.
In addition, Borrower and Guarantors have failed to timely pay, among other things,
the taxes against the Real Estate and the monthly principal and interest payments due and owing
to Bank. Id. at ¶ 25.
26.
As a result of Borrower’s and Guarantors’ defaults and material breaches of the
Loan Documents, on January 4, 2023, Bank sent Borrower and Guarantor a written notice of
default (“Notice of Default”). Id. at ¶ 26. A true and correct copy of the Notice of Default is
attached to the Complaint as Exhibit F. Id.
D.
The Bank’s Remedies for Borrower and Guarantors’ Defaults
27.
The Loan Documents enable the Bank to exercise its rights and remedies by, among
other things, accelerating the Loan and implementing default interest at a rate equal to five percent
(5.00%) per annum in excess of the then-current interest rate. Id. at ¶ 27.
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E.
The Forbearance Agreement and First Amendment
28.
On or around February 7, 2023, the Bank, Borrower, and Guarantors entered into a
Forbearance Agreement dated and effective February 1, 2023 (“Forbearance Agreement”) as a
result of Borrower’s and Guarantors’ request that the Bank forbear from exercising its rights and
remedies under the Loan Documents and applicable laws. Id. at ¶ 28. A true and correct copy of
the Forbearance Agreement is attached to the Complaint as Exhibit G. Id.
29.
Under the Forbearance Agreement, the Bank agreed to forbear from exercising
some of its rights and remedies under the Loan Documents in exchange for Borrower committing
to: (a) cause tenant payments in connection with the Real Estate to be deposited in the operating
account established for the same at the Bank pursuant to Section 7(F) of the Loan Agreement; (b)
pay a forbearance fee to Bank in the amount of $30,000.00; (c) provide status reports to Bank of
leasing activity in connection with the Real Estate; (d) provide Bank with updated financial
statements and tax returns; and (e) pay the Bank the entire amount due and owing under the Loan
on or before September 30, 2023 (“Maturity Date”). Id. at ¶ 29.
30.
The Forbearance Agreement obligates Guarantors to provide updated financial
statements and their most recent tax returns within seven days of the effective date of the
Forbearance Agreement. Id. at ¶ 30.
31.
Under Section 4 of the Forbearance Agreement, Borrower and Guarantors
“acknowledge[d] that an event of default has occurred and is continuing under the Loan
Documents.” Id. at ¶ 31, Ex. G.
32.
Section 6 of the Forbearance Agreement provides that Borrower and Guarantors’
failure to perform each and every obligation under the Forbearance Agreement, and the following
events, in relevant part, constitute an event of default: (a) breach or violation of any covenant or
agreement of Borrower and Guarantors as set forth in the Forbearance Agreement; (b) false
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warranties, representations, or statements made by Borrower or Guarantors to Bank; and (c) failure
of Borrower or Guarantors to perform obligations under any other agreement with Bank. Id. at ¶
32, Ex. G.
33.
Section 7 of the Forbearance Agreement entitles Bank to “exercise all of its legal
and equitable rights and rights under the Forbearance Agreement, the Loan Documents, and the
right to recover reasonable attorneys’ fees and legal expenses incurred by the Bank in the
enforcement of such rights and remedies.” Id. at ¶ 33, Ex. G.
34.
Under Section 7 of the Forbearance Agreement, Bank is entitled to pursue any and
all collection efforts available to it against (a) Borrower pursuant to the Loan Documents and the
Forbearance Agreement; and (b) Guarantors pursuant to their respective Guaranties and the
Forbearance Agreement. Id. at ¶ 34, Ex. G.
35.
Section 9 of the Forbearance Agreement provides, “[u]nless otherwise expressly
provided herein, nothing in this Agreement shall modify, release, or discharge the obligations of
Borrower and Guarantors under the Loan Documents; and [] Bank expressly reserves all such
rights. Any forbearance by [] Bank to Borrower and Guarantors shall not modify Borrower and
Guarantors’ obligations to [] Bank under this Agreement or the Loan Documents.” Id.
¶ 35, Ex. G.
36.
On May 22, 2023, the Bank, Borrower, and Guarantors entered into a First
Amendment to Forbearance Agreement dated and effective April 28, 2023 (“First Forbearance
Amendment”) to amend certain terms of the Forbearance Agreement. A true and correct copy of
the First Forbearance Amendment is attached to the Complaint as Exhibit H. Compl. at ¶ 36, Ex.
H.
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37.
Under Section 2 of the First Forbearance Amendment, “Borrower and Guarantors
acknowledge, represent, and warrant that the Indebtedness due and owing to the Bank is correct
and is absolutely and unconditionally due and payable by Borrower to the Bank . . . As of [April
28, 2023] of this [First Forbearance] Amendment, the current balance of the Indebtedness is a
principal balance of $23,499,629.28, plus accrued and unpaid interest in the amount of
$203,038.58, plus the Bank’s attorney’s fees and costs incurred in connection with the [First
Forbearance] Amendment.” Id. at ¶ 37, Ex. H.
38.
Under the First Forbearance Amendment, the Bank further agreed to forbear from
exercising some of its rights and remedies under the Loan Documents, by requiring Borrower and
Guarantors, among other things, to: (a) authorize Bank to withdraw sums due and owing to it from
certain accounts held at Bank; (b) lose access to direct, online banking for any and all of their
accounts held at Bank; (c) pay default interest in the manner set forth in the First Forbearance
Amendment; and (d) list the Real Estate for sale within 120 days of the effective date of the First
Forbearance Amendment with the closing being 90 days after execution of the purchase
agreement. Id. at ¶ 38, Ex. H.
39.
The First Forbearance Amendment provides, “[i]f one or more purchase
agreements for the entire [Real Estate] are entered into within the timeframes above, and all other
conditions of this [First Forbearance] Amendment are met, the Maturity Date shall be amended to
90 days after the execution of the purchase agreement.” Id. at ¶ 39, Ex. H.
40.
Under Section 4 of the First Forbearance Amendment, Borrower and Guarantors
“acknowledge[d] that an event of default has occurred and is continuing under the Loan
Documents.” Id. at ¶ 50, Ex. H.
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41.
Section 7 of the First Forbearance Amendment provides, “[u]nless otherwise
expressly provided herein, nothing in this Amendment shall modify, release, or discharge the
obligations of Borrower and Guarantors under the Loan Documents or the [Forbearance]
Agreement and the Bank expressly reserves all such rights.” (emphasis added). Id. at ¶ 41, Ex. H.
42.
Section 8 of the First Forbearance Amendment provides, “Borrower and
Guarantors, on behalf of themselves, their agents, insurers, heirs, successors and assigns, releases,
acquits and forever discharges the Bank, together with all of its claims, demands, or causes of
action of any kind, nature or description whether arising in law or equity or upon contract or tort
under any state or federal law or otherwise, which Borrower has, had or may claim to have against
Bank for or by reason of any act, omission, matter, cause or thing whatsoever arising from the
beginning of time to and including the date of this [First Forbearance] Amendment, whether such
claims, demand and cause of action are matured or unmatured or known or unknown.” Id. at ¶ 42,
Ex. H.
F.
The Sale of the Real Estate
43.
On December 22, 2023, Borrower, as seller, and EGPSYC Elk River II, LLC
(“Purchaser”), as purchaser, closed on the Real Estate (“Sale”). Compl. at ¶ 43.
44.
On December 22, 2023, Bank received a wire in the amount of $20,176,968.18 in
immediately available funds from the Sale to be applied as a principal reduction on the Note (“Sale
Proceeds”). Bank further set off an amount of $195,775.00 from the operating account of Borrower
(“Setoff”). Id. at ¶ 44.
45.
Despite the Sale Proceeds and Setoff, as of the date of the Complaint, Borrower
and Guarantors still owe at least $2,600,000.00 to Bank under the Loan Documents, plus
continuing interest, costs, taxes, attorneys’ fees, late and other charges, which costs, fees, and
expenses accrue daily under the Loan Documents. Id. at ¶ 45.
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G.
Defendants’ Default in the Present Action
46.
On April 29, 2024, Bank, by process server, completed personal service upon Mr.
Herron at 2153 South Dayton Street, Denver, CO 80231 as evidenced by the Affidavit of Service
filed with the Court on June 3, 2024.
47.
Mr. Herron’s deadline to answer or otherwise respond to the Complaint was 21
days from April 29, 2024, on May 20, 2024. Bank granted Mr. Herron an answer extension
deadline to May 31, 2024, pursuant to counsel for Bank’s phone conversation with Mr. Herron’s
counsel at the time.
48.
On April 30, 2024, Bank, by process server, completed personal service upon Mrs.
Herron at 10365 North Jullian Court, Westminster, CO 80023 as evidenced by the Affidavit of
Service filed with the Court on June 3, 2024.
49.
Mrs. Herron’s deadline to answer or otherwise respond to the Complaint was 21
days from April 30, 2024, on May 21, 2024.
50.
On May 10, 2024, Bank, by process server, completed personal service upon the
Minnesota Secretary of State, authorized agent of Borrower, at 332 Minnesota Street, Suite N201,
Saint Paul, MN 55101, as evidenced by the Affidavit of Service filed with the Court on June 3,
2024, because no agent, officer, manager, or general partner could be found at the registered
address filed with the Minnesota Secretary of State. Shortly thereafter, on May 13, 2024, the
Minnesota Secretary of State completed service upon Freeport by certified mail as evidenced by
the Certificate of Service filed with the Court on July 30, 2024.
51.
Borrower’s deadline to answer or otherwise respond to the Complaint was 30 days
from May 13, 2024, on June 12, 2024. Minn. Stat. § 5.25, subd. 7.
52.
On June 3, 2024, after completing service upon Defendants, Bank filed this action
with the Court.
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53.
Defendants have failed to answer or otherwise respond to Bank’s Complaint or
serve a copy of any answer or other defense upon Bank.
54.
Defendants have not validly disputed their defaults under the terms and conditions
of their respective agreements executed by and between Bank and each of the Defendants. Id. at
¶ 10.
55.
The Complaint alleges causes of action against Defendants for Breach of Loan
Documents (against Borrower) (Count I) and Breach of Guaranties (against Guarantors) (Count
II).
56.
The Complaint seeks a judgment against Defendants for the amounts due under
applicable Minnesota law and the Loan Documents, Forbearance Agreement, and First
Forbearance Amendment, including Bank’s reasonable attorneys’ fees and costs.
57.
Defendants are in default by failing to file an answer or by otherwise responding to
the Complaint within the answer deadline. As set forth above, Mrs. Herron’s answer was due on
May 21, 2024, Mr. Herron’s answer was due on May 31, 2024, and Borrower’s answer was due
on June 12, 2024.
58.
Based upon the foregoing facts, Defendants now are in default, and Bank is entitled
to the entry of a default judgment against Defendants. Accordingly, under Minn. R. Civ. P. 55.01,
Bank is entitled to the entry of judgment against Defendants, jointly and severally, for the relief
sought in the Complaint. The judgment amount as of September 24, 2024, based on the terms of
the Loan Documents, Forbearance Agreement, and First Forbearance Amendment, is as follows:
Principal:
$2,185,386.19
Interest to Sep 24, 2024:
$270,290.49
Commercial PPP 3-2-2-2-1:
$43,707.72
Default Interest 2.5% from 4/28/23-12/13/23:
$368,580.92
Unreimbursed Attorney Fees as of 8/31/2024:
$55,454.47
Net Amount Due:
$2,923,419.79
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Interest @ 361.20 per day (Sept. 24 to Oct. 11):
$6,140.40
Litigation costs and disbursements:
$1,648.75
Total Judgment:
$2,931,208.94 plus post-judgment
interest.
(Obermueller Declaration of Amounts Due, ¶¶1-10, Exs. A-C)
Based on the foregoing findings, IT IS HEREBY ORDERED AS FOLLOWS:
1.
Plaintiff MidCountry Bank’s Motion for Default Judgment is GRANTED IN ITS
ENTIRETY;
2.
Pursuant to Minn. R. Civ. P. 55.01, a judgment is hereby entered on Plaintiff
MidCountry Bank’s breach of loan documents claim against Defendant Freeport Elk River LLC
(Count I of the Complaint) and breach of guaranties claim against Defendants Brent Herron and
Michelle Herron (Count II of the Complaint).
3.
Plaintiff MidCountry Bank is awarded monetary judgment against Defendants
Freeport Elk River LLC, Brent Herron, and Michelle Herron, jointly and severally, in the following
manner:
(a)
Defendants Freeport Elk River LLC, Brent Herron, and Michelle Herron
are jointly and severally liable in the amount of $2,931,208.94 in monetary damages,
inclusive of attorneys’ fees, costs, disbursements, and expenses through August 31, 2024
and interest through October 11, 2024, which is hereby awarded to Plaintiff MidCountry
Bank.
(b)
Based upon review of the Declaration Michael E. Obermueller concerning
expenses and attorneys’ fees incurred by Plaintiff MidCountry Bank in connection with
this action, this Court concludes that they are reasonable and necessary under the
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circumstances, and Defendants Freeport Elk River LLC, Brent Herron, and Michelle
Herron are jointly and severally liable for such attorneys’ fees and expenses.
(c)
Defendants Freeport Elk River LLC, Brent Herron, and Michelle Herron
are jointly and severally liable for any additional costs and any attorneys’ fees incurred by
MidCountry Bank on or after September 1, 2024, which are recoverable under the subject
Loan Documents, Forbearance Agreement, and First Forbearance Amendment at issue in
this action. Such amounts are hereby awarded to Plaintiff MidCountry Bank in addition to
the monetary damages awarded above.
(d)
Plaintiff MidCountry Bank shall be entitled to applicable post-judgment
interest at the maximum rate allowed by law.
4.
The Court Administrator is directed to enter final judgment in favor of Plaintiff and
against Defendant in the total amount of $2,931,208.94 plus costs, fees and post-judgment interest
in accord with this Order.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated this ___ day of ___________, 2024.
BY THE COURT:
The Honorable Brianne J. Buccicone
Judge of District Court
29778831v1
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2FWREHU
Buccicone, Brianne (Judge)
2024.10.11 10:10:19 -05'00'
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Adams County, Colorado, District Court
Adams County Justice Center
1100 Judicial Center Dr.
Brighton, CO 80601
(303) 659-1161
Plaintiff: MidCountry Bank
v.
Defendants: Freeport Elk River LLC, Brent Herron, and
Michelle Herron.
COURT USE ONLY
Case Number: 2024CV____
Courtroom
ORDER FOR CONFIRMATION OF
REGISTRATION OF FOREIGN JUDGMENT
This matter having come before the Court on Plaintiff’s filing of a Foreign Judgment
entered by the District Court for the Tenth Judicial District, County of Sherburne, State of
Minnesota on the 15th day of October 2024, which is a court of original and general jurisdiction
for the State of Minnesota, and the Court being fully advised in the premises, it is
HEREBY ORDERED AND CONFIRMED that a registration of foreign judgment has
been entered in favor of Plaintiff MidCountry Bank and against Defendants Freeport Elk River
LLC, a Minnesota limited liability company, Brent Herron, and Michelle Herron in the principal
amount of $2,931,208.94 with judgment interest continuing to accrue at the rate of 8% per year
from the 15th day of October 2024 until paid.
DATED this ____ day of _____________ 2024.
DISTRICT COURT JUDGE
OURT JUD
UD
UD
UD
UD
UD
UD
UD
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U GE
GE
GE
GE
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GE
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GE
G
DATED November 9, 2024
DATE FILED
November 9, 2024 1:06 PM
CASE NUMBER: 2024CV31629
EXHIBIT H
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Adams County, Colorado, District Court
Adams County Justice Center
1100 Judicial Center Dr.
Brighton, CO 80601
(303) 659-1161
Plaintiff: MidCountry Bank
v.
Defendants: Freeport Elk River LLC, Brent Herron,
and Michelle Herron.
COURT USE ONLY
Case Number: 2024CV31629
Courtroom C
CHARGING ORDER AGAINST REDWOOD MEDICAL LLC PURSUANT TO C.R.S.
§ 7-80-703
Plaintiff MidCountry Bank (the “Bank”) has moved for a charging order on Defendant
Brent Herron’s (“Mr. Herron’s”) membership interest in Redwood Medical LLC, a Colorado
limited liability company, 1001 S. Perry St., Suite 104B, Castle Rock, CO 80104, (“Redwood
Medical”), pursuant to C.R.S. § 7-80-703:
1)
By Notice of Filing of Foreign Judgment dated October 31, 2024, this Court entered
a judgment in favor of the Bank against Freeport Elk River LLC, Brent Herron, and Michelle
Herron in the amount of $2,931,208.94, plus interest at the rate of 8% per annum (the “Judgment”).
The Judgment is now collectible, as the stay of C.R.S. § 13-53-104(3) has expired.
2)
C.R.S. § 7-80-703 provides:
On application to a court of competent jurisdiction by any judgment creditor of a
member, the court may charge the membership interest of the member with
payment of the unsatisfied amount of the judgment with interest thereon and may
then or later appoint a receiver of the member's share of the profits and of any other
money due or to become due to the member in respect of the limited liability
company and make all other orders, directions, accounts, and inquiries that the
debtor member might have made, or that the circumstances of the case may require.
To the extent so charged, except as provided in this section, the judgment creditor
has only the rights of an assignee or transferee of the membership interest. The
membership interest charged may be redeemed at any time before foreclosure. If
the sale is directed by the court, the membership interest may be purchased without
causing a dissolution with separate property by any one or more of the members.
DATE FILED
December 29, 2024 5:34 PM
CASE NUMBER: 2024CV31629
EXHIBIT I
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With the consent of all members whose membership interests are not being charged
or sold, the membership interest may be purchased without causing a dissolution
with property of the limited liability company. This article shall not deprive any
member of the benefit of any exemption laws applicable to the member's
membership interest.
3)
Pursuant to C.R.S. § 7-80-703, the Court hereby orders that Mr. Herron’s
membership interest in Redwood Medical LLC, a Colorado limited liability company, be charged
with payment of the unsatisfied amount of the $2,931,208.94 Judgment with interest thereon.
4)
Redwood Medical LLC is hereby:
(a)
Required to pay to Plaintiff Mr. Herron’s full distributive share, whether or not Mr.
Herron normally draws his` full share due.
(b)
Prohibited from making any loans to any person until the Judgment is fully
satisfied.
(c)
Prohibited from acquiring any capital assets.
(d)
Prohibited from selling or encumbering any property belonging to the limited
partnership or limited liability company.
(e)
Required to deliver all financial records from the past three years, including
balance sheets, current accounting in electronic and paper form, tax returns,
operating agreements, and books of account to Plaintiff’s counsel.
IT IS SO ORDERED this ______ day of November 2024.
________________________
DISTRICT COURT JUDGE
________
JUDGE
GE
G
DATED December 29, 2024
XXXXXXXXXXXXXXXXXXX
EXHIBIT I
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Adams County, Colorado, District Court
Adams County Justice Center
1100 Judicial Center Dr.
Brighton, CO 80601
(303) 659-1161
Plaintiff: MidCountry Bank
v.
Defendants: Freeport Elk River LLC, Brent Herron,
and Michelle Herron.
COURT USE ONLY
Case Number: 2024CV31629
Courtroom C
CHARGING ORDER AGAINST LIVING WELL DESIGN USA LLC PURSUANT TO
C.R.S. § 7-80-703
Plaintiff MidCountry Bank (the “Bank”) has moved for a charging order on Defendant
Michelle Herron’s (“Ms. Herron’s”) membership interest in Living Well Design USA LLC, 2153
S. Dayton St., Denver, CO 80231, a Colorado limited liability company (“Living Well Design”),
pursuant to C.R.S. § 7-80-703:
1)
By Notice of Filing of Foreign Judgment dated October 31, 2024, this Court entered
a judgment in favor of the Bank against Freeport Elk River LLC, Brent Herron, and Michelle
Herron in the amount of $2,931,208.94, plus interest at the rate of 8% per annum (the “Judgment”).
The Judgment is now collectible, as the stay of C.R.S. § 13-53-104(3) has expired.
2)
C.R.S. § 7-80-703 provides:
On application to a court of competent jurisdiction by any judgment creditor of a
member, the court may charge the membership interest of the member with
payment of the unsatisfied amount of the judgment with interest thereon and may
then or later appoint a receiver of the member's share of the profits and of any other
money due or to become due to the member in respect of the limited liability
company and make all other orders, directions, accounts, and inquiries that the
debtor member might have made, or that the circumstances of the case may require.
To the extent so charged, except as provided in this section, the judgment creditor
has only the rights of an assignee or transferee of the membership interest. The
membership interest charged may be redeemed at any time before foreclosure. If
the sale is directed by the court, the membership interest may be purchased without
causing a dissolution with separate property by any one or more of the members.
DATE FILED
December 29, 2024 5:33 PM
CASE NUMBER: 2024CV31629
EXHIBIT I
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With the consent of all members whose membership interests are not being charged
or sold, the membership interest may be purchased without causing a dissolution
with property of the limited liability company. This article shall not deprive any
member of the benefit of any exemption laws applicable to the member's
membership interest.
3)
Pursuant to C.R.S. § 7-80-703, the Court hereby orders that Ms. Herron’s
membership interest in Living Well Design USA LLC be charged with payment of the unsatisfied
amount of the $2,931,208.94 Judgment with interest thereon.
4)
Living Well Design USA LLC is hereby:
(a)
Required to pay to Plaintiff Ms. Herron’s full distributive share, whether or not
Ms. Herron normally draws her full share due.
(b)
Prohibited from making any loans to any person until the Judgment is fully
satisfied.
(c)
Prohibited from acquiring any capital assets.
(d)
Prohibited from selling or encumbering any property belonging to the limited
partnership or limited liability company.
(e)
Required to deliver all financial records from the past three years, including
balance sheets, current accounting in electronic and paper form, tax returns,
operating agreements, and books of account to Plaintiff’s counsel.
IT IS SO ORDERED this ______ day of November 2024.
________________________
DISTRICT COURT JUDGE
_______
_
JUDGE
GE
GE
GE
GE
GE
GE
GE
GE
GE
GE
DATED December 29, 2024
XXXXXXXXXXXXXXXXXXXX
EXHIBIT I
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Adams County, Colorado, District Court
Adams County Justice Center
1100 Judicial Center Dr.
Brighton, CO 80601
(303) 659-1161
Plaintiff: MidCountry Bank
v.
Defendants: Freeport Elk River LLC, Brent Herron,
and Michelle Herron.
COURT USE ONLY
Case Number: 2024CV31629
Courtroom C
CHARGING ORDER AGAINST SIMPLY STYLED USA LLC PURSUANT TO C.R.S. §
7-80-703
Plaintiff MidCountry Bank (the “Bank”) has moved for a charging order on Defendants
Brent Herron’s (“Mr. Herron”) and Michelle Herron’s (“Ms. Herron’s”) membership interest in
Simply Styled USA LLC, a Colorado limited liability company, 2153 S. Dayton St., Denver, CO
80231 (“Simply Styled”), pursuant to C.R.S. § 7-80-703:
1)
By Notice of Filing of Foreign Judgment dated October 31, 2024, this Court entered
a judgment in favor of the Bank against Freeport Elk River LLC, Brent Herron, and Michelle
Herron in the amount of $2,931,208.94, plus interest at the rate of 8% per annum (the “Judgment”).
The Judgment is now collectible, as the stay of C.R.S. § 13-53-104(3) has expired.
2)
C.R.S. § 7-80-703 provides:
On application to a court of competent jurisdiction by any judgment creditor of a
member, the court may charge the membership interest of the member with
payment of the unsatisfied amount of the judgment with interest thereon and may
then or later appoint a receiver of the member's share of the profits and of any other
money due or to become due to the member in respect of the limited liability
company and make all other orders, directions, accounts, and inquiries that the
debtor member might have made, or that the circumstances of the case may require.
To the extent so charged, except as provided in this section, the judgment creditor
has only the rights of an assignee or transferee of the membership interest. The
membership interest charged may be redeemed at any time before foreclosure. If
the sale is directed by the court, the membership interest may be purchased without
causing a dissolution with separate property by any one or more of the members.
DATE FILED
December 29, 2024 5:32 PM
CASE NUMBER: 2024CV31629
EXHIBIT I
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With the consent of all members whose membership interests are not being charged
or sold, the membership interest may be purchased without causing a dissolution
with property of the limited liability company. This article shall not deprive any
member of the benefit of any exemption laws applicable to the member's
membership interest.
3)
Pursuant to C.R.S. § 7-80-703, the Court hereby orders that Mr. and Ms. Herron’s
membership interests in Simply Styled USA LLC are charged with payment of the unsatisfied
amount of the $2,931,208.94 Judgment with interest thereon.
4)
Simply Styled USA LLC is hereby:
(a)
Required to pay to Plaintiff Mr. and Ms. Herron’s full distributive share, whether
or not Mr. and Ms. Herron normally draws their full share due.
(b)
Prohibited from making any loans to any person until the Judgment is fully
satisfied.
(c)
Prohibited from acquiring any capital assets.
(d)
Prohibited from selling or encumbering any property belonging to the limited
partnership or limited liability company.
(e)
Required to deliver all financial records from the past three years, including
balance sheets, current accounting in electronic and paper form, tax returns,
operating agreements, and books of account to Plaintiff’s counsel.
IT IS SO ORDERED this ______ day of November 2024.
________________________
DISTRICT COURT JUDGE
______
_ __
JUDGE
GE
GE
G
DATED December 29, 2024
XXXXXXXXXXXXXXXXXXX
EXHIBIT I
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EXHIBIT J
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MidCountry Bank
v.
Freeport Elk River LLC
Brent S. Herron
February 03, 2025
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Page 1
DISTRICT COURT, ADAMS COUNTY, COLORADO
Case No. 2024-CV-31629
__________________________________________________
DEPOSITION OF BRENT S. HERRON
February 3, 2025
__________________________________________________
MIDCOUNTRY BANK,
Plaintiff,
vs.
FREEPORT ELK RIVER LLC, BRENT HERRON,
and MICHELLE HERRON,
Defendants.
__________________________________________________
APPEARANCES:
· · ·RINGENBERG & BELLER, P.C.
· · · · · ·By Richard D. Beller, Esq.
· · · · · · · 125 South Howes Street, 3rd Floor
· · · · · · · Fort Collins, Colorado· 80521
· · · · · · · · Appearing on behalf of Plaintiff
· · ·ATLAS LAW FIRM P.C
· · · · · ·By Edward Levy, Esq.
· · · · · · · 501 South Cherry Street, Suite 1100
· · · · · · · Denver, Colorado· 80246
· · · · · · · · Appearing on behalf of Defendants
Page 2
·1· · · · · · · Pursuant to Notice and the Colorado
·2· ·Rules of Civil Procedure, the deposition of
·3· ·BRENT S. HERRON, called by Plaintiff, was taken
·4· ·on Monday, February 3, 2025, commencing at
·5· ·10:14 a.m., at 125 South Howes Street, 3rd Floor,
·6· ·Fort Collins, Colorado, before Tracy L. Harris,
·7· ·Certified Realtime Reporter, Registered Merit
·8· ·Reporter, within and for the State of Colorado.
·9
10
11· · · · · · · · · · · · I N D E X
12· ·DEPOSITION OF BRENT S. HERRON
13· ·EXAMINATION BY:· · · · · · · · · · · · · · · ·PAGE
14· · · · Mr. Beller· · · · · · · · · · · · · · · · · 4
15· · · · Mr. Levy· · · · · · · · · · · · · · · · · ·--
16
17· ·EXHIBITS· · · · · · · · · · · · ·INITIAL REFERENCE
18· · Exhibit 1 Letter dated 12/13/2024 from Kris· · 60
· · · · · · · · Becker to Brent Herron, Michelle
19· · · · · · · Herron, Re: Personal Statement of
· · · · · · · · Financial Position (PFS)
20
· · · Exhibit 2 Redwood Medical LLC Profit and Loss· 73
21· · · · · · · January - October, 2024
22· · Exhibit 3 Redwood Medical LLC Balance Sheet· · 80
· · · · · · · · As of October 31, 2024
23
· · · Exhibit 4 Living Well Design Profit and Loss· ·95
24· · · · · · · January - October, 2024
25
Page 3
·1· · · · · · · · · I N D E X (Continued)
·2· ·EXHIBITS· · · · · · · · · · · · ·INITIAL REFERENCE
·3· · Exhibit 5 Living Well Design Balance Sheet· · ·97
· · · · · · · · As of October 31, 2024
·4
· · · Exhibit 6 Simply Styled USA LLC Profit and· · 100
·5· · · · · · · Loss, January - October, 2024
·6· · Exhibit 7 Simply Styled USA LLC Balance· · · ·104
· · · · · · · · Sheet As of October 31, 2024
·7
· · · Exhibit 8 American Bank Personal Financial· · 112
·8· · · · · · · Statement
· · · · · · · · Bates Nos. NORTHWOODS
·9· · Exhibit 9 Petition for Dissolution of· · · · ·121
· · · · · · · · Marriage with Children Pursuant
10· · · · · · · to 14-10-106, C.R.S.
11· ·Exhibit 10 Charging Order Against Redwood· · · 121
· · · · · · · · Medical LLC Pursuant to C.R.S.
12· · · · · · · 7-80-703
13
14· ·INFORMATION REQUESTED
15· ·Bookkeeper's name· · · · · · · · · · · · · · · ·86
16· ·Financials for Redwood· · · · · · · · · · · · ·124
17· ·Answer to writ of garnishment for Redwood· · · 133
18· ·Financial information regarding charging· · · ·124
· · ·orders for Simply Styled
19
20
21
22
23
24
25
Page 4
·1· · · · · · · · · ·P R O C E E D I N G S
·2· · · · · · · · · · BRENT S. HERRON,
·3· ·being first duly sworn in the above cause, was
·4· ·examined and testified as follows:
·5· · · · · · · · · · · ·EXAMINATION
·6· ·BY MR. BELLER:
·7· · · · Q· · ·Okay.· Have you had your deposition
·8· ·taken before?
·9· · · · A· · ·No.
10· · · · Q· · ·Okay.· Well, first off --· I'll give
11· ·you a couple warnings that are just common to any
12· ·deposition.· First off, even though we're in an
13· ·informal proceeding today, we're in a conference
14· ·room and your testimony here today is under oath
15· ·and has the same force and effect as if it were
16· ·given in a court of law.
17· · · · · · · Do you understand that?
18· · · · A· · ·Yes.
19· · · · Q· · ·Okay.· And the next few rules have to
20· ·do with the fact that our court reporter is trying
21· ·to transcribe what we say, so it's really
22· ·important that we not talk over one another.· I'll
23· ·wait until you finish your answer and then,
24· ·likewise, please wait until I finish my question
25· ·before you answer because she can't transcribe
EXHIBIT J
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Meadors Court Reporting
Brent S. Herron· - 02/03/2025
Meadors Court Reporting
Brent S. Herron· - 02/03/2025
1 to 4
YVer1f
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Page 9
·1· · · · Q· · ·Do you have any renters at all?
·2· · · · A· · ·I --· No.
·3· · · · Q· · ·Is anyone paying you rent for
·4· ·commercial or residential real property?
·5· · · · A· · ·No.
·6· · · · Q· · ·And what's your current occupation?
·7· · · · · · · MR. LEVY:· Objection, relevance to
·8· ·assets and income.
·9· · · · A· · ·I mean, you already know I'm a
10· ·physician.
11· · · · Q· · ·(By Mr. Beller)· Okay.· What kind of
12· ·physician are you?
13· · · · A· · ·Family medicine is my specialty.
14· · · · Q· · ·And Redwood is your employer?
15· · · · · · · MR. LEVY:· Objection, form.
16· · · · Q· · ·(By Mr. Beller)· Is that right?
17· · · · A· · ·What was the question?
18· · · · Q· · ·Redwood is your employer.· Is your
19· ·employer Redwood?
20· · · · A· · ·No.
21· · · · Q· · ·Who's your employer?
22· · · · A· · ·I don't have an employer.· Well, I
23· ·guess define "employer."
24· · · · Q· · ·Are you employed?
25· · · · A· · ·No.
Page 10
·1· · · · Q· · ·Do you own Redwood?
·2· · · · A· · ·From the basis of what I know to be an
·3· ·employee, I'm not an employee of anybody.
·4· · · · Q· · ·Okay.· Do you own 100 percent of
·5· ·Redwood?
·6· · · · A· · ·Yes.
·7· · · · Q· · ·What is the full name of Redwood?
·8· · · · A· · ·Redwood Medical, LLC.
·9· · · · Q· · ·Are you paid a regular wage at Redwood?
10· · · · A· · ·No.
11· · · · Q· · ·Do you take distributions?
12· · · · A· · ·No.
13· · · · Q· · ·Does Redwood pay you anything by any
14· ·means?
15· · · · A· · ·No.
16· · · · · · · MR. LEVY:· Objection to form, vague.
17· · · · Q· · ·(By Mr. Beller)· Do you take profits
18· ·from Redwood?
19· · · · A· · ·No.
20· · · · Q· · ·And are you paid a salary or wage?
21· · · · A· · ·I think you just asked that.
22· · · · · · · MR. LEVY:· Objection, asked and
23· ·answered.
24· · · · Q· · ·(By Mr. Beller)· Okay.· Do you get, in
25· ·addition to your salary, any other benefits or
Page 11
·1· ·fees, commissions, stock options, profit sharing
·2· ·contributions or bonuses from Redwood?
·3· · · · A· · ·No.
·4· · · · · · · MR. LEVY:· Objection to form.
·5· · · · · · · Give me a chance to object, please.
·6· · · · Q· · ·(By Mr. Beller)· Do you take profit
·7· ·sharing from Redwood?
·8· · · · A· · ·I thought you just asked that.
·9· · · · Q· · ·So you're saying you get zero income
10· ·from Redwood?
11· · · · A· · ·You're saying right now?
12· · · · Q· · ·Since --· Since October 15, 2024, have
13· ·you received any income from Redwood?
14· · · · · · · MR. LEVY:· Objection to form.
15· · · · A· · ·To be honest, I really don't think so.
16· ·Yeah, I . . .
17· · · · Q· · ·(By Mr. Beller)· When was the last time
18· ·Redwood paid you money?
19· · · · A· · ·I would have to look.
20· · · · Q· · ·Was it before October 15, 2024?
21· · · · · · · MR. LEVY:· If you know, you can answer.
22· · · · A· · ·Was it before --
23· · · · Q· · ·(By Mr. Beller)· Yes.
24· · · · A· · ·-- or have I been paid since then?
25· · · · Q· · ·Yeah.· Have you been paid since then by
Page 12
·1· ·Redwood?
·2· · · · · · · MR. LEVY:· Objection, asked and
·3· ·answered.
·4· · · · A· · ·I've --· Yes, I probably have at some
·5· ·point.· I'm not sure the last time I've been paid.
·6· ·You said am I currently getting distributions, and
·7· ·I am not.
·8· · · · Q· · ·(By Mr. Beller)· How much did Redwood
·9· ·pay you by any means in 2024?
10· · · · A· · ·Extremely variable.
11· · · · Q· · ·I just mean total.
12· · · · A· · ·I believe I gave you a profit and loss.
13· ·I don't know exactly what my distribution was.
14· · · · Q· · ·Can you approximate?
15· · · · · · · MR. LEVY:· Objection, calls for
16· ·speculation.
17· · · · A· · ·I really can't, to be honest.
18· · · · Q· · ·(By Mr. Beller)· How often do you take
19· ·distributions from Redwood?
20· · · · A· · ·Extremely variable.
21· · · · Q· · ·When was the last time you took a
22· ·distribution from Redwood?
23· · · · A· · ·I think you already asked that.· I said
24· ·I'm not sure.· Not recently.· We haven't had any
25· ·actual money.
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Q· · ·Do you own Redwood?
·2· · · · A· · ·From the basis of what I know to be an
·3· ·employee, I'm not an employee of anybody.
·4· · · · Q· · ·Okay.· Do you own 100 percent of
·5· ·Redwood?
·6· · · · A· · ·Yes.
·7· · · · Q· · ·What is the full name of Redwood?
·8· · · · A· · ·Redwood Medical, LLC.
·9· · · · Q· · ·Are you paid a regular wage at Redwood?
10· · · · A· · ·No.
11· · · · Q· · ·Do you take distributions?
12· · · · A· · ·No.
13· · · · Q· · ·Does Redwood pay you anything by any
14· ·means?
15· · · · A· · ·No.
16· · · · · · · MR. LEVY:· Objection to form, vague.
17· · · · Q· · ·(By Mr. Beller)· Do you take profits
18· ·from Redwood?
19· · · · A· · ·No.
20· · · · Q· · ·And are you paid a salary or wage?
21· · · · A· · ·I think you just asked that.
22· · · · · · · MR. LEVY:· Objection, asked and
23· ·answered.
24· · · · Q· · ·(By Mr. Beller)· Okay.· Do you get, in
25· ·addition to your salary, any other benefits or
Page 11
Page 12
·1· ·fees, commissions, stock options, profit sharing
·1· ·Redwood?
·2· ·contributions or bonuses from Redwood?
·2· · · · · · · MR. LEVY:· Objection, asked and
·3· · · · A· · ·No.
·3· ·answered.
·4· · · · · · · MR. LEVY:· Objection to form.
·4· · · · A· · ·I've --· Yes, I probably have at some
·5· · · · · · · Give me a chance to object, please.
·5· ·point.· I'm not sure the last time I've been paid.
·6· · · · Q· · ·(By Mr. Beller)· Do you take profit
·6· ·You said am I currently getting distributions, and
·7· ·sharing from Redwood?
·7· ·I am not.
·8· · · · A· · ·I thought you just asked that.
·8· · · · Q· · ·(By Mr. Beller)· How much did Redwood
·9· · · · Q· · ·So you're saying you get zero income
·9· ·pay you by any means in 2024?
10· ·from Redwood?
10· · · · A· · ·Extremely variable.
11· · · · A· · ·You're saying right now?
11· · · · Q· · ·I just mean total.
12· · · · Q· · ·Since --· Since October 15, 2024, have
12· · · · A· · ·I believe I gave you a profit and loss.
13· ·you received any income from Redwood?
13· ·I don't know exactly what my distribution was.
14· · · · · · · MR. LEVY:· Objection to form.
14· · · · Q· · ·Can you approximate?
15· · · · A· · ·To be honest, I really don't think so.
15· · · · · · · MR. LEVY:· Objection, calls for
16· ·Yeah, I . . .
16· ·speculation.
17· · · · Q· · ·(By Mr. Beller)· When was the last time
17· · · · A· · ·I really can't, to be honest.
18· ·Redwood paid you money?
18· · · · Q· · ·(By Mr. Beller)· How often do you take
19· · · · A· · ·I would have to look.
19· ·distributions from Redwood?
20· · · · Q· · ·Was it before October 15, 2024?
20· · · · A· · ·Extremely variable.
21· · · · · · · MR. LEVY:· If you know, you can answer.
21· · · · Q· · ·When was the last time you took a
22· · · · A· · ·Was it before --
22· ·distribution from Redwood?
23· · · · Q· · ·(By Mr. Beller)· Yes.
23· · · · A· · ·I think you already asked that.· I said
24· · · · A· · ·-- or have I been paid since then?
24· ·I'm not sure.· Not recently.· We haven't had any
25· · · · Q· · ·Yeah.· Have you been paid since then by
25· ·actual money.
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·1· · · · Q· · ·Since October 15, 2024, list all
·2· ·sources of income you've received from anybody.
·3· · · · · · · MR. LEVY:· Objection to form.
·4· · · · · · · THE DEPONENT:· So that means --· So you
·5· ·objected.· Does that mean I don't have to answer?
·6· · · · · · · MR. LEVY:· No.· You have to answer.
·7· ·It's an objection to form.
·8· · · · · · · Can we go off the record for a second?
·9· ·Can I step outside with him for a second?
10· · · · · · · MR. BELLER:· Sure.· That's fine if you
11· ·want to explain the objections, that's okay with
12· ·me.
13· · · · · · · (Recess from 10:24 a.m. to 10:25 a.m.)
14· · · · · · · MR. BELLER:· Can you please read back
15· ·the last question?
16· · · · · · · (Last question read.)
17· · · · A· · ·I don't recall.
18· · · · · · · MR. LEVY:· I'm going to object to form
19· ·anyway on the question, but --· Yeah.· If you
20· ·could define "income" better by maybe asking for
21· ·some examples.
22· · · · Q· · ·(By Mr. Beller)· So here I'm using
23· ·"income" the way the IRS would use "income."· It's
24· ·a defined term.· You have to put it on your tax
25· ·return.
Page 14
·1· · · · · · · Have you received any income from
·2· ·anybody in 2025 for month-ending 2025?
·3· · · · A· · ·I don't recall.· No, I don't think so.
·4· · · · Q· · ·Since October 15, 2024, have you
·5· ·received any income?
·6· · · · · · · MR. LEVY:· Objection to form.
·7· · · · A· · ·I really don't think so.
·8· · · · Q· · ·(By Mr. Beller)· What bank accounts do
·9· ·you have?
10· · · · A· · ·Well, I had the Wells Fargo one, but
11· ·there's no -- or there's zero dollars in there, as
12· ·you know.
13· · · · Q· · ·Okay.· What other bank accounts do you
14· ·have?
15· · · · A· · ·Business bank accounts.
16· · · · Q· · ·What business bank accounts do you
17· ·have?
18· · · · A· · ·There is a U.S. Bank account for the --
19· ·for Redwood Medical.
20· · · · Q· · ·Where is that account?
21· · · · A· · ·Where?
22· · · · Q· · ·Yeah.
23· · · · A· · ·I just said U.S. Bank.
24· · · · Q· · ·Yeah, but where?· What's the address
25· ·generally, the location?
Page 15
·1· · · · A· · ·I mean, there's a lot of U.S. Banks.
·2· · · · Q· · ·What's the one you use?· What's --
·3· ·What's your local branch?
·4· · · · A· · ·I really don't have a local branch.
·5· ·Like, there's not one that I go to.· I don't even
·6· ·know if --
·7· · · · Q· · ·Is it near the business?
·8· · · · A· · ·Well, I just said there's not one -- I
·9· ·can't answer that.· There's not one that I use.
10· · · · Q· · ·Okay.
11· · · · A· · ·I mean . . .
12· · · · Q· · ·Besides Wells Fargo and then U.S. Bank
13· ·for Redwood, what other bank accounts do you use?
14· · · · A· · ·There's a Novo Bank account.
15· · · · Q· · ·Where is Novo Bank?
16· · · · A· · ·It's an online only bank.
17· · · · Q· · ·Where is it based?
18· · · · A· · ·I don't know.
19· · · · Q· · ·And is that a personal bank account?
20· · · · A· · ·No.
21· · · · Q· · ·Business?
22· · · · A· · ·(Deponent nodded head.)
23· · · · Q· · ·For Redwood?
24· · · · · · · You nodded.
25· · · · A· · ·I'm sorry.· Yes.
Page 16
·1· · · · Q· · ·Is that for Redwood?
·2· · · · A· · ·Yes.
·3· · · · Q· · ·Do you have any other personal bank
·4· ·accounts?
·5· · · · A· · ·No.
·6· · · · Q· · ·So you have a Wells Fargo account that
·7· ·has zero dollars, but that's it for you
·8· ·personally?
·9· · · · A· · ·There used to be an Ally Bank account
10· ·that I used, but there's zero dollars in there
11· ·because I haven't used it in years.
12· · · · Q· · ·Okay.· For Redwood, you said U.S. Bank
13· ·and Novo bank.· Does Redwood have any other bank
14· ·accounts?
15· · · · A· · ·No.
16· · · · Q· · ·Do you have any brokerage or investment
17· ·accounts?
18· · · · A· · ·Through the business?
19· · · · Q· · ·First just you individually.
20· · · · A· · ·Other than a 401(k), no.
21· · · · Q· · ·Where's your 401(k)?
22· · · · A· · ·I actually don't recall.· They switched
23· ·right before I left.· That's probably something I
24· ·should look into.
25· · · · Q· · ·What was the old provider?
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Page 14
·1· · · · Q· · ·Since October 15, 2024, list all
·1· · · · · · · Have you received any income from
·2· ·sources of income you've received from anybody.
·2· ·anybody in 2025 for month-ending 2025?
·3· · · · · · · MR. LEVY:· Objection to form.
·3· · · · A· · ·I don't recall.· No, I don't think so.
·4· · · · · · · THE DEPONENT:· So that means --· So you
·4· · · · Q· · ·Since October 15, 2024, have you
·5· ·objected.· Does that mean I don't have to answer?
·5· ·received any income?
·6· · · · · · · MR. LEVY:· No.· You have to answer.
·6· · · · · · · MR. LEVY:· Objection to form.
·7· ·It's an objection to form.
·7· · · · A· · ·I really don't think so.
·8· · · · · · · Can we go off the record for a second?
·9· ·Can I step outside with him for a second?
10· · · · · · · MR. BELLER:· Sure.· That's fine if you
11· ·want to explain the objections, that's okay with
12· ·me.
13· · · · · · · (Recess from 10:24 a.m. to 10:25 a.m.)
14· · · · · · · MR. BELLER:· Can you please read back
15· ·the last question?
16· · · · · · · (Last question read.)
17· · · · A· · ·I don't recall.
18· · · · · · · MR. LEVY:· I'm going to object to form
19· ·anyway on the question, but --· Yeah.· If you
20· ·could define "income" better by maybe asking for
21· ·some examples.
22· · · · Q· · ·(By Mr. Beller)· So here I'm using
23· ·"income" the way the IRS would use "income."· It's
24· ·a defined term.· You have to put it on your tax
25· ·return.
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Page 21
·1· · · · Q· · ·I already asked about a trust,
·2· ·insurance policies --· Okay.· So other than the
·3· ·401(k) you mentioned, are you a beneficiary under
·4· ·the terms of any pension plans or profit sharing
·5· ·agreements?
·6· · · · A· · ·No.
·7· · · · Q· · ·Okay.· Besides Redwood, since 2023,
·8· ·what sources of income have you had?
·9· · · · · · · MR. LEVY:· Objection, asked and
10· ·answered.
11· · · · · · · MR. BELLER:· Not since 2023.
12· · · · A· · ·Nothing's different from my answer for
13· ·2023.
14· · · · Q· · ·(By Mr. Beller)· So your only source of
15· ·income since 2023 has been from Redwood?
16· · · · A· · ·Correct.· Well, I said that I worked at
17· ·Kaiser, actually, so I think that was answered.
18· · · · Q· · ·So it's just Kaiser and Redwood, and
19· ·that's it?
20· · · · A· · ·Correct.
21· · · · Q· · ·Okay.· What is Freeport Elk River, LLC?
22· · · · A· · ·That was the LLC that owned the
23· ·commercial real estate.
24· · · · Q· · ·Where was that commercial real estate?
25· · · · A· · ·Minnesota.
Page 22
·1· · · · Q· · ·Did Freeport Elk River, LLC own
·2· ·anything else?
·3· · · · A· · ·No.
·4· · · · Q· · ·Who owned Freeport Elk River, LLC?
·5· · · · · · · MR. LEVY:· Objection to form, Rule 69
·6· ·assets and income.
·7· · · · A· · ·Michelle and I.
·8· · · · Q· · ·(By Mr. Beller)· Were you 50-50 owners?
·9· · · · · · · MR. LEVY:· Objection, spousal
10· ·privilege.
11· · · · A· · ·I don't think so.· I --· I think there
12· ·was a different split.
13· · · · Q· · ·(By Mr. Beller)· Okay.· What was your
14· ·split?
15· · · · A· · ·I'm not sure.
16· · · · Q· · ·Did anyone else own an interest in that
17· ·LLC?
18· · · · A· · ·No.
19· · · · Q· · ·Did you own the majority?
20· · · · A· · ·I don't think so.
21· · · · Q· · ·You don't think so.· She --· Did she
22· ·own the majority?
23· · · · A· · ·Someone had majority, but --· I mean,
24· ·my understanding is that we were married.· I'm not
25· ·a divorce attorney here, but I'm pretty sure
Page 23
·1· ·everything's owned 50-50.· You guys are the
·2· ·lawyers, though, so . . .
·3· · · · Q· · ·Okay.· Does Freeport Elk River, LLC
·4· ·have any assets?
·5· · · · A· · ·Currently, no.
·6· · · · Q· · ·Does it own any real property?
·7· · · · A· · ·No.
·8· · · · Q· · ·Any personal property?
·9· · · · A· · ·No.
10· · · · Q· · ·Does it have any bank accounts?
11· · · · A· · ·I can't answer that, actually.· I don't
12· ·know if MidCountry shut it down.
13· · · · Q· · ·Did Freeport have a bank account at
14· ·MidCountry?
15· · · · A· · ·Yes.
16· · · · Q· · ·Did it have any bank accounts anywhere
17· ·else?
18· · · · A· · ·No.
19· · · · Q· · ·What is Living Well Design?
20· · · · A· · ·That is a business.
21· · · · Q· · ·Do you own any interest in that
22· ·business?
23· · · · A· · ·Yes.
24· · · · Q· · ·How much do you own?
25· · · · A· · ·I believe 50 percent.
Page 24
·1· · · · Q· · ·What does that business do?
·2· · · · A· · ·It is a home staging company for people
·3· ·trying to sell their house.
·4· · · · Q· · ·Since 2023, have you received any money
·5· ·from Living Well Design?
·6· · · · A· · ·No.
·7· · · · Q· · ·When was Living Well Design formed?
·8· · · · A· · ·Sometime last year.
·9· · · · Q· · ·What is your role with Living Well
10· ·Design?
11· · · · A· · ·Absolutely nothing.
12· · · · Q· · ·Is that Michelle's business?
13· · · · A· · ·I believe so.
14· · · · Q· · ·But you own half?
15· · · · A· · ·Correct.
16· · · · Q· · ·But you haven't --· Have you ever
17· ·received any money from Living Well Design?
18· · · · A· · ·Nope.
19· · · · Q· · ·What is Simply Styled USA, LLC?
20· · · · A· · ·It's a business.
21· · · · Q· · ·Do you own part of that business?
22· · · · A· · ·Yes.
23· · · · Q· · ·How much do you own?
24· · · · A· · ·50 percent.
25· · · · Q· · ·What kind of business is Simply Styled
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Q· · ·Since 2023, have you received any money
·5· ·from Living Well Design?
·6· · · · A· · ·No.
·7· · · · Q· · ·When was Living Well Design formed?
·8· · · · A· · ·Sometime last year.
·9· · · · Q· · ·What is your role with Living Well
10· ·Design?
11· · · · A· · ·Absolutely nothing.
12· · · · Q· · ·Is that Michelle's business?
13· · · · A· · ·I believe so.
14· · · · Q· · ·But you own half?
15· · · · A· · ·Correct.
16· · · · Q· · ·But you haven't --· Have you ever
17· ·received any money from Living Well Design?
18· · · · A· · ·Nope.
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Page 25
·1· ·engaged in?
·2· · · · A· · ·A home remodeling business.
·3· · · · Q· · ·What is your role in that business?
·4· · · · A· · ·Trying to make it not lose as much
·5· ·money as it is currently.
·6· · · · Q· · ·Do you have a title?
·7· · · · A· · ·No.
·8· · · · Q· · ·Since 2023, have you received money
·9· ·from Simply Styled?
10· · · · A· · ·I wish.
11· · · · Q· · ·When was Simply Styled formed?
12· · · · A· · ·Sometime last year.
13· · · · Q· · ·And you indicated that the business is
14· ·losing money?
15· · · · A· · ·Correct.
16· · · · Q· · ·So with the last one, you said that --
17· ·With Living Well Design, you said that you had
18· ·absolutely nothing to do with the business and
19· ·that, basically, it was your wife's business.
20· · · · · · · It sounds like with Simply Styled, you
21· ·have more of a role with that entity; is that
22· ·right?
23· · · · A· · ·Yes.
24· · · · Q· · ·What do you do?
25· · · · A· · ·I'm trying to turn it back around. I
Page 26
·1· ·mean, it was a thriving business when it was
·2· ·purchased.
·3· · · · Q· · ·When did you purchase it?
·4· · · · A· · ·January 1st, I believe, of 2024.· Maybe
·5· ·a few days before 2024.
·6· · · · Q· · ·Does anyone else --· You said you own
·7· ·about 50 percent.· Does anyone else besides you
·8· ·and your wife own an interest in Simply Styled?
·9· · · · A· · ·No.
10· · · · Q· · ·What is your wife's role with that
11· ·business?
12· · · · A· · ·Nothing.
13· · · · Q· · ·So this is 100 percent your business as
14· ·far as the operation?
15· · · · A· · ·Well, we just said --· Well, I mean,
16· ·she says she's going to try to help market for it
17· ·but does not, you know, so . . .
18· · · · Q· · ·So as far as the business activity
19· ·that's taking place, that's your responsibility.
20· · · · · · · Is that fair?
21· · · · A· · ·That would be fair.
22· · · · Q· · ·Do you have a title with Simply Styled?
23· · · · A· · ·No.
24· · · · Q· · ·Does Simply Styled have any employees?
25· · · · A· · ·No.
Page 27
·1· · · · Q· · ·Does Living Well Design have any
·2· ·employees?
·3· · · · A· · ·As we just mentioned, I don't know how
·4· ·that business is being run.
·5· · · · Q· · ·I have the same question for Freeport.
·6· ·Does Freeport have any employees?
·7· · · · A· · ·No.
·8· · · · Q· · ·Do you own any other businesses?
·9· · · · A· · ·No.
10· · · · Q· · ·What is BBSC Endurance?
11· · · · A· · ·That is a business that I owned
12· ·previously.
13· · · · Q· · ·What kind of a business was that?
14· · · · A· · ·It was a running triathlon event
15· ·production company.
16· · · · Q· · ·Is BBSC Endurance still in business?
17· · · · A· · ·I believe so.
18· · · · Q· · ·Did you sell it?
19· · · · A· · ·Yes.
20· · · · Q· · ·How much did you sell it for?
21· · · · A· · ·I don't recall the exact number.
22· · · · Q· · ·When did you sell it?
23· · · · A· · ·I would be speculating.· It was around
24· ·when my kids were born, and they're three and
25· ·four.
Page 28
·1· · · · Q· · ·Okay.· So is it fair to say that you
·2· ·sold BBSC, LLC roughly three to four years ago or
·3· ·before?
·4· · · · A· · ·Yeah.
·5· · · · Q· · ·Okay.· How much did you sell it for?
·6· · · · A· · ·I said I don't recall exactly.
·7· · · · Q· · ·Do you have any current interest in
·8· ·BBSC Endurance?
·9· · · · A· · ·No.
10· · · · Q· · ·How much of BBSC Endurance did you own?
11· · · · A· · ·100 percent.
12· · · · Q· · ·Since you sold it, have you been
13· ·involved in any way with BBSC Endurance?
14· · · · A· · ·No.
15· · · · Q· · ·Have you owned any other companies?
16· · · · A· · ·No.
17· · · · Q· · ·And then currently, as you sit here
18· ·today, do you own any companies other than the
19· ·ones mentioned?
20· · · · A· · ·No.
21· · · · Q· · ·Okay.· When I looked at real estate
22· ·records, I saw various LLCs that had owned
23· ·interests in real estate, specifically a few of
24· ·them that were in the Boulder area.· Do you still
25· ·own interests in any of those companies?
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·1· · · · Q· · ·Okay.· So is it fair to say that you
·2· ·sold BBSC, LLC roughly three to four years ago or
·3· ·before?
·4· · · · A· · ·Yeah.
·5· · · · Q· · ·Okay.· How much did you sell it for?
·6· · · · A· · ·I said I don't recall exactly.
·7· · · · Q· · ·Do you have any current interest in
·8· ·BBSC Endurance?
·9· · · · A· · ·No.
Q· · ·What is BBSC Endurance?
10· · · · Q· · ·How much of BBSC Endurance did you own?
11· · · · A· · ·That is a business that I owned
11· · · · A· · ·100 percent.
12· ·previously.
12· · · · Q· · ·Since you sold it, have you been
13· · · · Q· · ·What kind of a business was that?
13· ·involved in any way with BBSC Endurance?
14· · · · A· · ·It was a running triathlon event
14· · · · A· · ·No.
15· ·production company.
16· · · · Q· · ·Is BBSC Endurance still in business?
17· · · · A· · ·I believe so.
18· · · · Q· · ·Did you sell it?
19· · · · A· · ·Yes.
20· · · · Q· · ·How much did you sell it for?
21· · · · A· · ·I don't recall the exact number.
22· · · · Q· · ·When did you sell it?
23· · · · A· · ·I would be speculating.· It was around
24· ·when my kids were born, and they're three and
25· ·four.
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·1· · · · Q· · ·Since October 15, 2024, have you made
·2· ·any gifts of -- with a value of over $1,000?
·3· · · · A· · ·Define "gift."
·4· · · · Q· · ·Given something of value to somebody
·5· ·that's worth more than $1,000.
·6· · · · A· · ·I don't recall.· I don't think so.
·7· · · · Q· · ·Do you have any accident, health or
·8· ·life insurance?
·9· · · · A· · ·I have health insurance.
10· · · · Q· · ·Let's talk about --· Do you have any
11· ·life insurance?
12· · · · A· · ·The loans that we got made us get life
13· ·insurance, so, yeah.
14· · · · Q· · ·What kind of life insurance is that?
15· · · · A· · ·I believe it's called a term life
16· ·insurance.
17· · · · Q· · ·How much is the amount?
18· · · · A· · ·I don't know.
19· · · · Q· · ·Do you know if it was a million?
20· · · · A· · ·I think it was around the amount to
21· ·cover --· I don't know.
22· · · · Q· · ·Do you know if this life insurance is
23· ·still active?
24· · · · A· · ·I think so.
25· · · · Q· · ·Do you know if it has a cash surrender
Page 50
·1· ·value?
·2· · · · A· · ·I don't think so.
·3· · · · Q· · ·Does anyone else have life insurance on
·4· ·you?
·5· · · · A· · ·Not that I'm aware of.
·6· · · · Q· · ·Have you borrowed against any insurance
·7· ·policies?
·8· · · · A· · ·No.
·9· · · · Q· · ·What vehicles do you own?
10· · · · A· · ·I own a BMW.
11· · · · Q· · ·What kind of BMW?
12· · · · A· · ·i8.
13· · · · Q· · ·What's that?
14· · · · A· · ·i8.
15· · · · Q· · ·Okay.· What year?
16· · · · A· · ·2019.
17· · · · Q· · ·And is that in your name?
18· · · · A· · ·Yes.
19· · · · Q· · ·Is that leased, owned free and clear or
20· ·are you paying somebody for it?
21· · · · A· · ·I am paying somebody for it.
22· · · · Q· · ·Are you current on those payments?
23· · · · A· · ·I think so.
24· · · · Q· · ·So you paid a January --· Do you have
25· ·to pay monthly payments on that?
Page 51
·1· · · · A· · ·Yeah.
·2· · · · Q· · ·And you paid a January 2025 payment?
·3· · · · A· · ·I'm not sure.
·4· · · · Q· · ·You just said yes.
·5· · · · A· · ·Well, you said do I have a monthly
·6· ·payment.· Then you said do I think I'm current on
·7· ·it, and I said yes.
·8· · · · Q· · ·Where did that money come from?
·9· · · · A· · ·I don't know.
10· · · · Q· · ·What bank do you use to pay that
11· ·monthly payment?
12· · · · A· · ·I was paying by using Wells Fargo, but
13· ·there's no money in there.
14· · · · Q· · ·Do you use any other bank account to
15· ·pay that monthly payment?
16· · · · A· · ·No.
17· · · · Q· · ·What other cars do you own or what
18· ·other vehicles?
19· · · · A· · ·A Chevrolet Corvette.
20· · · · Q· · ·What year?
21· · · · A· · ·2020.
22· · · · Q· · ·Let's go back to the BMW.· What is the
23· ·approximate balance on the loan on the BMW?
24· · · · A· · ·I don't know.
25· · · · Q· · ·How much are the payments?
Page 52
·1· · · · A· · ·Expensive.· I don't know.· $2,000-ish.
·2· · · · Q· · ·$2000 a month?
·3· · · · A· · ·Yeah, -ish.
·4· · · · Q· · ·Are you making payments on the Chevy
·5· ·Corvette?
·6· · · · A· · ·Yes, I believe so.
·7· · · · Q· · ·How much are those payments?
·8· · · · A· · ·That, I have no idea.
·9· · · · Q· · ·Are you current on those payments?
10· · · · A· · ·I don't know.
11· · · · Q· · ·Do you know if you made a payment for
12· ·January 2025?
13· · · · A· · ·I don't know.
14· · · · Q· · ·Do you know how much that loan balance
15· ·is?
16· · · · A· · ·I don't know.
17· · · · Q· · ·So you have no idea what those monthly
18· ·payments are?
19· · · · A· · ·I have no idea.
20· · · · Q· · ·Do you know if you made a payment for
21· ·December 2024?
22· · · · A· · ·I don't know.
23· · · · Q· · ·Do you have any other vehicles?
24· · · · A· · ·Nope.· Not that are owned by me, no.
25· · · · Q· · ·Do you have any other vehicles owned by
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·1· ·value?
·2· · · · A· · ·I don't think so.
Q· · ·Do you have any accident, health or
·8· ·life insurance?
·9· · · · A· · ·I have health insurance.
10· · · · Q· · ·Let's talk about --· Do you have any
11· ·life insurance?
12· · · · A· · ·The loans that we got made us get life
13· ·insurance, so, yeah.
14· · · · Q· · ·What kind of life insurance is that?
15· · · · A· · ·I believe it's called a term life
16· ·insurance.
17· · · · Q· · ·How much is the amount?
18· · · · A· · ·I don't know.
19· · · · Q· · ·Do you know if it was a million?
20· · · · A· · ·I think it was around the amount to
21· ·cover --· I don't know.
22· · · · Q· · ·Do you know if this life insurance is
23· ·still active?
24· · · · A· · ·I think so.
25· · · · Q· · ·Do you know if it has a cash surrender
Q· · ·What vehicles do you own?
10· · · · A· · ·I own a BMW.
11· · · · Q· · ·What kind of BMW?
12· · · · A· · ·i8.
13· · · · Q· · ·What's that?
14· · · · A· · ·i8.
15· · · · Q· · ·Okay.· What year?
16· · · · A· · ·2019.
17· · · · Q· · ·And is that in your name?
18· · · · A· · ·Yes.
19· · · · Q· · ·Is that leased, owned free and clear or
20· ·are you paying somebody for it?
21· · · · A· · ·I am paying somebody for it.
22· · · · Q· · ·Are you current on those payments?
23· · · · A· · ·I think so.
24· · · · Q· · ·So you paid a January --· Do you have
25· ·to pay monthly payments on that?
Page 51
Page 52
·1· · · · A· · ·Yeah.
·1· · · · A· · ·Expensive.· I don't know.· $2,000-ish.
·2· · · · Q· · ·And you paid a January 2025 payment?
·2· · · · Q· · ·$2000 a month?
·3· · · · A· · ·I'm not sure.
·3· · · · A· · ·Yeah, -ish.
·4· · · · Q· · ·You just said yes.
·4· · · · Q· · ·Are you making payments on the Chevy
·5· · · · A· · ·Well, you said do I have a monthly
·5· ·Corvette?
·6· ·payment.· Then you said do I think I'm current on
·6· · · · A· · ·Yes, I believe so.
·7· ·it, and I said yes.
·7· · · · Q· · ·How much are those payments?
·8· · · · Q· · ·Where did that money come from?
·8· · · · A· · ·That, I have no idea.
·9· · · · A· · ·I don't know.
·9· · · · Q· · ·Are you current on those payments?
10· · · · Q· · ·What bank do you use to pay that
10· · · · A· · ·I don't know.
11· ·monthly payment?
11· · · · Q· · ·Do you know if you made a payment for
12· · · · A· · ·I was paying by using Wells Fargo, but
12· ·January 2025?
13· ·there's no money in there.
13· · · · A· · ·I don't know.
14· · · · Q· · ·Do you use any other bank account to
14· · · · Q· · ·Do you know how much that loan balance
15· ·pay that monthly payment?
15· ·is?
16· · · · A· · ·No.
16· · · · A· · ·I don't know.
17· · · · Q· · ·What other cars do you own or what
17· · · · Q· · ·So you have no idea what those monthly
18· ·other vehicles?
18· ·payments are?
19· · · · A· · ·A Chevrolet Corvette.
19· · · · A· · ·I have no idea.
20· · · · Q· · ·What year?
20· · · · Q· · ·Do you know if you made a payment for
21· · · · A· · ·2020.
21· ·December 2024?
22· · · · Q· · ·Let's go back to the BMW.· What is the
22· · · · A· · ·I don't know.
23· ·approximate balance on the loan on the BMW?
23· · · · Q· · ·Do you have any other vehicles?
24· · · · A· · ·I don't know.
24· · · · A· · ·Nope.· Not that are owned by me, no.
25· · · · Q· · ·How much are the payments?
25· · · · Q· · ·Do you have any other vehicles owned by
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·1· ·any other businesses?
·2· · · · A· · ·Yes.
·3· · · · Q· · ·What vehicles are those?
·4· · · · A· · ·The --· I have a 2020 Tesla that's
·5· ·owned by the Simply Styled.
·6· · · · Q· · ·What are the monthly payments on that
·7· ·Tesla?
·8· · · · A· · ·I don't know that either.
·9· · · · Q· · ·Are those monthly payments current?
10· · · · A· · ·I believe so, but I'm not sure.
11· · · · Q· · ·Who pays those monthly payments?
12· · · · A· · ·Simply Styled.
13· · · · Q· · ·Who on behalf of Simply Styled actually
14· ·makes those payments?
15· · · · · · · MR. LEVY:· Objection to form.
16· · · · A· · ·It was set up on auto pay.
17· · · · Q· · ·(By Mr. Beller)· From what account?
18· · · · A· · ·Simply Styled.
19· · · · Q· · ·What bank account does Simply Styled
20· ·have?
21· · · · A· · ·Novo.
22· · · · Q· · ·Okay.· Does Simply Styled have a
23· ·bookkeeper or someone who handles payments and,
24· ·you know, bills generally?
25· · · · A· · ·No.· Well, we have a bookkeeper.
Page 54
·1· · · · Q· · ·Who's the bookkeeper?
·2· · · · A· · ·I don't know her name.· I'd have to
·3· ·look it up.
·4· · · · Q· · ·Does anyone else work at Simply Styled?
·5· · · · A· · ·We have a lot of contractors.
·6· · · · Q· · ·Is the bookkeeper a contractor?
·7· · · · A· · ·I'm not sure what the definition of a
·8· ·contractor is, but she's not an employee.
·9· · · · Q· · ·What's the bookkeeper's first name?
10· · · · A· · ·I really don't know.· I'm sorry.
11· · · · Q· · ·You don't recall at all?
12· · · · A· · ·I really don't.· I told you that I was
13· ·bad at names.
14· · · · Q· · ·Does Simply Styled own any other
15· ·vehicles?
16· · · · A· · ·No.· No.
17· · · · Q· · ·Okay.· Do you --· Do any of your other
18· ·entities own any vehicles?
19· · · · A· · ·Michelle might have a vehicle.· I don't
20· ·know.
21· · · · Q· · ·What vehicle does Michelle have?
22· · · · A· · ·I don't know.
23· · · · Q· · ·You don't know what she drives?
24· · · · A· · ·No.
25· · · · Q· · ·Does Living Well Design own any
Page 55
·1· ·vehicles?
·2· · · · A· · ·I --· I have no idea.· I mean, I think
·3· ·you've got a balance sheet and income statements
·4· ·and all those kinds of things, so . . .
·5· · · · Q· · ·Yeah, we're going to go through that.
·6· ·Okay.· Do you own any other vehicles in your own
·7· ·name besides the two that you mentioned, the BMW
·8· ·and the Corvette?
·9· · · · A· · ·No.
10· · · · Q· · ·Okay.· Do you own any --· Well, let me
11· ·ask you, do you have any snow machines?
12· · · · A· · ·I do have a snowmobile.
13· · · · Q· · ·What kind of snowmobile?
14· · · · A· · ·Polaris.
15· · · · Q· · ·What kind?
16· · · · A· · ·I'm not sure.
17· · · · Q· · ·What year?
18· · · · A· · ·I don't know.
19· · · · Q· · ·Old?· New?
20· · · · A· · ·Old.
21· · · · Q· · ·Do you just have one?
22· · · · A· · ·Currently, yes.· There was another one,
23· ·but it's broken.· This one's broken right now,
24· ·too.
25· · · · Q· · ·And you --· What did you do with the
Page 56
·1· ·other one?
·2· · · · A· · ·It's sitting in the lawn.
·3· · · · Q· · ·At the Dayton Street property?
·4· · · · A· · ·Nope.· It's up at the lake house, I
·5· ·believe.
·6· · · · Q· · ·Okay.· Granby?
·7· · · · A· · ·Granby, yep.
·8· · · · Q· · ·Are both the snow machines at the
·9· ·Granby property?
10· · · · A· · ·I believe so.
11· · · · Q· · ·How do you get to the Granby property?
12· · · · A· · ·I drive.
13· · · · Q· · ·Do you use either the BMW or the
14· ·Corvette to get there?
15· · · · A· · ·No.· I usually go with my friend
16· ·Phil --
17· · · · Q· · ·Okay.
18· · · · A· · ·-- in the summer.
19· · · · Q· · ·Do you have a Ford Bronco?
20· · · · A· · ·I do not.· There is --· There was one,
21· ·and I think Michelle still has that.· I'm not
22· ·sure, though.· That's why I said I wasn't sure
23· ·earlier when you asked.
24· · · · Q· · ·Do you know if that's owned by an
25· ·entity or by Michelle?
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·1· ·any other businesses?
·2· · · · A· · ·Yes.
·3· · · · Q· · ·What vehicles are those?
·4· · · · A· · ·The --· I have a 2020 Tesla that's
·5· ·owned by the Simply Styled.
·6· · · · Q· · ·What are the monthly payments on that
·7· ·Tesla?
·8· · · · A· · ·I don't know that either.
·9· · · · Q· · ·Are those monthly payments current?
10· · · · A· · ·I believe so, but I'm not sure.
11· · · · Q· · ·Who pays those monthly payments?
12· · · · A· · ·Simply Styled.
13· · · · Q· · ·Who on behalf of Simply Styled actually
14· ·makes those payments?
15· · · · · · · MR. LEVY:· Objection to form.
16· · · · A· · ·It was set up on auto pay.
Q· · ·Do you have a Ford Bronco?
20· · · · A· · ·I do not.· There is --· There was one,
21· ·and I think Michelle still has that.· I'm not
22· ·sure, though.· That's why I said I wasn't sure
23· ·earlier when you asked.
24· · · · Q· · ·Do you know if that's owned by an
25· ·entity or by Michelle?
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·1· · · · A· · ·I know she's operating it as a business
·2· ·and --· Actually, I don't know that.· I believe
·3· ·she is.
·4· · · · Q· · ·So is it one of the businesses you
·5· ·mentioned, Simply Styled or Living Well Design?
·6· · · · A· · ·Definitely not Simply Styled.· Living
·7· ·Well Design, if anything, yeah.
·8· · · · Q· · ·Okay.
·9· · · · A· · ·I think that was on the balance sheet.
10· · · · Q· · ·Do you know --· Do you own any aspect
11· ·of this Ford Bronco?
12· · · · A· · ·I mean, I think the loan's under my
13· ·name and is part of our divorce proceedings, which
14· ·I would not like it to be the case.
15· · · · Q· · ·Are you making payments on that Ford
16· ·Bronco?
17· · · · A· · ·I'm not.
18· · · · Q· · ·Have you made a monthly payment for
19· ·January or December 2024?
20· · · · A· · ·You just asked me if I was making
21· ·payments and I said I'm not.
22· · · · Q· · ·Okay.· So we went through the
23· ·snowmobiles, the Ford Bronco.· Are there any other
24· ·vehicles that you have an interest in, either
25· ·directly or indirectly?
Page 58
·1· · · · A· · ·No.
·2· · · · Q· · ·Motorcycles?
·3· · · · A· · ·I used to work in trauma, and I would
·4· ·never get on a motorcycle.
·5· · · · Q· · ·Boats?
·6· · · · A· · ·No.· I crashed a boat once, though.
·7· ·That's also very dangerous.
·8· · · · Q· · ·Bicycles?
·9· · · · A· · ·Yes, I have a bicycle.
10· · · · Q· · ·Is it worth more than $1,000?
11· · · · A· · ·No.
12· · · · Q· · ·What kind of bicycle?
13· · · · A· · ·Specialized.
14· · · · Q· · ·What kind?
15· · · · A· · ·I don't know.
16· · · · Q· · ·Is it a triathlon bike?
17· · · · A· · ·No.
18· · · · Q· · ·Do you own a triathlon bike?
19· · · · A· · ·No.· I don't do triathlons anymore.
20· · · · Q· · ·Is this just a road bike?
21· · · · A· · ·It's just a road bike.
22· · · · Q· · ·No mountain bikes?
23· · · · A· · ·It got stolen when I was in college and
24· ·I've been jaded ever since and won't buy another
25· ·one.
Page 59
·1· · · · Q· · ·Oh, okay.· Either directly or
·2· ·indirectly, do you have any accounts with any
·3· ·stockbrokers or commodity brokers?
·4· · · · A· · ·No.
·5· · · · Q· · ·Since December 2024, it sounds like
·6· ·you're making some payments but not others.
·7· ·You're paying on the BMW, right?
·8· · · · A· · ·I never said I was paying on the BMW.
·9· ·I said I was not sure.
10· · · · Q· · ·I could have sworn you said you were
11· ·making payments.· What payments have you been
12· ·making since December 2024 to any creditor?
13· · · · A· · ·I'm really not sure.· Like, I've --· If
14· ·you knew what my daily life was like, you would
15· ·believe that it's very hard to keep up on anything
16· ·right now.
17· · · · Q· · ·When you do make payments to a
18· ·creditor, where -- where do they come from?
19· · · · · · · MR. LEVY:· Objection, form, asked and
20· ·answered.
21· · · · A· · ·Yeah.· So I believe I have answered
22· ·that to the best of my knowledge.· I mean, my
23· ·business credit card is managed by my -- my
24· ·practice managers, so I have nothing to do with
25· ·it.
Page 60
·1· · · · Q· · ·(By Mr. Beller)· Okay.· You provided us
·2· ·with some financial information which I'm going to
·3· ·go through with you.
·4· · · · · · · (Exhibit 1 marked.)
·5· · · · Q· · ·(By Mr. Beller)· Did you look at
·6· ·Exhibit 1 before it was provided?
·7· · · · A· · ·Yeah.· Apparently, this Audi is no
·8· ·longer around.
·9· · · · Q· · ·What happened to the Audi?
10· · · · A· · ·She said she got rid of it.· I have no
11· ·idea if that's true or not.
12· · · · Q· · ·So it was her car, not yours?
13· · · · A· · ·It was not my car.· That's correct.
14· · · · Q· · ·When you see Michelle, is she driving
15· ·the Bronco?
16· · · · A· · ·I haven't seen her recently.· The last
17· ·time that I saw her, yes, she was driving the
18· ·Bronco.
19· · · · Q· · ·First, you mentioned a bookkeeper.· Is
20· ·this Kris Becker, CPA, is she the bookkeeper
21· ·you're referencing?
22· · · · A· · ·So that is a man, and he is my CPA that
23· ·files my taxes.· He is not my bookkeeper.
24· · · · Q· · ·Okay.· Who came up with these values?
25· ·Was that you or was that Kris Becker?
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·1· · · · A· · ·I know she's operating it as a business
·2· ·and --· Actually, I don't know that.· I believe
·3· ·she is.
·4· · · · Q· · ·So is it one of the businesses you
·5· ·mentioned, Simply Styled or Living Well Design?
·6· · · · A· · ·Definitely not Simply Styled.· Living
·7· ·Well Design, if anything, yeah.
·8· · · · Q· · ·Okay.
·9· · · · A· · ·I think that was on the balance sheet.
10· · · · Q· · ·Do you know --· Do you own any aspect
11· ·of this Ford Bronco?
12· · · · A· · ·I mean, I think the loan's under my
13· ·name and is part of our divorce proceedings, which
14· ·I would not like it to be the case.
15· · · · Q· · ·Are you making payments on that Ford
16· ·Bronco?
17· · · · A· · ·I'm not.
18· · · · Q· · ·Have you made a monthly payment for
19· ·January or December 2024?
20· · · · A· · ·You just asked me if I was making
21· ·payments and I said I'm not.
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·1· · · · A· · ·I don't know that.· My understanding is
·2· ·that both were, but I don't know.
·3· · · · Q· · ·Okay.· Were they both from First
·4· ·Internet Bank of Indiana?
·5· · · · A· · ·Yes.
·6· · · · · · · MR. BELLER:· Okay.· Other than getting
·7· ·that information we talked about, that's --
·8· · · · · · · MR. LEVY:· Yeah.· And just for the
·9· ·record, I've got those three things here, and so I
10· ·just want to make sure we're clear.
11· · · · · · · You want the bookkeeper's name, Nicole
12· ·whoever it is.
13· · · · · · · MR. BELLER:· Uh-huh.
14· · · · · · · MR. LEVY:· The financials for Redwood.
15· ·I'll let you know when we expect to get them in
16· ·response to the charging order.· And then there's
17· ·the answer to the writ of garnishment for Redwood
18· ·which we're not contesting service of, and we will
19· ·provide that to you.· I'll e-mail that to you
20· ·today.
21· · · · · · · MR. BELLER:· Sure.· And then also the
22· ·financial information for the other charging
23· ·orders.
24· · · · · · · MR. LEVY:· Oh, yeah.· The two --· The
25· ·charging orders on Living Well -- or Simply
Page 134
·1· ·Styled?
·2· · · · · · · MR. BELLER:· Sure.
·3· · · · · · · MR. LEVY:· Yeah.· Four things.
·4· · · · · · · MR. BELLER:· Okay.· We're all done.
·5· · · · · · · THE COURT REPORTER:· Before we go off
·6· ·the record, Mr. Beller, are you ordering the
·7· ·transcript?
·8· · · · · · · MR. BELLER:· Yes, please.
·9· · · · · · · THE COURT REPORTER:· And, Mr. Levy, do
10· ·you need a copy of the transcript?
11· · · · · · · MR. LEVY:· Yes, please.
12· · · · · · · THE COURT REPORTER:· With exhibits?
13· · · · · · · MR. LEVY:· No.· I'm okay on exhibits.
14· ·Thanks.
15· · · · · · · THE COURT REPORTER:· Thanks, everyone.
16· · · · · · · (The deposition concluded at
17· · · · · · · ·1:13 p.m., February 3, 2025.)
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Page 135
·1· · · · · · I, BRENT S. HERRON, do hereby certify
·2· ·that I have read the foregoing transcript and
·3· ·that the same and accompanying amendment sheets,
·4· ·if any, constitute a true and complete record
·5· ·of my testimony.
·6
·7· · · · · · · · · · · · · ________________________
·8· · · · · · · · · · · · · Signature of Deponent
·9
10· · · · · · · · · · · · · (· ) No amendments
11· · · · · · · · · · · · · (· ) Amendments attached
12
13· · · · · · · · ·Subscribed and sworn to before me th
14· ·___ day of _____________, 2025.
15
16· · · · · · My commission expires ________________
17· · · · · · Seal:
18
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23· ·TLH
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Page 136
·1· ·STATE OF COLORADO)
·2· · · · · · · · · · )ss.· ·REPORTER'S CERTIFICATE
·3· ·COUNTY OF DENVER )
·4· · · · ·I, Tracy L. Harris, do hereby certify that I
·5· ·am a Certified Realtime Reporter, Registered Merit
·6· ·Reporter, within the State of Colorado; that
·7· ·previous to the commencement of the examination,
·8· ·the deponent was duly sworn to testify to the
·9· ·truth.
10· · · · · · · I further certify that this deposition
11· ·was taken in shorthand by me at the time and place
12· ·herein set forth, that it was thereafter reduced
13· ·to typewritten form, and that the foregoing
14· ·constitutes a true and correct transcript.
15· · · · ·I further certify that I am not related to,
16· ·employed by, nor of counsel for any of the parties
17· ·or attorneys herein, nor otherwise interested in
18· ·the result of the within action.
19· · · · ·In witness whereof, I have affixed my
20· ·signature this 17th day of February, 2025.
21
22
23· · · · · · · · · · ·Tracy L. Harris, CRR, RMR, RPR
24
25
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·1· ·MEADORS COURT REPORTING
· · ·4025 Automation Way, Suite D2
·2· ·Fort Collins, Colorado· 80525
·3· ·February 17, 2025
·4· ·ATLAS LAW FIRM P.C
· · ·Edward Levy, Esq.
·5· ·501 South Cherry Street, Suite 1100
· · ·Denver, Colorado· 80246
·6
· · ·Re:· Deposition of BRENT S. HERRON
·7· · · · MidCountry Bank vs. Freeport Elk River
· · · · · Case No. 2024-CV-31629
·8
· · ·The aforementioned deposition is ready for
·9· ·reading and signing.· Please attend to this
· · ·matter by following BOTH of the items indicated
10· ·below:
11· ·_____ Call 970-482-1506 and arrange with us
· · · · · ·to read and sign the deposition in our
12· · · · ·office
13· ·_XXX_ Have the deponent read your copy and sign
· · · · · ·the signature page and amendment sheets, if
14· · · · ·applicable; the signature page is attached
15· ·_____ Read the enclosed copy of the deposition
· · · · · ·and sign the signature page and amendment
16· · · · ·sheets, if applicable; the signature page
· · · · · ·is attached
17
· · ·_XXX_ WITHIN 35 DAYS OF THE DATE OF THIS LETTER
18
· · ·_____ By _______ due to a trial date of _______
19
· · ·Please be sure the original signature page and
20· ·amendment sheets, if any, are SIGNED BEFORE A
· · ·NOTARY PUBLIC and returned to Meadors Reporting
21· ·for filing with the original deposition.· A copy
· · ·of these changes should also be forwarded to
22· ·counsel· of record.· Thank you.
23· ·MEADORS COURT REPORTING
24· ·cc:· All Counsel
25
Page 138
·1· ·MEADORS COURT REPORTING
· · ·4025 Automation Way, Suite D2
·2· ·Fort Collins, Colorado· 80525
·3
·4
· · · · · · · · · · · ·BRENT S. HERRON
·5· · · · · · · · · · February 3, 2025
· · · · MidCountry Bank vs. Freeport Elk River, et al.
·6· · · · · · · · ·Case No. 2024-CV-31629
·7
· · ·The original deposition was filed with
·8
· · ·Richard D. Beller, Esq., on
·9
· · ·approximately the 17th day of February, 2025.
10
· · ·_____ Signature waived
11
· · ·_____ Signature not requested
12
· · ·_____ Unsigned; signed signature page and
13· · · · ·amendment sheets, if any, to be filed at
· · · · · ·trial
14
· · ·_XXX_ Unsigned; original amendment sheets and/or
15· · · · ·signature pages should be forwarded to
· · · · · ·Meadors Court Reporting to be filed in the
16· · · · ·envelope attached to the sealed original.
17
18· ·Thank you.
19· ·MEADORS COURT REPORTING
20
· · ·cc:· All Counsel
21
22
23
24
25
Page 139
· · · · · · Deposition of BRENT S. HERRON
· · · · · · · · · February 3, 2025
· · MidCountry Bank vs. Freeport Elk River, et al.
· · · · · · · ·Case No. 2024-CV-31629
The deponent wishes to make the following changes
· · · ·in the testimony as originally given:
Page· Line· · · · · ·Should Read· · · · · Reason
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
____· ____· ___________________________· ________
Signature of Deponent: __________________________
Acknowledged before me this ____ day of _________,
20___.
(Seal)· · · ·Notary's signature _________________
· · · · · · ·My Commission expires ______________
EXHIBIT J
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EXHIBIT K
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MidCountry Bank
v.
Freeport Elk River LLC
Michelle Herron
April 23, 2025
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Page 1
ADAMS COUNTY, COLORADO, DISTRICT COURT
Case No. 2024CV31629
______________________________________________________
DEPOSITION OF:· MICHELLE HERRON - 4/23/2025
______________________________________________________
PLAINTIFF:· MIDCOUNTRY BANK,
v.
DEFENDANTS:· FREEPORT ELK RIVER LLC, BRENT
HERRON, and MICHELLE HERRON.
______________________________________________________
· · · · ·PURSUANT TO NOTICE, the deposition of MICHELLE
HERRON was taken on behalf of the Plaintiff at 125 South
Howes Street, 3rd Floor, Fort Collins, Colorado 80521,
on April 23, 2025, at 10:08 a.m. before Karen Waters,
Registered Professional Reporter.
Page 2
·1· · · · · · · · · · A P P E A R A N C E S
·2· ·For the Plaintiff:
·3· · · · · · MR. RICHARD D. BELLER, ESQ.
· · · · · · · RINGENBERG & BELLER, P.C.
·4· · · · · · 125 South Howes Street
· · · · · · · 3rd Floor
·5· · · · · · Fort Collins, Colorado· 80521
· · · · · · · Phone:· 970-482-1056
·6· · · · · · Email:· Rbd@rb-legal.com
·7
· · ·For the Defendants:
·8
· · · · · · · MR. ANDREW BRITT
·9· · · · · · BRITT LAW LLC
· · · · · · · 11990 Grant Street
10· · · · · · Suite 550
· · · · · · · Northglenn, Colorado· 80233
11· · · · · · Phone:· 720-336-0262
· · · · · · · Email:· Abritt@brittlaw.com
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·1· · · · · · · · · · · · ·I N D E X
·2
· · ·EXAMINATION OF MICHELLE HERRON:· · · · · · · · · PAGE
·3· ·April 23, 2025
·4· ·BY MR. BELLER· · · · · · · · · · · · · · · · · 4, 133
·5· ·BY MR. BRITT· · · · · · · · · · · · · · · · · · · 119
·6
· · · · · · · · · · · · · · · · · · · · · · · · · ·INITIAL
·7· ·DEPOSITION EXHIBITS:· · · · · · · · · · · · REFERENCE
·8· ·Exhibit 11· · · · · Draft tax return· · · · · · · ·56
·9· ·Exhibit 12· · · · · Writ of continuing· · · · · · 112
· · · · · · · · · · · · ·garnishment
10
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Page 4
·1· · · · WHEREUPON, the following proceedings were taken
·2· ·pursuant to the Colorado Rules of Civil Procedure.
·3· · · · · · · ·*· · · ·*· · · ·*· · · ·*· · · ·*
·4· · · · · · · · · · · ·MICHELLE HERRON,
·5· ·having been first duly sworn to state the whole truth,
·6· ·testified as follows:
·7· · · · · · · · (Deponent's reply to oath:· Yes, I do.)
·8· · · · · · · · · · · · ·EXAMINATION
·9· ·BY MR. BELLER:
10· · · · Q.· ·Have you ever had your deposition taken
11· ·before?
12· · · · A.· ·No.
13· · · · Q.· ·Let's start off just with a couple warnings
14· ·that are common to pretty much every deposition.· And
15· ·you may have heard this already from your attorney, but
16· ·if I repeat something, that's okay.
17· · · · A.· ·It's good.
18· · · · Q.· ·The most important thing is, you are under
19· ·oath just as if you were in a court of law.· So it's
20· ·absolutely critical that you tell the truth because your
21· ·testimony has the same force and effect and the perjury
22· ·as it would in the court of law.
23· · · · A.· ·Okay.
24· · · · Q.· ·And the second thing that's really important
25· ·is, we have a court reporter who is trying to transcribe
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·1· ·the approximate balance of your Chase Bank?
·2· · · · A.· ·Very low.· Like maybe $7 in there.
·3· · · · Q.· ·U.S. Bank?
·4· · · · A.· ·U.S. Bank, there's probably $700 in there
·5· ·right now.
·6· · · · Q.· ·And I see there's a savings account right now.
·7· ·Is that a savings or in checking?
·8· · · · A.· ·I believe that's in checking.· And I believe
·9· ·there's $0 in savings.
10· · · · Q.· ·You also mentioned Airbnb.· What is that
11· ·Airbnb revenue?
12· · · · A.· ·Yes.· So the Airbnb is the Granby property.
13· ·And that, I know I get only 12 percent of the proceeds
14· ·that are generated from rentals.· That fluctuates based
15· ·on season, so there's not really a -- if I could give
16· ·you an average, maybe it's $200 every month is what I'm
17· ·bringing in from the revenue on the Airbnb is my guess
18· ·and estimate.
19· · · · Q.· ·Is it better in the winter or better in the
20· ·summer?
21· · · · A.· ·Summertime and wintertime.· Spring and fall,
22· ·it's very dead.
23· · · · Q.· ·What kind of property is that?
24· · · · A.· ·It's a cabin in the mountains, two-bed,
25· ·two-bath.
Page 14
·1· · · · Q.· ·You said you get 12 percent of the Airbnb
·2· ·revenue?
·3· · · · A.· ·Roughly 12 to 13 percent, yeah.
·4· · · · Q.· ·And that's about $200 a month on average?
·5· · · · A.· ·Yes.
·6· · · · Q.· ·What's a good month?
·7· · · · A.· ·Maybe I will bring in $360.· So maybe, like,
·8· ·doubling, closer to 400 on a good month.
·9· · · · Q.· ·Okay.· How much does it rent for?
10· · · · A.· ·Anywhere from $200 a night to, like, $450 a
11· ·night on, like, holidays and busy weekends.
12· · · · Q.· ·And are you involved at all in renting that
13· ·property?
14· · · · A.· ·I currently do have -- I'm tied to the Airbnb
15· ·account and I will answer tenants every once in a while,
16· ·but mainly Brent is managing that.· But my name is, yes,
17· ·definitely still on there, and I get all the renter
18· ·emails.
19· · · · Q.· ·What is the address of that Granby property?
20· · · · A.· ·23 GCR 6121 Granby, Colorado.
21· · · · Q.· ·What sources of regular income do you have?
22· · · · A.· ·Sources of regular income?· Currently, I'm not
23· ·bringing in income.· Yeah, I don't pay myself through
24· ·Living Well Design right now.· I was taking owner draws
25· ·through 2024; but since then, those have stopped.· And
Page 15
·1· ·then, yeah, it's the rent that I'm bringing in.· And
·2· ·that's about it.
·3· · · · Q.· ·So the rent you are bringing in of $1,500 a
·4· ·month for the basement?
·5· · · · A.· ·Yes.
·6· · · · Q.· ·And you said you have been taking
·7· ·approximately, I think it was, 4,600?
·8· · · · A.· ·The way I came up with that is I kind of just
·9· ·added up all the owner draws years, averaged it out,
10· ·divided it by 12, and that's the number I came up with.
11· · · · Q.· ·How do you handle owner draws at Living Well?
12· · · · A.· ·In the past it was to, you know, cover my
13· ·expenses.· I had pretty high expenses in May of last
14· ·year, so I took out a lot more.· But how do I handle
15· ·them?· I guess if you could be more specific with the
16· ·question.· Yeah, I was just taking out to cover the
17· ·expenses.
18· · · · Q.· ·So basically, as you have a personal expense,
19· ·you took money out of Living Well to cover it?
20· · · · A.· ·Correct, yes.
21· · · · Q.· ·Okay.· So I guess what I was kind of asking --
22· ·well, what I was trying to ask about was, do you take
23· ·out a regular draw, like a monthly --
24· · · · A.· ·It wasn't regular.· It wasn't consistent in a
25· ·sense.
Page 16
·1· · · · Q.· ·Okay.
·2· · · · A.· ·Yeah.
·3· · · · Q.· ·In your interrogatory responses, I understood
·4· ·that you took money in 2005 that you put back.
·5· · · · A.· ·Correct.
·6· · · · Q.· ·And how much money did you take out in 2025?
·7· · · · A.· ·Yes.· And to give you context around that,
·8· ·Brent had taken out $25,000 out of the Living Well
·9· ·Design bank account, I think, on January 6th. I
10· ·specifically remember $25,000 left the account.· I did
11· ·not authorize that.· I didn't know why he was taking the
12· ·money out.· And I got scared that he was going to
13· ·continue to take the money out, so I withdrew the rest
14· ·of the money so that he wouldn't continue to take money
15· ·out of the business.· So I held that money in my account
16· ·to protect it from him.· And then when I realized I
17· ·broke the charge order by doing that, I did deposit
18· ·everything back.· I wrote a personal check to the
19· ·business and deposited it back that way.· And I also
20· ·think at the same time, my accountant had put me on
21· ·payroll.· He didn't know I didn't want to be on payroll,
22· ·and I had gotten a couple paychecks that way.· And I
23· ·also deposited all that that was put in my account from
24· ·payroll.· I think it was only two weeks that that
25· ·happened, and all that money went back into the business
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Q.· ·In your interrogatory responses, I understood
·4· ·that you took money in 2005 that you put back.
·5· · · · A.· ·Correct.
·6· · · · Q.· ·And how much money did you take out in 2025?
·7· · · · A.· ·Yes.· And to give you context around that,
·8· ·Brent had taken out $25,000 out of the Living Well
·9· ·Design bank account, I think, on January 6th. I
10· ·specifically remember $25,000 left the account.· I did
11· ·not authorize that.· I didn't know why he was taking the
12· ·money out.· And I got scared that he was going to
13· ·continue to take the money out, so I withdrew the rest
14· ·of the money so that he wouldn't continue to take money
15· ·out of the business.· So I held that money in my account
16· ·to protect it from him.· And then when I realized I
17· ·broke the charge order by doing that, I did deposit
18· ·everything back.· I wrote a personal check to the
19· ·business and deposited it back that way.· And I also
20· ·think at the same time, my accountant had put me on
21· ·payroll.· He didn't know I didn't want to be on payroll,
22· ·and I had gotten a couple paychecks that way.· And I
23· ·also deposited all that that was put in my account from
24· ·payroll.· I think it was only two weeks that that
25· ·happened, and all that money went back into the business
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Page 17
·1· ·as well.
·2· · · · Q.· ·Let me break that down a little bit.
·3· · · · A.· ·Sure.
·4· · · · Q.· ·So you said Brent took $25,000 out on
·5· ·January 6th if I got that right?
·6· · · · A.· ·Yes.
·7· · · · Q.· ·And then you took the rest out because you
·8· ·were worried that the funds were disappearing?
·9· · · · A.· ·Yes.
10· · · · Q.· ·Did you put them into the U.S. Bank account?
11· · · · A.· ·Yes.
12· · · · Q.· ·And how much money was that?
13· · · · A.· ·If I'm remembering correctly, it was around
14· ·$6,000, or it might have been $9,000.· I'm trying to
15· ·remember.· Between 6- and $9,000 is what I took out and
16· ·put back into the company.
17· · · · Q.· ·And then there was an additional amount that
18· ·was payroll as I understood it.
19· · · · A.· ·Correct.· I was on payroll for two to
20· ·three weeks in, like, February to March.· And maybe it
21· ·was, like, $400 a week that ran payroll.· So I added
22· ·that all up and included that in the check that went
23· ·back into the business.
24· · · · Q.· ·And that check that went back to the business,
25· ·where was that from?
Page 18
·1· · · · A.· ·My U.S. Bank personal check.
·2· · · · Q.· ·And that was in February?
·3· · · · A.· ·I believe so.· I would have to check when that
·4· ·check was deposited; but, yes, I believe that was
·5· ·February.· It may have been early March.
·6· · · · Q.· ·And I also understood from a pleading that I
·7· ·saw in the divorce case that Mr. Herron took besides the
·8· ·$25,000 another amount out of Living Well.
·9· · · · A.· ·It was close to, like, $4,000 or $5,000.· So
10· ·total I think he has withdrawn $30,000 that I'm not sure
11· ·where that went.
12· · · · Q.· ·Did Mr. Herron ever explain why he did that?
13· · · · A.· ·He explained that he took the money out of my
14· ·business account to help pay for joint legal expenses.
15· · · · Q.· ·Do you have joint legal expenses?
16· · · · A.· ·We do have -- we have retained a lawyer in
17· ·Minnesota.· His name is Drew Bardwell.· We do have both
18· ·an interest in that situation.
19· · · · Q.· ·Is that lawyer on retainer?
20· · · · A.· ·Yes.
21· · · · Q.· ·Do you know how big the retainer is?
22· · · · A.· ·It was $25,000 for the initial retainer, and I
23· ·believe we owe another $10,000.· And I'm not sure if
24· ·that's been paid by Brent or not.
25· · · · Q.· ·And do you know the nature of the litigation
Page 19
·1· ·in Minnesota?
·2· · · · A.· ·Yes.· So that case, how do I explain it?· That
·3· ·case Andrew Bardwell is kind of questioning -- her name
·4· ·is Ashley Kemplin-Gamm.· But this is the lawyer that
·5· ·represented us and represented Matthew Onofrio on the
·6· ·business deal where we purchased Freeport Elk River, the
·7· ·property from MidCountry Bank.
·8· · · · Q.· ·Okay.· Is there some kind of a malpractice
·9· ·action pending?
10· · · · A.· ·Yes.
11· · · · Q.· ·Do you know if that action is actually
12· ·pending, or is just in the works?
13· · · · A.· ·It's definitely in the works.· And it's
14· ·definitely -- we are getting evidence, I think, to
15· ·present at some point.· She was just deposed on
16· ·April 17th, I think.· So we have her deposition, and I
17· ·think the lawyers are kind of going over that right now.
18· · · · Q.· ·Okay.· So you have an attorney-client
19· ·privilege with that attorney.· I'm not trying to invade
20· ·that, but I'm just trying to understand kind of basics.
21· · · · A.· ·Sure.
22· · · · Q.· ·At least the way I think of it generally, to
23· ·take a deposition, you have to have a pending court
24· ·case.· You don't take a deposition generally without
25· ·having a pending court case.· Is a there a pending court
Page 20
·1· ·case that you took that deposition in; do you know?
·2· · · · A.· ·I am not sure how or where that case is. I
·3· ·don't know.
·4· · · · Q.· ·Okay.· I know generally that there's
·5· ·underlying litigation that resulted in a judgment
·6· ·against Freeport and Mr. Herron.
·7· · · · A.· ·Yes.
·8· · · · Q.· ·And that was in Minnesota.· And that judgment
·9· ·is what we are talking about today; that's why we are
10· ·talking today.
11· · · · A.· ·Yes.
12· · · · Q.· ·But I'm just wondering if that deposition was
13· ·part of that case or if it was part of another case.· Do
14· ·you know?
15· · · · A.· ·It's part of a different case.
16· · · · Q.· ·Do you know who the parties are to that case?
17· · · · A.· ·Other than Ashley being named in that case,
18· ·I'm not sure who else is named in the case.· I would
19· ·have to look at everything.
20· · · · Q.· ·But in any event, you are represented by
21· ·Mr. Bardwell?
22· · · · A.· ·Andrew Bardwell, yes.
23· · · · Q.· ·And are you parties to the case, you and
24· ·Mr. Herron?
25· · · · A.· ·I believe so, yes, both Brent and I.
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·1· ·as well.
·1· · · · A.· ·My U.S. Bank personal check.
·2· · · · Q.· ·Let me break that down a little bit.
·2· · · · Q.· ·And that was in February?
·3· · · · A.· ·Sure.
·3· · · · A.· ·I believe so.· I would have to check when that
·4· · · · Q.· ·So you said Brent took $25,000 out on
·4· ·check was deposited; but, yes, I believe that was
·5· ·January 6th if I got that right?
·5· ·February.· It may have been early March.
·6· · · · A.· ·Yes.
·6· · · · Q.· ·And I also understood from a pleading that I
·7· · · · Q.· ·And then you took the rest out because you
·7· ·saw in the divorce case that Mr. Herron took besides the
·8· ·were worried that the funds were disappearing?
·8· ·$25,000 another amount out of Living Well.
·9· · · · A.· ·Yes.
·9· · · · A.· ·It was close to, like, $4,000 or $5,000.· So
10· · · · Q.· ·Did you put them into the U.S. Bank account?
10· ·total I think he has withdrawn $30,000 that I'm not sure
11· · · · A.· ·Yes.
11· ·where that went.
12· · · · Q.· ·And how much money was that?
12· · · · Q.· ·Did Mr. Herron ever explain why he did that?
13· · · · A.· ·If I'm remembering correctly, it was around
13· · · · A.· ·He explained that he took the money out of my
14· ·$6,000, or it might have been $9,000.· I'm trying to
14· ·business account to help pay for joint legal expenses.
15· ·remember.· Between 6- and $9,000 is what I took out and
15· · · · Q.· ·Do you have joint legal expenses?
16· ·put back into the company.
16· · · · A.· ·We do have -- we have retained a lawyer in
17· · · · Q.· ·And then there was an additional amount that
17· ·Minnesota.· His name is Drew Bardwell.· We do have both
18· ·was payroll as I understood it.
18· ·an interest in that situation.
19· · · · A.· ·Correct.· I was on payroll for two to
19· · · · Q.· ·Is that lawyer on retainer?
20· ·three weeks in, like, February to March.· And maybe it
20· · · · A.· ·Yes.
21· ·was, like, $400 a week that ran payroll.· So I added
21· · · · Q.· ·Do you know how big the retainer is?
22· ·that all up and included that in the check that went
22· · · · A.· ·It was $25,000 for the initial retainer, and I
23· ·back into the business.
23· ·believe we owe another $10,000.· And I'm not sure if
24· · · · Q.· ·And that check that went back to the business,
24· ·that's been paid by Brent or not.
25· ·where was that from?
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·1· ·November.
·2· · · · · · ·What I'm wondering is, have you seen this writ
·3· ·of garnishment?· It's something that would have been
·4· ·served on you by our process server.
·5· · · · A.· ·I believe I have received this.
·6· · · · Q.· ·Did you respond to that?
·7· · · · A.· ·No, I did not.
·8· · · · Q.· ·So the garnishment was issued and served -- I
·9· ·believe it was served on you roughly in that time frame,
10· ·November of 2024.· So it sounds like you basically
11· ·ignored it; is that fair?
12· · · · A.· ·At the time Brent and I -- did I ignore it? I
13· ·guess individually, yes, because Brent said he would
14· ·handle it.· It's obviously clear that I should have
15· ·handled it myself.· So, yes, I had bad advice from
16· ·Brent.
17· · · · Q.· ·So it sounds like after the date of this writ
18· ·of continuing garnishment was served on you that you
19· ·continued to take funds from Living Well Design; is that
20· ·fair?
21· · · · A.· ·There was an incident where I did take money
22· ·out after it was served, yes.
23· · · · Q.· ·But even in December 2024, you took funds,
24· ·correct?
25· · · · A.· ·I would have to go back and look to see if I
Page 114
·1· ·took funds.· So I would have to look to confirm that I
·2· ·did take funds in December.· I'm not sure if I did or
·3· ·not.
·4· · · · Q.· ·What records do you generate when you take a
·5· ·draw or a distribution from Living Well Design
·6· ·specifically?
·7· · · · A.· ·I can tell when I took a draw just through the
·8· ·Novo Bank account transition activity.
·9· · · · Q.· ·So it's a Novo Bank account, your bank account
10· ·with Living Well Design, correct?
11· · · · A.· ·Yes.
12· · · · Q.· ·So you have access to those records?
13· · · · A.· ·Not all the time.· Brent is the primary
14· ·accountholder on Novo Bank.· So every time I go to
15· ·access Novo Bank, I have to request an access code.· He
16· ·then has to provide me an access code for me to be able
17· ·to view the bank account.· So I have been able to get in
18· ·there with access codes that he provides me, but it's
19· ·not on a consistent basis.· So I haven't been able to
20· ·have consistent access to that bank account.· When I am
21· ·able to get into that bank account, yes, I can see the
22· ·activity pretty easily.
23· · · · Q.· ·Okay.· So what I understand just through my
24· ·own banking is you type in a username, then a password,
25· ·and then you've got the secondary authenticity
Page 115
·1· ·authentication that texts a little code to your cell
·2· ·phone.
·3· · · · A.· ·It goes to his phone.
·4· · · · Q.· ·So if he doesn't text you that code, you can't
·5· ·get into the account?
·6· · · · A.· ·Exactly, yes.· And that's been a huge point of
·7· ·contention since January.· And my divorce lawyer has
·8· ·been working to get me full access so that that ends,
·9· ·but I don't know why we haven't gotten there yet.
10· · · · Q.· ·Because this Novo Bank account is in Living
11· ·Well's name?· Or is it in Brent's Herron's name?
12· · · · A.· ·It's Living Well Design's bank account, but
13· ·Brent Herron is the primary account user.· I had
14· ·secondary access as a user, but he has deleted my access
15· ·multiple times out of, like, revenge, pretty much, like,
16· ·I'm taking you off the account, blah-blah-blah.
17· · · · · · ·So once he does that, it doesn't allow you to
18· ·add that same user back in.· So that's kind of been a
19· ·big disconnect because I'm sitting there trying to talk
20· ·to someone from Novo, and it's been very hard to get
21· ·ahold of Novo to see, like, why can't I get added back
22· ·as a user.· And they were just like, well, unless we get
23· ·permission from the primary person.
24· · · · · · ·So there's a lot of disconnect happening
25· ·with -- again, he is very controlling of every
Page 116
·1· ·finance -- you know, any money, he wants full control
·2· ·of, and he doesn't want me to have access to it.· So
·3· ·it's been very difficult to get access to anything.
·4· · · · · · ·So with that said, like, my brain is so
·5· ·jumbled, like, I don't know if I took a withdrawal in
·6· ·December.· I don't know if I had access to take
·7· ·withdrawals in December.· When I did have access, I was
·8· ·taking withdrawals.
·9· · · · Q.· ·Okay.· So as a general matter, though, if you
10· ·are taking money from -- and this is just how you
11· ·generally do things -- if you are taking money from Novo
12· ·Bank, the bank transfers the funds to your U.S. Bank
13· ·account?
14· · · · A.· ·Correct.
15· · · · Q.· ·And so then you would have a record generated
16· ·from both U.S. Bank and Novo Bank?
17· · · · A.· ·Yes.
18· · · · Q.· ·Both, in theory, send monthly statements.
19· · · · A.· ·So you are right.· I could go into U.S. Bank
20· ·account and see all the draws that I've taken.· Right
21· ·now I don't know if I took one in January or not because
22· ·they were so inconsistent.
23· · · · Q.· ·And QuickBooks, I would assume, also would
24· ·have a record of that if you are taking withdrawals?
25· · · · A.· ·I don't know if QuickBooks would have a record
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· Q.· ·What records do you generate when you take a
·5· ·draw or a distribution from Living Well Design
·6· ·specifically?
·7· · · · A.· ·I can tell when I took a draw just through the
·8· ·Novo Bank account transition activity.
·9· · · · Q.· ·So it's a Novo Bank account, your bank account
10· ·with Living Well Design, correct?
11· · · · A.· ·Yes.
12· · · · Q.· ·So you have access to those records?
13· · · · A.· ·Not all the time.· Brent is the primary
14· ·accountholder on Novo Bank.· So every time I go to
15· ·access Novo Bank, I have to request an access code.· He
16· ·then has to provide me an access code for me to be able
17· ·to view the bank account.· So I have been able to get in
18· ·there with access codes that he provides me, but it's
19· ·not on a consistent basis.· So I haven't been able to
20· ·have consistent access to that bank account.· When I am
21· ·able to get into that bank account, yes, I can see the
22· ·activity pretty easily.
23· · · · Q.· ·Okay.· So what I understand just through my
24· ·own banking is you type in a username, then a password,
25· ·and then you've got the secondary authenticity
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·1· ·authentication that texts a little code to your cell
·1· ·finance -- you know, any money, he wants full control
·2· ·phone.
·2· ·of, and he doesn't want me to have access to it.· So
·3· · · · A.· ·It goes to his phone.
·3· ·it's been very difficult to get access to anything.
·4· · · · Q.· ·So if he doesn't text you that code, you can't
·4· · · · · · ·So with that said, like, my brain is so
·5· ·get into the account?
·5· ·jumbled, like, I don't know if I took a withdrawal in
·6· · · · A.· ·Exactly, yes.· And that's been a huge point of
·6· ·December.· I don't know if I had access to take
·7· ·contention since January.· And my divorce lawyer has
·7· ·withdrawals in December.· When I did have access, I was
·8· ·been working to get me full access so that that ends,
·8· ·taking withdrawals.
·9· ·but I don't know why we haven't gotten there yet.
10· · · · Q.· ·Because this Novo Bank account is in Living
11· ·Well's name?· Or is it in Brent's Herron's name?
12· · · · A.· ·It's Living Well Design's bank account, but
13· ·Brent Herron is the primary account user.· I had
14· ·secondary access as a user, but he has deleted my access
15· ·multiple times out of, like, revenge, pretty much, like,
16· ·I'm taking you off the account, blah-blah-blah.
17· · · · · · ·So once he does that, it doesn't allow you to
18· ·add that same user back in.· So that's kind of been a
19· ·big disconnect because I'm sitting there trying to talk
20· ·to someone from Novo, and it's been very hard to get
21· ·ahold of Novo to see, like, why can't I get added back
22· ·as a user.· And they were just like, well, unless we get
23· ·permission from the primary person.
24· · · · · · ·So there's a lot of disconnect happening
25· ·with -- again, he is very controlling of every
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·1· · · · · · · · REPORTER'S CERTIFICATE
·2· ·STATE OF COLORADO· · · · ·)
· · · · · · · · · · · · · · · ·)· Ss.
·3· ·COUNTY OF LARIMER· · · · ·)
·4· · · · · · · · I, KAREN WATERS, Registered Professional
·5· ·Reporter, do hereby certify that previous to the
·6· ·commencement of the examination, the said MICHELLE
·7· ·HERRON was duly sworn or affirmed by me to testify to
·8· ·the truth in relation to the matters in controversy
·9· ·between the parties hereto; that the said deposition was
10· ·taken in machine shorthand by me at the time and place
11· ·aforesaid and was thereafter reduced to typewritten
12· ·form; that the foregoing is a true transcript of the
13· ·questions asked, testimony given, and proceedings had.
14· · · · I further certify that I am not employed by,
15· ·related to, nor of counsel for any of the parties
16· ·herein, nor otherwise interested in the outcome of this
17· ·litigation.
18· · · · · · · · IN WITNESS WHEREOF, I have affixed my
19· ·signature this 9th day of May, 2025.
20· ·_____· Reading and Signing was requested.
21· ·_XXX_· Reading and Signing was waived.
22· ·_____· Reading and Signing is not required.
23
24· · · · · · · · · · ·Karen Waters
· · · · · · · · · · · ·Registered Professional Reporter
25
Page 138
·1· ·MEADORS COURT REPORTING
· · ·4025 Automation Way, Suite D2
·2· ·Fort Collins, CO 80525
·3
·4
·5
· · · · · · · · · · · · · MICHELLE HERRON
·6· · · · · · · · · · · · April 23, 2025
· · · · · · ·MidCountry Bank v. Freeport Elk River LLC
·7· · · · · · · · · · ·Case No. 2024CV31629
·8
·9· ·The original deposition was filed with
10· ·Richard D. Beller, Esq., on approximately the
11· ·9th day of May, 2025.
12· ·_XXX_ Signature waived.
13· ·_____ Signature not requested.
14· ·_____ Unsigned; signed signature page and
· · · · · ·amendment sheets, if any, to be filed at
15· · · · ·trial.
16· ·_____ Unsigned; original amendment sheets and/or
· · · · · ·signature pages should be forwarded to Meadors
17· · · · ·Court Reporting to be filed in the envelope
· · · · · ·attached to the sealed original.
18
19
20· ·Thank you.
21· ·MEADORS COURT REPORTING
22· ·cc:· All Counsel
23
24
25
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DISTRICT COURT, ADAMS COUNTY,
STATE OF COLORADO
1100 Judicial Center Dr.
Brighton, Colorado 80601
COURT USE ONLY
Plaintiff
MIDCOUNTRY BANK
v.
Defendants:
Freeport Elk River, LLC
Brent Herron , an individual
Michelle Herron, an individual
Attorney:
Edward Levy, #36090
Edward Levy, P.C.
One Cherry Center, Suite 1100
501 South Cherry Street
Denver, Colorado 80246
Phone: (303)-481-6352
E-mail: elevy@edwardlevylaw.com
Case No: 2024CV031629
Division: C
BRENT HERRON’S ANSWERS TO JUDGMENT DEBTOR INTERROGATORIES TO DEFENDANT
BRENT HERRON
Mr. Brent Herron (“Mr. Herron” or “Judgment Debtor”), through counsel Edward Levy of
Edward Levy, P.C., hereby submits his Answers to Judgment Debtor Interrogatories to Defendant
Brent Herron (“Interrogatories”) served by MidCountry Bank (“MidCountry” or the “Judgment
Creditor”).
I.
General and Continuing Objections
1. Mr. Herron objects to MidCounty’s Interrogatories to the extent that they seek legal conclusions
rather than factual information.
2. Mr. Herron objects to Judgment Creditor’s Interrogatories to the extent they seek information
protected by any privilege, including the attorney/client privilege, the spousal privilege, and the
work product doctrine.
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3. Judgment Debtors object to Judgment Creditors’ Interrogatories to the extent they seek the
identification or production of confidential information, trade secrets, or proprietary
documents.
4. Mr. Herron objects to Judgment Creditor’s Interrogatories to the extent they are overly broad or
unduly burdensome.
5. Mr. Herron objects to these Interrogatories to the extent Judgment Creditor already knows the
information requested, and/or have possession of Judgment Debtor’s documents and records
that contain the information requested.
6. Mr. Herron, in making these responses, does not in any way waive or intend to waive: (a)
objections relating to competency, relevancy, materiality, privilege, or admissibility; or (b) the
right to revise, correct, supplement, or clarify any response.
7. Mr. Herron objects to these interrogatories in that they are excessive and burdensome in number,
well in excess of the interrogatories that might reasonably be allowed in discovery and intended
to oppress and burden him.
Subject to these General and Continuing Objections, Judgment Debtor responds to Judgment
Creditor’s Interrogatories as follows:
II.
ANSWERS TO INTERROGATORIES
INTERROGATORY NO. 1
Brent Sanders Herron
INTERROGATORY NO. 2
2153 South Dayton Street, Denver, Colorado 80231
INTERROGATORY NO. 3
Yes. Michelle Herron
INTERROGATORY NO. 4
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined term and seeks irrelevant names of minors.
Judgment Debtor has two minor children.
INTERROGATORY NO. 5
4605
INTERROGATORY NO. 6
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined terms.
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Mr. Herron does not have any of the categorized listed living with him.
INTERROGATORY NO. 7
Not applicable
INTERROGATORY NO. 8
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined terms.
Doctor
INTERROGATORY NO. 9
Self-employed
INTERROGATORY NO. 10
Variable
INTERROGATORY NO. 11
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined terms.
INTERROGATORY NO. 12
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined terms.
Not applicable
INTERROGATORY NO. 13
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined terms.
Not applicable
INTERROGATORY NO. 14
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined terms.
Self-employed
INTERROGATORY NO. 15
Self employed
INTERROGATORY NO. 16
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information which is protected by spousal privilege.
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No
INTERROGATORY NO. 17
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information which is protected by spousal privilege.
No
INTERROGATORY NO. 18
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information which is protected by spousal privilege.
No
INTERROGATORY NO. 19
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information which is protected by spousal privilege.
Named beneficiary of life insurance policy.
INTERROGATORY NO. 20
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information which is protected by spousal privilege.
No
INTERROGATORY NO. 21
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information already available to the judgment creditor.
INTERROGATORY NO. 22
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is a document production demand.
INTERROGATORY NO. 23
Mr. Herron reiterates and restates the general and continuing objections above, objects to this
interrogatory which has an undefined terms and to the extent that it seeks information which is
protected by spousal privilege and/or already available to the judgment creditor.
INTERROGATORY NO. 24
Mr. Herron reiterates and restates the general and continuing objections above.
Mr. Herron may have unliquidated claims against various persons and entities.
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INTERROGATORY NO. 25
No.
INTERROGATORY NO. 26
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory which has an undefined terms and to the extent that it seeks irrelevant information and
information already in the possession of the judgment creditor.
INTERROGATORY NO. 27
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information which is protected by spousal privilege.
INTERROGATORY NO. 28
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague, seeks information which is protected by spousal privilege,
or seeks information already known to the judgment creditor.
INTERROGATORY NO. 29
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague, seeks information which is protected by spousal privilege,
or seeks information already known to the judgment creditor.
INTERROGATORY NO. 30
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague.
No
INTERROGATORY NO. 31
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague, seeks information which is protected by spousal privilege,
or seeks information already known to the judgment creditor.
Yes. Mr. Herron has an interest in his home and other real estate.
INTERROGATORY NO. 32
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it seeks information which is protected by spousal privilege.
No.
INTERROGATORY NO. 33
Not applicable
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INTERROGATORY NO. 34
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague or seeks information which is protected by spousal
privilege.
No
INTERROGATORY NO. 35
No.
INTERROGATORY NO. 36
No.
INTERROGATORY NO. 37
No.
INTERROGATORY NO. 38
No.
INTERROGATORY NO. 39
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague or seeks information which is protected by spousal
privilege.
INTERROGATORY NO. 40
No.
INTERROGATORY NO. 41
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague or seeks information which is protected by spousal
privilege.
INTERROGATORY NO. 42
N/A
INTERROGATORY NO. 43
N/A
INTERROGATORY NO. 44
N/A
INTERROGATORY NO. 45
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Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is a document production demand.
INTERROGATORY NO. 46
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is a document production demand.
INTERROGATORY NO. 47
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is duplicative and a document production demand.
INTERROGATORY NO. 48
N/A
INTERROGATORY NO. 49
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague, is a document production request or seeks information
already available to the judgment creditor.
INTERROGATORY NO. 50
Mr. Herron reiterates and restates the general and continuing objections above and objects to this
interrogatory to the extent that it is vague, is a document production request or seeks information
already available to the judgment creditor.
III.
VERIFICATION
The undersigned swears under oath that the forgoing answers to interrogatories are accurate and
complete to the best of his knowledge as of 8th day of January, 2025.
Brent S. Herron
01 / 09 / 2025
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EXHIBIT L
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1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLORADO
IN RE:
)
)
Brent Sanders Herron
)
Case No. 25-14392-KHT
)
Chapter 11
)
Debtor.
)
______________________________________________________________________________
ORDER GRANTING MOTION FOR APPOINTMENT OF TRUSTEE
______________________________________________________________________________
Pursuant to 11 U.S.C. § 1104 and Bankruptcy Rule 2007.1, MidCountry Bank (“Bank”)
has moved the Court for the appointment of a Chapter 11 Bankruptcy Trustee pursuant to 11 U.S.C.
§ 1104 and Bankruptcy Rule 2007.1 for cause, due to Debtor’s fraud and dishonesty, and because
such appointment is in the best interests of creditors.
IT IS HEREBY ORDERED:
1. The Motion is granted and a chapter 11 trustee shall be appointed in this case in
accordance with 11 U.S.C. § 1104(a);
2. The United States Trustee is hereby authorized and directed to immediately appoint a
chapter 11 trustee herein.
Dated: ____________
_____________________________________
Bankruptcy Court Judge
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