The founder and CEO of a shuttered reverse lender has asked a federal court to dismiss a lawsuit filed against him by a creditor seeking $82 million.
Michael C. Hild, founder and CEO of Live Well Financial, is being sued by Michigan-based Flagstar Bank, which claims that Hild and Live Well owe it more than $82 million in principal, interest and expenses on two loans. Hild claims he doesn’t owe the money because one of the loans was repaid in full and he did not guarantee payment on the other, according to a report by The Richmond Times-Dispatch.
“Hild affirmatively states that he owes no amounts to Flagstar,” Hild’s legal team said in a court filing.
Flagstar filed a lawsuit last month claiming that Hild owed the money because he was the guarantor of the loans. One was a commercial loan totaling $69.17 million. The other was a warehouse loan totaling $13.279 million.
Hild claimed that the warehouse loan was paid in full June 10 – the same date that Flagstar and two other creditors filed an involuntary Chapter 7 bankruptcy petition against Live Well, the Times-Dispatch reported. Hild admitted guaranteeing the warehouse loan, but claimed that he did not owe repayment on the other loan because he did not guarantee it.
“Live Well representatives and its agents told Hild that Flagstar was not requiring a personal guaranty in connection with the opening of the bond-secured credit loan agreement and/or bond-secured credit facility note,” the court filing said. “Hild relied upon that representation. Hild affirmatively states that the guaranty does not, and was never meant to, guarantee the amounts due under the bond-secured credit loan agreement and/or secured credit facility note.”
Virginia-based Live Well Financial was one of the country’s top reverse lenders before it abruptly ceased operations May 3. The company gave almost no explanation for the closure, merely citing “unexpected circumstances.” Live Well laid off more than 100 employees – including Hild.
Flagstar, along with creditors Mirae Asset Securities and Industrial and Commercial Bank of China Commercial Services, filed an involuntary bankruptcy petition against Live Well to try to recoup the money owed them. The lender is also reportedly under federal investigation. Each of the creditors has reported that they were approached by the FBI, the Securities and Exchange Commission, or both regarding Live Well.