David Schostak Of Schostak Bros. & Co. Wins Key Court Ruling Against Wells Fargo Bank

DavidSchostakWPCo-CEO David Schostak of Livonia-based Schostak Bros. & Co. is not personally responsible for the balance on a defaulted loan in a commercial real estate dispute near Traverse City, the Michigan Court of Appeals has found, citing a law passed last year to protect investors’ assets.

The court in a written ruling found that a guaranty Schostak had placed on the original $8.7 million commercial mortgage-backed security with Cherryland Center outside Traverse City was “invalid and unenforceable” under the Nonrecourse Mortgage Loan Act of 2012.

A new state law cleared the Legislature in just three weeks last March, with support from Robert Schostak, chairman of the Michigan Republican Party and David’s brother, after the appeals court had ruled in December 2011 that lenders could pursue a $2.1 million balance under a loan guaranty.

Read more at Crain’s Detroit News GOP chairman’s brother wins key court ruling | Crain’s Detroit Business.

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