Editor's note: This article has been updated to reflect the dismissal of the action referenced herein.
A Glenview-based developer's lawsuit against PNC Bank - in which he claimed the bank didn’t play fair, costing him millions of dollars, forcing him into bankruptcy and causing the loss of a property slated for condominiums on Chicago's North Side - has been dismissed.
On July 16, 2015, a Chicago federal judge granted PNC's request to toss the action brought by George Bahramis.
The judge said Bahramis had no cause of action against National City Bank, from which Bahramis had borrowed $22 million, and therefore had no ability to sue PNC, which later acquired National City.
Bahramis had filed suit March 25, 2015, in Cook County Circuit Court against PNC Bank, saying the bank breached its contract, breached its duty of good faith, enjoyed unjust enrichment, violated the Illinois Fairness in Lending Act and violated federal law by discriminating against certain borrowers.
In May 2015, the case was transferred to U.S. District Court in Chicago, as the suit involved citizens of different states – PNC Bank is based in Delaware – and because the suit invoked federal law.
The suit stemmed from August 2007, when National City Bank agreed to loan $22 million to Bahramis’ company, Belmont & Hudson LLC. Bahramis executed a promissory note for $5.3 million.
The loan was for the development of a condominium building at 3177 N. Hudson Ave., near West Belmont Avenue and Lake Shore Drive in Chicago’s Lakeview East neighborhood. Bahramis said National City dispersed only a quarter of the loan, before the financially troubled bank was bought by PNC Bank in October 2008.
PNC called the $5.3 million note due shortly after.
In calling the note, PNC said there was a “material adverse change,” in that as part of the loan agreement, Bahramis was to pre-lease 22 condominium units within one year, but had only pre-leased 17 units. Bahramis said PNC was trying to dump “toxic” loans it had assumed from National City, in fear those loans would poison PNC as they had National City. PNC wished to maximize profit on these loans by forcing allegedly delinquent borrowers, who were otherwise in “substantial compliance” with their loan terms, into foreclosure, according to Bahramis.
Bahramis said PNC had classified his loan similarly.
Bahramis said he had relied on the lender’s promises and proceeded with his condominium development, also sinking about $1.5 million of his own money into what turned into a doomed project.
As a result of PNC’s treatment of his loan, Bahramis said the property in question was foreclosed upon in February 2010 and sold for $4.1 million, although it had been appraised at $8 million. Further, a judgment of about $4 million was entered against Bahramis, causing him to lose more than $3 million in equity and forcing him to file Chapter 7 bankruptcy. The bankruptcy was discharged in July 2013.
Bahramis said he was “financially devastated” by PNC's failure to honor the remainder of the loan and by the resulting foreclosure.
PNC Bank was represented by Crowley & Lamb, of Chicago.
Peoples Advocate Group, of Forest Park, represented Bahramis.