In another blow to the beleaguered owners of the Hilldale Shopping Center, the UW Foundation, which built and developed Hilldale, on Thursday sued a group that bought the Foundation's stock in the shopping center for allegedly failing to make interest payments on two promissory notes.
The Foundation also charged that Larry Freed, president of Chicago-based Hilldale owner Joseph Freed and Associates, committed fraud by forging the signature of his sister on the stock purchase agreement and two promissory notes.
According to the lawsuit, the Foundation is demanding immediate payment of $5.5 million plus interest and late fees because it alleges that Hilldale Land Company, Freed and FH Stock Holdings, along with nine individual guarantors, breached their contract by failing to make the interest payments since March.
The Foundation's lawsuit comes on the heels of a foreclosure action filed in February against Joseph Freed and Associates by Trisail Funding Corp., a Bank of America subsidiary, which involves a $12.6 million loan to the developer.
Default on the Trisail loan was also given as a reason in the lawsuit for demanding the immediate payment of the promissory notes.
Officials from Freed and Associates could not be reached for comment late Thursday. UW Foundation CEO Andrew Wilcox referred a call to attorney H. Dale Peterson, who said he would not comment beyond what is written in the lawsuit.
The promissory notes, totaling $6 million, were issued in 2004 in exchange for the Foundation's stock in Hilldale.
But one of the nine guarantors claims that her signature was forged on the notes. Debra Ruderman, who is Freed's sister, claimed that she never signed the notes, according to a May 17 letter to Peterson from her attorney, Marc Beem.
"The signatures on those documents that purport to be hers are not hers and she did not authorize anyone to execute those documents on her behalf," Beem wrote.
In response, Larry Freed's attorney, James Carey, wrote to Peterson two days later that Ruderman's assertion was false and she had authorized her brother to sign the documents on her behalf.
In its lawsuit, the Foundation charges Freed with theft by fraud, civil conspiracy and intentional misrepresentation for allegedly failing to tell the Foundation that Ruderman's signature was not genuine. It also alleged that the signature was a ruse to induce the Foundation into the stock purchase agreement.
The Foundation claims that it is entitled to recover triple damages from Freed and any other defendant who was aware of the alleged fraud.