Here is most of the article, the rest is behind a member wall:
Law360 (February 6, 2023, 3:03 PM EST) -- A real estate company accused two merchant cash advance companies of using a Connecticut legal loophole to freeze its out-of-state bank accounts and collect on unlawful debts in a suit filed Sunday in New York federal court.
North Carolina-based Stellar Beach Rentals LLC claimed that it made a loan agreement with Redstone Advance Inc. in August 2022 due to being desperate for cash. According to Stellar Beach Rentals, Redstone Advance sent $960,000 instead of the $1 million that was promised and told the real estate company that it kept $40,000 for fees.
"Then, plaintiffs were somehow supposed to pay back the sum of [about] $1.36 million by defendant RSA pulling [about] $57,000 out of the plaintiff's bank account every week for 24 weeks," Stellar Beach Rentals alleged. "In other words, defendant RSA was going to receive $360,000 in interest on a $1,000,000 loan (36%) in only six months."
There was also an annual interest rate of 72%, which is three times the legal interest rate of 25% under New York law, Stellar Beach Rentals claimed. The real estate company also claimed that it entered into two other agreements with Redstone Advance in September and December 2022. Both agreements allegedly came with higher, unlawful interest rates along with Redstone Advance not sending all the promised money and taking money out of Stellar Beach Rentals' bank account on a weekly basis.
In January, Stellar Beach Rentals allegedly couldn't keep up with its payments and found out that its bank accounts were frozen. The bank accounts were frozen after Redstone Advance had Connecticut law firm Nair & Levin PC serve banks with a legal order that claimed that Stellar Beach Rentals' bank accounts had a lien of about $1.8 million, the real estate company alleged.
This legal order was allegedly signed by the law firm and Yoel Getter, the owner of New York merchant cash advance company City Capital NY LLC. After finding out about Getter's involvement, Stellar Beach Rentals allegedly contacted Getter, and he told the real estate company that the loaned money was his.
Read more at: https://www.law360.com/articles/1573065/real-estate-co-hits-cash-advance-cos-with-rico-suit?copied=1
Loan or a Merchant Cash Advance will be the question?
Be interesting to see what happens with this