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JP Morgan Chase Bank, N.A. v. Winget

United States District Court, E.D. Michigan, Southern Division

September 11, 2019

JPMORGAN CHASE BANK, N.A., Plaintiff/Counter-Defendant,
v.
LARRY J. WINGET and the LARRY J. WINGET LIVING TRUST, Defendants/Counter-Plaintiffs.

          MEMORANDUM AND ORDER ADOPTING REPORT AND RECOMMENDATION OF SPECIAL MASTER [1] (ECF NO. 906)

          HON. AVERN COHN JUDGE

         I. Introduction

         This is a long suffering commercial dispute. J. P. Morgan Chase (Chase) is the administrative agent for a group of lenders that extended credit to Venture Holdings Company, LLC (Venture) under a credit agreement. In 2008, Chase sued Larry J. Winget (Winget) and the Larry J. Winget Living Trust (Winget Trust) to enforce a Guaranty and two Pledge Agreements entered into by Winget and signed by Winget and the Winget Trust in 2002, guaranteeing the obligations of Venture. After years of litigation and multiple appeals, on July 28, 2015, the Court entered an Amended Judgment in favor of Chase and against Winget and the Winget Trust that enforced the Guaranty and Pledge Agreements against Winget and the Winget Trust. Specifically, the judgment against the Winget Trust was in the amount of $425, 113.115.59. The judgment against against Winget was limited to $50 million. (Doc. 568). Chase began collection efforts which in part resulted in the filing of the following motions:

ECF No. 860 Chase's Motion for Constructive Trust[2]
ECF No. 863 Chase's Motion for Writ of Execution
ECF No. 873 Winget's Motion to Stay

         Because of the complexity of the issues, the Court referred the motions to a Special Master for a report and recommendation (R&R). (ECF No. 890). The Special Master recommends the following:

1. The Court grant Chase's Corporate Stock Motion
2. The Court deny Winget's Stay Motion
3. The Court deny Chase's Constructive Trust Motion, without prejudice to Chase's rights to seek such relief in the Avoidance Action Proceeding (as will be described below).
4. The Court lift the stay of the Avoidance Action Proceeding

See ECF No. 906.

         Before the Court are Winget's objections to the R&R. (ECF No. 908). For the reasons that follow, the objections will be denied and the R&R will be adopted. The Court will enter the relevant orders on each recommendation/motion separately.

         II. Relevant Background

         Chase is the administrative agent for a group of lenders that extended credit to Venture Holdings Company, LLC (“Venture”) under a credit agreement. In 2008, Chase sued Winget and the Winget Trust to enforce a Guaranty and two Pledge Agreements entered into by Winget and signed by Winget and the Winget Trust in 2002, all of which guaranteed the obligations of Venture.

         On January 24, 2014, after years of litigation, this Court entered a Final Judgment against Winget and the Winget Trust in the amount of $425, 113, 115.59, plus attorney fees and costs under Section 17 of the Guaranty (Doc. No. 487). The Court however ruled that Chase's recourse was limited, as to both Winget and the Winget Trust, to $50, 000, 000. Chase appealed that decision to the Court of Appeals for the Sixth Circuit. The Sixth Circuit reversed in part, concluding that Chase's recourse against Winget was limited to $50, 000, 000 while Chase's recourse against the Winget Trust was not limited. The case was remanded to this Court which then entered an Amended Final Judgment against Winget and the Winget Trust in the amount of $425, 113, 115.59, [3] but limited Chase's recourse against Winget to $50, 000, 000, as provided for in the Guaranty. See ECF No. 568. ...


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