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Kings Court developer asks Benton Harbor Brownfield board to accept "warrant of attorney" as loan security
Summary
Miss King told the Brownfield board she would prefer a warrant of attorney to confess judgment as security for a previously approved $25,000 loan for the Kings Court housing project; the board asked staff to prepare a formal loan agreement and seek attorney review before further action.
At the board's communications item, Teresa summarized follow-up on a previously approved $25,000 loan to the Kings Court housing development and said the applicant asked the authority to consider a warrant of attorney to confess judgment as alternative financial assurance.
Teresa explained the board had earlier approved the loan with five-year repayment terms (annual $5,000 payments plus 1.5% simple interest) and that, after a permit issue was resolved with the city building department, the applicant asked the board to accept the warrant-of-attorney instrument. "Miss King would like the board to consider, and she's here if you have any questions for her, a warrant of attorney to confess judgment," Teresa said.
Miss King told the board that the document "will help to ensure that if default would happen ... it will provide the insurance assurance that the board was requesting for repayment." Board members asked for clarifications about collateral and whether the $25,000 is earmarked to specific parcels; Teresa confirmed the $25,000 supplements earlier board support for the multi-parcel Kings Court project and that the loan agreement will need to specify collateral arrangements.
Teresa and other board members emphasized the need for legal review before approving any instrument that confesses judgment. "I would highly recommend that you have [the lawyer] review," Teresa said, and told the board she would prepare the loan agreement and have the attorney review it; assuming counsel can complete its review in time, the contract will be included for the board's next monthly meeting.
The board did not adopt the loan contract at the meeting; instead it directed staff to draft the document and return with counsel's input for formal action.
