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Borrower and its Principals Learn $1.8M Lesson that Contractual Covenants and Warranties Mean Something

On October 6, 2021, Murray Weiner obtained a $1.8 million arbitration award against a
corporate borrower and its principals on a promissory note, jointly and severally. The corporate
entity and its principals agreed and warranted in the loan documents that the borrowed funds
would only be used for specific identified purposes. The money was not used as agreed and
substantial payments were also improperly made to the principals. As a result, the arbiter found
that, in addition to the corporate entity being liable, the principals who agreed and warranted
compliance with the covenants and warranties in the loan documents regarding use of the
borrowed money, were also personally liable for the debt.

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