Chicago Sun-Times 09-13-2010 (First Suburban)
1 more legal worry for Vrdolyak
Foreclosure suit targets his family’s law offices
September 13, 2010
By Chris Fusco – Staff Reporter/[email protected]
A bank is foreclosing on two law-office buildings owned by Edward R. Vrdolyak, but lawyers for the former Chicago alderman say it isn’t a case of the man known as “Fast Eddie” being slow in paying up.
The foreclosure case — filed by First Suburban National Bank against Vrdolyak, his wife, Denise, and the Vrdolyak Law Group — involves “a business dispute” with the bank that has nothing to do with Vrdolyak’s personal finances, attorneys for Vrdolyak say.
The Vrdolyak Law Group office at 9618 S. Commercial was put up as collateral for a March 2009 loan, according to court and loan documents. A bank is now foreclosing on this office and another office building owned by former Ald. Edward R. Vrdolyak (Rich Hein/Jean Lachat/Sun-Times)
Still, it’s one more legal worry for Vrdolyak, the former 10th Ward alderman who’s scheduled to be re-sentenced in federal court next month for his role in a real estate scheme to which he pleaded guilty in 2008.
Earlier this year, a federal appeals court overturned Vrdolyak’s original sentence, which spared him prison time, instead giving him five years of probation and a $50,000 fine and ordering him to perform 2,500 hours of community service. His next sentencing is set for Oct. 15. Prosecutors have recommended a prison sentence of 3½ years.
Vrdolyak, 72, no longer can practice law in Illinois because of his criminal conviction, but his sons Peter, John and Edward are carrying on the family’s legal practice.
The foreclosure case involving the family law offices stems from a $750,000 loan that the former alderman obtained from First Suburban on Dec. 26, 2002. It was supposed to be a one-year loan, according to court records and interviews, but turned into a multi-year deal, being renewed and renegotiated several times, with the most recent renewal in March 2009.
Vrdolyak put up the Vrdolyak Law Group office buildings at 9618 S. Commercial and 741 N. Dearborn as collateral for the March 2009 loan, which was due to be repaid on Sept. 29, 2009, but wasn’t, according to loan and court documents.
Earlier this year, on April 19, the bank foreclosed on both buildings. As of June 30, the bank said in a court filing that Vrdolyak still owed a total of $770,863.
John Vrdolyak says the loan from which the foreclosure case stems is tied to a complex federal court case involving former Chrysler/Dodge auto dealer Gerald W. Gorman, the husband of Cook County Commissioner Elizabeth Doody Gorman (R-Orland Park).
It seems that Edward Vrdolyak lent or invested the $750,000 he got from First Suburban back in 2002 with Gorman, who “long had extensive business dealings” with Vrdolyak, according to court documents filed by lawyers for automaker DaimlerChrysler. The case ended with DaimlerChrysler securing a still-unpaid $4.2 million judgment against both Gerald and Elizabeth Gorman, who is seeking re-election to the Cook County Board on the Nov. 2 ballot.
Though Edward Vrdolyak was a key figure in the Gorman-DaimlerChrysler court case, he wasn’t held responsible for any damages.
In an interview, John Vrdolyak didn’t want to go into details about the 2002 loan, saying, “There’s actually going to be another lawsuit on file shortly. … We’re probably not going to be able to comment on anything until we get this other lawsuit on file.”
Asked whether he thinks First Suburban will end up being allowed to seize the two Vrdolyak Law Group offices, John Vrdolyak says, “I don’t think that will happen.”
Elizabeth Gorman says she was unaware of the Vrdolyak foreclosure case. Any questions about the $4.2 million judgment should go to her husband, she says.
Gerald Gorman says his wife had nothing to do with the day-to-day operations of his dealerships and was dragged into the case “by being my wife.”
Gerald Gorman filed for bankruptcy last month, raising questions about whether DaimlerChrysler will be able to collect any portion of the judgment.
Lawyers for DaimlerChrysler either did not return telephone messages or declined to comment.
Meanwhile, Edward Vrdolyak has gone on the offensive against First Suburban. He has filed his own lawsuit, in which he accuses the bank of having miscalculated his interest payments on the 2002 loan and its subsequent renewals. As with the foreclosure case, his suit is pending in Cook County Circuit Court.
