SOURCE: PAF Capital

June 25, 2012 18:22 ET

PAF Capital Sues for Fraud

NEW YORK, NY--(Marketwire - Jun 25, 2012) - On June 7, 2012, PAF Capital LLC, filed several claims against Jacob Frydman and WA Route 9, LLC relating to fraud Mr. Frydman is alleged to have committed in connection with the settlement of Mr. Frydman's breach of a personal guaranty of a $12 million loan. PAF Capital also asserted claims against WA Route 9 and its members and managers in connection with WA Route 9's default on its loan with PAF Capital and the members' and managers' default on their guarantees of that loan. 

The lawsuit alleges that Mr. Frydman defaulted on his personal guaranty of a $12 million loan PAF Capital made to McDonald Ave. Acquisition LLC. The suit claims that after defaulting on his guaranty, Mr. Frydman represented to PAF Capital that he could not afford to honor his guaranty and provided PAF Capital with what they now believe are fraudulent financial statements in an effort to get PAF Capital to settle with Mr. Frydman for a significant haircut.

PAF Capital also held a $600,000.00 loan made to WA Route 9A, LLC and Mr. Frydman personally guaranteed that loan. In spite of PAF Capital's repeated extensions of the maturity date of this loan, the suit alleges that in September 2010 WA Route 9 defaulted on that loan and Mr. Frydman defaulted on his guaranty and that to date, PAF Capital has not been paid back any of the money borrowed by WA Route 9A and guaranteed by Mr. Frydman.

PAF Capital's claims against WA Route 9A and Mr. Frydman seek almost $5 million in damages.

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