Torn from today’s high-society headlines, the Battle of Glenview continues between real estate mogul John Lenihan and former RecoverCare CEO Mark Bidner.
In this third round of mansion machinations, Bidner has won a major reprieve from the Master Commissioner at the Jefferson Circuit Court’s foreclosure section.
Foreclosure court officials ruled Lenihan cannot force the $4.4 million mansion at 4008 Glenview Ave. to be sold at the court foreclosure auctions, a ruling confirmed by Bidner’s attorneys at the Louisville-based law firm Goldberg Simpson.
That ruling was upheld by Jefferson Circuit Court, which sent the case to the Master Commissioner to parse the finer points of real estate law.
And indeed they did.
Master Commissioner officials ruled in favor of Bindner citing a legal technicality from the 1980s savings and loan scandal, sending it back to Jefferson Circuit Court.
The Garn–St. Germain Depository Institution Act of 1982 states, in essence, a property purchaser can place a home in a trust to keep the seller from exercising a due-on-sale clause, forcing out the purchaser.
Which is what Lenihan was trying to do.
The dispute started in late 2011 after Bidner purchased a $4.4 million Glenview mansion from Lenihan for cash up front, plus a $2.24 million promissory note that matures next March.
At the time, the sale represented one of largest residential real estate transactions in Louisville history.
The terms of the promissory note included a stipulation forbidding Bidner from encumbering the mortgage – that is, borrowing against the mansion and its 5.6-acre-acre parcel in Louisville’s most exclusive area.
But Bidner did, taking out $2.5 million second mortgage on September 23, 2011, about seven months after he purchased the estate. Lenihan sued last February, contending Bidner’s second mortgage is a technical default and a violation of the terms of the promissory note.
A ruling in his favor would have given Lenihan the right to demand Bidner pay the note in full or vacate the property.
(It’s important to note that as of this summer, Bidner was not in de juris default, having made the monthly interest payments on the note.)
The dispute really got heated in March, with Bidner claiming Lenihan was trying to reclaim the estate because he was desperate for cash.
However, Bidner’s multiple legal complications all converged in the courts.
Lenihan attorney Eric Ison at Bingham Greenebaum Doll said after a September hearing with Master Commissioner officials, those officials ruled in favor of Bidner, sending the case back to Judge Susan Gibson in Jefferson Circuit Court.
Ison filed objections, but isn’t certain if Gibson considered his arguments.
(Gibson’s staff refused Insider Louisville access to the amended court documents, which we obtained from other sources.)
After Gibson ruled September 28 the case be terminated, Ison filed a motion to alter, amend or vacate Gibson’s ruling.
Whatever happens, Bidner still must make good on the final $2.24 million promissory note, due in March.
What was never clear was how two high-profile businessmen ended up in such a public dispute. Lenihan owns the Sotheby’s International Realty franchise for Louisville and handles some of the town’s premium properties.
Both Lenihan and Bidner are regulars in The Voice-Tribune social newspaper, dedicated to Louisville’s blue-blood fundraisers and parties such as the Speed Ball.
The dispute with Lenihan came about seven months after Bidner left the CEO position at RecoverCare.
RecoverCare, which sells special hospital beds and other equipment used to treat obese people and high-risk patients, is owned by the mortgagee in the suit, Wound Co., which consists of Bidner and other investors.
In 2009, Bidner and his investors rolled up Louisville-based MedaSTAT into RecoverCare, which had been based in Radnor, Pa. outside Philadelphia. A the time, Bidner was the CEO of Hollywood Capital Inc., based in Los Angeles.