EF Hutton admitted in a court filing that it has defaulted under the terms of its contract with a real estate company and that the company has rightfully accelerated the debt.
The admission filed in a foreclosure lawsuit brought against EF Hutton in Clark County Common Pleas Court is in relation to one of the largest buildings in downtown Springfield -- 1 Main St., now known as EF Hutton Tower. The future of the building remains unclear.
In the filing, EF Hutton also admitted that the real estate company should be allowed to appoint a person to manage the facility and "recover rents and profits relating thereto, sell the properties and apply all net proceeds toward HUTN's default balance."
A phone call to attorney Joseph Oehlers, who filed the court document on behalf of Hutn Inc., was not returned Wednesday. Also, a phone call to Peer Street Funding Inc. attorney David Cliffe was not returned.
The foreclosure lawsuit filed in April by Peer Street Funding Inc. alleges Hutn, Inc., who has owned the building since September 2016, owes PS Funding more than $4.6 million on a mortgage the company took out in 2018.
"Defendant Hutn, Inc., formerly known as EF Hutton America, Inc., has defaulted under the terms of the note as well as the security agreement," the lawsuit states. "There is due to the plaintiff, $4,656,000, plus interest at the rate of 18 percent per year from November 1, 2018...."
EF Hutton Tower is 10-plus stories in the heart of downtown Springfield and commonly known as the former Credit Life Building.
Hutn, Inc. purchased and moved into the building in late 2016. The move came with the promise of more than 400 new jobs and many city and business leaders believed the company would help rejuvenate downtown. However, the company failed to get its footing in a number of industries including trading stocks, social media and cryptocurrency.
The failures led the company to fall into debt the Springfield News-Sun learned about through public record requests. The company owed Clark County more than $67,000 in property taxes overall, including $58,857.76 on EF Hutton Tower. A tax bill obtained by the Springfield News-Sun shows HUTN Inc., will owe more than $85,000 on the tower on July 12.
It also owes SpringForward around $7.5 million on an unsecured note. The two sides said they have been negotiating to settle the debt. SpringForward received the building for free by way of a donation from Jim Lagos and his wife, Nike, and sold the building to EF Hutton with an agreement that EF Hutton would pay them back over a period of years.
EF Hutton suspended operations in April (the brand was revived in 2007). However, the foreclosure lawsuit indicated that satellites for Verizon Wireless, AT&T and others are still in operation at the building and rent from those entities could go to help pay off some of the debt.
