Noted real estate investor Tony Thompson's legal and financial problems continue to mount as he and his company, Thompson National Properties LLC, were sued in federal court in Colorado on Jan. 23 over the failure to make payments on a notes program that is in default.
The suit marks the second time since last September that Mr. Thompson has been sued over the notes, which Thompson National Properties sold in 2008 and 2009 to fund the company, raising $21.5 million from 400 investors.
Darrell and Diane Elliott, investors in the TNP 12% Notes Program LLC, claim that TNP “has failed to make required interest payments on the note,” according to the complaint. They purchased a note of $100,000 in 2008. “Thompson National has failed to fulfill its obligation under the guarantee,” according to the complaint. TNP was obligated to repay the principal by 2011 but missed that deadline. It then stopped making interest payments in 2012 but has indicated that it intends to pay the remaining interest and principal by June.
In an attachment to the lawsuit, a guarantee signed by Mr. Thompson states that Thompson National Properties “hereby unconditionally guarantees the performance of all the company's obligations under the notes, including, without limitation, the payment of principal and interest.”
The lawsuit was filed in U.S. District Court for the District of Colorado. In September, other investors filed a similar suit over missed payments in the notes program.
Thompson National Properties recently has been juggling a number of financing issues in its notes program and its nontraded real estate investment trust, the TNP Strategic Retail Trust Inc. In filings this month with the Securities and Exchange Commission, the REIT said it was in danger of defaulting on two loans.
In e-mail messages to InvestmentNews, Mr. Thompson downplayed any financial difficulties at his various companies.
When asked Friday to comment about growing financial problems at Thompson National Properties, Mr. Thompson wrote: “You are wrong.”
The note defaults were due to “timing and in process of cure,” Mr. Thompson wrote. In another e-mail, Mr. Thompson wrote that TNP made payments to note holders Jan. 21.