No. 2009AP2721
3
George Schonath, InvestorsBank’s president,
1
told BV/B1 that InvestorsBank was
willing to provide BV/B1 with a $4.85 million loan, with a term of ten years, at a
fixed interest rate of 6.75%, with no personal guaranties. In lieu of personal
guaranties, however, InvestorsBank required a prepayment penalty if the loan was
paid before maturity.
¶5 Schonath personally drafted a unique prepayment penalty provision
for its loan with BV/B1 that had not previously been utilized by InvestorsBank.
InvestorsBank’s standard prepayment penalty provision at that time provided for a
prepayment penalty of ninety days interest on the outstanding principal balance of
the loan on the date of repayment, if the loan was refinanced with another
financial institution. The term loan given to BV/B1, however, was unique in many
respects, including: (1) it locked in an interest rate for ten years, which is unusual
in commercial real estate; (2) it provided an interest rate below the market rate;
and (3) it required no personal guarantees, which was highly unusual in
commercial real estate and which poses substantial risk for the lender.
1
Although Schonath drafted the contract clause at issue and appears to be the
representative from InvestorsBank who primarily negotiated the terms of the contract with
BV/B1, he did not testify at the summary judgment hearing and was not deposed, because,
unfortunately, he passed away prior to discovery. Multiple witnesses testified both in depositions
and at the summary judgment hearing regarding their transactions and communications with
Schonath. However, because BV/B1 does not challenge that evidence on appeal, we do not
address its admissibility under the dead man’s statute. See WIS STAT. § 885.16 (2007-08); see
also Bell v. Neugart, 2002 WI App 180, ¶17, 256 Wis. 2d 969, 650 N.W.2d 52 (stating that
“[a]lthough the wording of the [dead man’s] statute [§ 885.16] is cumbersome, the core meaning
is that it disqualifies a witness to a transaction or communication with a decedent from testifying
about that transaction or communication in his or her favor, or in the favor of any party to the
case claiming under the witness”).
All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise
noted.