Oliphant

FACTS

In 2003, Oliphant, Matzner and an additional investor2 formed Tuscany for the purpose of developing eight acres of real estate in Palm Springs. They executed an operating agreement accordingly. In 2007, Tuscany borrowed $10.3 million from Vineyard Bank (Vineyard) to construct the lots and build three model homes, which were completed the same year. Both Oliphant and Matzner personally guaranteed the loan. The loan was due by April 2008. Tuscany defaulted on the loan, and in August and September 2008, respectively, Vineyard filed complaints to foreclose on the property and to collect from Oliphant and Matzner on their guaranties. After those lawsuits were filed, Oliphant and Matzner negotiated with Vineyard to extend the loan in exchange for a partial payment and additional collateral. Negotiations continued for some time, and documents were prepared. The extension was not executed, however, because Oliphant and Matzner began negotiating with Suresh Shah, an acquaintance of Oliphant’s, toward late 2008. Shah was interested in purchasing an office building Vineyard owned, and Oliphant suggested the best way to get the bank’s attention was to make an offer on a package of…