Liang

Discussion, post. To avoid confusion, we shall refer to these two individuals by their full names.

2 project. Based on Li’s written representations, Liang believed that Li had already invested $1.3 million in the project and would invest an initial $3.53 million, which, combined with Liang’s investment, would be sufficient to consummate the purchase of the 6140 Property. In derogation of the investors’ agreement, Li failed to contribute his funds, proceeded to use Liang’s contributed capital of $5.48 million to place substantial non- refundable deposits on the 6140 Property and ultimately obtained a $4 million loan in Hollywood Garden’s name (secured by the 6140 Property) in order to finance the purchase. The loan had a term of only one year, with an option to extend for a second year. Li also caused Hollywood Garden to expend substantial sums paying fees and points associated with the loan, interest on the loan, and later to extend the term of the loan to two years. In addition, Li withdrew money from Hollywood Garden’s account for his own purposes. As a result, Hollywood Garden’s finances were depleted and its only substantial asset was the 6140 Property, burdened by a…