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A prominent Chicago real estate lawyer is being sued by a creditor that says he fraudulently shielded assets to dodge personal guarantees for more than $21 million in loans.
Glenn L. Udell, and his wife, Pamela Udell, both are named in a lawsuit PNC Bank filed May 19 in federal court in Chicago. It alleges the couple conspired to transfer assets to an “alter ego” limited liability company, Sorrento Enterprises, and asks the court to grant a judgment for $5.3 million against the corporate entity.
Michael Pomerantz, a partner at the same law firm as Udell, said that while he had only seen the complaint a few hours ago, “my initial inclination is this is absolute nonsense.”
A name partner at Brown, Udell, Pomerantz & Delrahim, Glenn Udell has a client list that has included the seller of a site near Wrigley Field destined for residential and retail development and Chicago landlord Arthur Holmer.
According to the lawsuit, Udell personally guaranteed $21.3 million in loans borrowed between June 2007 and April 2008 from three banks, many for real estate projects. When the real estate market collapsed, Glenn and Pamela Udell formed Sorrento Enterprises LLC and a series of affiliates “to place their assets outside the reach of Glenn’s creditors.”
They began transferring assets to the corporate entities in May 2008 and continued through July 2015. The transfers included real estate, cash, memberships in limited liability companies and other personal property, the lawsuit says.
Glenn Udell does not have a personal bank account, and the $400,000 in compensation from his law firm is deposited into accounts owned by Sorrento, the lawsuit says. The couple pays their personal credit cards, insurance, mortgage on their Highland Park home and car payment from the Sorrento accounts. Their cars, a 2015 Mercedes S550 and a 2011 Volkswagen Touareg Hybrid, are leased or owned by Sorrento and its affiliates. Their vacation home in Galena is owned by a land trust benefiting the corporate entities.
The actions described in the complaint all fall within “the realm of normal reasonable prudent estate planning,” Pomerantz said.
Yet Neal Levin, the head of the fraud and internal investigations group at Chicago law firm Freeborn & Peters, said Udell’s alleged actions sounded “pretty brazen.” Creditors “always hope for that kind of ammunition going into this kind of a battle.”
“Some guys are better at concealing assets than others,” he said. “Those set of facts are pretty damning.”
PNC already has a judgment against Glenn Udell personally for the $5.3 million it loaned, obtained after a five-year court fight “as a result of (Udell’s) efforts to stall the litigation,” the lawsuit says.
Article available at ChicagoBusiness.com