An Illinois judge ruled in favor of the Kennedy family in its legal battle against Metropolitan Life Insurance Co. on Oct. 30. The Kennedy family contended that Met Life had acted in bad faith by demanding a penalty for the prepayment of a $250 million mortgage, which was paid off when the family sold the 3.7 million-square-foot Merchandise Mart and most of its other real estate holdings to Vornado Realty Trust for $625 million.
At the time Merchandise Mart was sold to Vornado Realty Trust, it was owned by the Kennedy-owned investment company, Merchandise Mart Owners. Citing a “yield maintenance provision” in the 1987 loan agreement, Met Life requested payment totaling $47.5 million.
The Kennedys, however, maintained that they did not owe anything to the insurer. Cook County Circuit Judge Ellis Reid ruled that Met Life’s conduct had failed “all three of the alternative standards for good faith.”
The judge also ordered Met Life to post a $20 million appeal bond. Merchandise Mart was purchased by Joseph P. Kennedy in 1945. Christopher Kennedy, son of the late Robert F. Kennedy, still manages Merchandise Mart as president.
Topics Illinois
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