TRAVERSE CITY — A local judge who ruled a downstate developer owed more than $2 million on an area shopping center loan is upset by a new state law that erases the debt.
Thirteenth Circuit Judge Philip E. Rodgers ruled David Schostak personally guaranteed a commercial loan for the Cherryland Mall and was liable for $2.4 million owed after the mall went into foreclosure in 2010.
The Michigan Court of Appeals later upheld Rodgers' ruling, but it went out the window after Gov. Rick Snyder last week signed a bill that overturns the decision.
"This looks to me like a piece of personal legislation that is benefiting a specific individual," Rodgers said of the new law.
Schostak, of the Livonia real estate firm Schostak Bros., is the brother of state GOP Chairman Bobby Schostak.
Lawrence McLaughlin, a longtime Schostak Bros. attorney who helped write the law, said it has a "very broad impact" and wasn't specifically intended to benefit Schostak. The bill had widespread legislator and industry support, he said.
"This unquestionably is way bigger than one borrower and one lender," he said.
Schostak shouldn't have been held accountable as a personal guarantor on the loan in the first place, McLaughlin said, and the new law corrects that error.
Rodgers believes his ruling was sound.
"Mr. Schostak stood behind the loan, and when it all didn't work out, he was responsible for the difference," Rodgers said.
Wells Fargo bank, which is owed the $2.4 million, said it would challenge the new law.
The Associated Press contributed to this report.
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Related Photos
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Judge Philip E. Rodgers Record-Eagle file photo/Keith King
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David Schostak
Judge upset by state law erasing debt
New state legislation erased developer's mall loan liability
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