by David Tulis/NoogaRadio Network, tntrafficticket.us
(Oct. 7, 2023) — CHATTANOOGA, Tenn., Saturday, Oct. 7, 2023 — A loan to my investigative news radio station in Chattanooga turns out a bad investment in 2020 when an illegal state of emergency collapses the economy in Tennessee and effectively puts me out of business.
A high interest loan — dressed as an advance purchase of future receivables or a merchant cash advance — had just hit the bank account of Hot News Talk Radio LLC (no longer in existence) when Gov. Bill Lee effectively declared martial law and imprisoned the people in their houses. Flexibility Capital sued the “personal guarantors” of their loan — my business partner and me.
The case Flexibility Capital Inc. v. Sabatino Cupelli et al, E2023-00335-COA-R3-CV, is in the court of appeals in Knoxville. The clerk got a filing from me Friday night at 10:06.
Oral arguments are set Oct. 31, 2023, and are set to be live on YouTube.
We discover in fighting back that the transaction is not legal in Tennessee because it violates the Tennessee usury law, and is not an authentic advance purchase of future receivables. It is a fraudulent loan because its 14-page contract absolutely requires repayment. A genuine cash advance on future receivables is a much more complex arrangement and implies lender risk. The funder becomes effectively a short-term partner, bearing risk.
Many business owners in the Chattanooga area have dealt with such funders. Their come-ons in the mail and by phone are common to everyone in business.
And the profits are high.
208.05 % rate of interest
The rate of interest is so high because the loans are guaranteed by the principals in the business personally, and not by assigning collateral such as houses, cars or property. The loans are extended, minus hefty fees, and arrangements are quickly made — in days or hours. No such case has been decided in state courts. I am demanding a ruling clarifying that business lenders in Tennessee cannot operate in Tennessee if they extend fraudulent and deceptive contracts that are unenforceable in court.
My brief in the court of appeals describes the situation in which you may find yourself. Key points about your situation:
➤ The 14-page lending agreement shows risk-sharing on the first 10 pages
➤ A personal guarantee, pp. 11-14, overwrites the prior pages
➤ The agreement is a loan, absolutely repayable and not a genuine advance purchase of your future cash flow
➤ The loan at the 200-plus percentage rate may violate your state’s lending or usury law
➤ A key case giving advice on how to discern whether you are a loan-shark victim in a fraudulent, illegal contact is the U.S. bankruptcy case involving CapCall and the Shoot the Moon restaurant chain
Read the rest here.
Mr. Tulis,
I’ve been following your case with interest and wish you well. You mentioned your hearing would be 10/31. I looked on TN Court of Appeals’ YouTube at https://www.youtube.com/@TNCourts/streams but didn’t see any YouTube stream.
Looked at the court docket with the case number you posted at https://pch.tncourts.gov/CaseDetails.aspx?id=86494&Number=True but the last entry is
10/11/2023 Docket Activity-Docketed (Oral Argument)
Did you win on 10/11? It says Oral Argument so hoping for an update. I’ve read all your posts and the big PDF files, it’s a really interesting case about the huge interest rate. Please let us know where to find the livestream, maybe I looked in the wrong place.
Godspeed.