Jackson Jambalaya

A Northeast Jackson eyesore continues to fester while two "scumlords" slug it out in Madison County Circuit Court. 

Old Canton Road property. Photo taken last week.

The home pictured above at 5114 Old Canton Road has been the site of shootouts, bad tenants, and good ole-fashioned neglect.  The property is not maintained while lacking tenants but for a few weeks.  The owner lives in Belgium.  However, Terramark Management, LLC is the property manager.  Unfortunately for the neighborhood, there is a court fight over who controls the assets of Terramark.  

Reunion resident George "Trey" Guerieri, III owned several companies under the Terramark brand: Terramark Management, Terramark Holdings, Terramark Investments, and Terramark Corporation. He also owned Magnolia Repairs, LLC.  Terramark Mangement managed rental properties for property owners.  Guerieri sold Terramark Management and Magnolia Repairs to Garon Weathers and Taylor Wallace of Brookhaven in December 2022. The buyers were apparently short of cash because Guerieri financed part of the transaction.  Problems almost immediately began after closing.  

Weathers and Wallace sued Guerieri and two of his companies, Terramark Holdings and Terramark Corporation in Hinds County Circuit Court on May 23, 2023.  However, the case was transferred to Madison County Circuit Court. 

The complaint states the transfer agreement required Guerieri to disclose the debts of the companies he sold to the plaintiffs.  However, the plaintiffs accused Guerieri of hiding the following "debts and obligations": 

* $100,000 in security deposits owed to tenants not kept in escrow

* $45,000 in property reserves owed to clients not kept in escrow. 

* $50,000 owed to contractors, vendors, and Guerieri's other companies. 

* $30,000 in unpaid state and federal taxes for 2021. 

* Unsettled HUD discrimination complaint.  The complaint allegedly resulted in a settlement for the tenant after the transfer took place. 

* Lease agreements

* More amounts to be determined "in litigation."  

The complaint claims Guerieri was supposed to relinquish control of Terramark Management and Magnolia Repairs to the plaintiffs.  The transfer was supposed to include control of company property, credit lines, and various accounts.  However, the loan agreement allowed Guerieri to take over the business and assets if default occurred. 

Such an event apparently took place because Guerieri  notified Weathers and Wallace on March 17, 2023 they were in default on the loan. The complaint charges Guerieri took over $100,000 out of the plaintiff's accounts and "altered the internal bookkeeping documentation of Terramark and Magnolia Repairs. 

The complaint charges the defendants with breach of fiduciary duty since they did not establish an escrow or trust account for the funds to be transferred at the time of sale. Guerieri stands accused of co-mingling security deposits and property reserves while failing to place such deposits in escrow.  The complaint threw a whole slew of charges at the defendants.*

The plaintiffs ask Judge Mills to issue an injunction against Guerieri and pierceTerramark's corporate veil.  

Attorneys Garrison White and Robert Moak represent the plaintiffs. 

 

 Guerieri fired back with a lawsuit of his own.  His counterclaim minced no words in shredding Weathers and Wallace: 

 After buying two business from Geroge Guerieri, III (“Trey”) in December 2022, Garon Weathers and Taylor Wallace ran them into the ground in a manner of weeks. They unnecessarily incurred long-term debt, failed to properly handle client funds, ignored obligations that they voluntarily undertook to assume as part of the purchase price, and effectively abandoned many of the day-to-day functions of the companies. This left the companies, Weathers, and Wallace unwilling (or unable) to make lease payments or promissory note payments to Trey and his real estate holding company. Weathers even converted funds from Trey’s holding company to pay off his business’s clients.

Instead of trying to cure their defaults, pay their debts, and salvage the reputations of their businesses, Weathers and Wallace filed this lawsuit as a way of jumping ship and shifting blame. But the law does not allow do-overs. Weathers and Wallace are full-grown adults, and they signed on the dotted line. They knew about the businesses’ obligations and their personal guaranties.

Guerieri claims he is unable to occupy a property because the plaintiffs did not complete a build-out for a property at 1 Woodgreen Place in Madison.   He was forced to pay for work to finish what Magnolia Repairs agreed to do. Guerieri accuses the plaintiffs of their own misdeeds: 

24.   Additionally, on May 5, 2023, Weathers wrongfully and fraudulently made a payment from the bank account of the Holding Company—owned by Trey— to pay $5,271.36 to a client of the Management Company—owned by Weathers and Wallace. Weathers improperly gained access to the Holding Company’s bank account through bank account information in the property management software maintained by the Management Company.

25.   Weathers  has  also  spread  false  information  to  clients  of  the Management Company to avoid responsibility for his actions. Upon information and belief, under Weathers’ and Wallace’s gross mismanagement, the Management Company has become unable to meet financial obligations to clients, obligations that Weathers and Wallace knew about and voluntarily assumed before the purchase.

Ouch! The counterclaim states Guerieri sold the two companies to Wallace and Weathers for $902,137 and a loan origination fee of $10,230.  The plaintiffs paid $55,900 cash and assumed resopnsbility for the companies debts.  They gave a $420,455 promissory note to Guerieri with an interest rate of 11.5%.  The term was 62 payments of $9,026 per month.  The plaintiffs missed the first payment and paid only half the note a few weeks later.  Guerieri declared they were in default in March and accelerated the loan.  They also defaulted on the two leases ($4,500 combined per month). 

 Leases? Oh yes, the leases.  The alleged shenanigans did not end with Guerieri's alleged draining of the plaintiffs' accounts. Guerieri allegedly created two lease agreements between Terramark Holdings and Terramark Management and Magnolia Repair before the December sale took place.  The defendant demanded payment of $24,455 in late rent under the two lease agreements. The complaint disputes the debt but says at worst, Weathers and Wallace owe $16,406.  Unfortunately for the plaintiffs, Guerieri demanded payment of the leases before any funds would be applied to the defaulted loan. (Are you still following all this?) 

Guerieri fired his own barrage of tort claims** at Weathers and Wallace while asking the Court to award damages of $764,010, Attorney fees, interest at 11.5%, damages for defamation, and punitive damages.  The holding company demands another $189,474 for lease payments. 

Attorney Grafton E. Bragg (Please get elected to something.  We deserve to have a politician named "Graft.")  represents Guerieri and his companies.  

* The plaintiffs further charge Guerieri with fraudulent inducement and negligent misrepresentation for the transfer agreement and loan agreement,  conversion, undue influence/duress, embezzlement/ misappropriation, tortious breach of contract, breach of contract, intentional breach of duty of good faith, gross negligence, intentional infliction of emotional distress, detrimental reliance, equitable estoppel, unjust enrichment, and constructive trust.  (No sense in cluttering up the post with all this mess about some mess.)  

** The defendants charge Weathers and Wallace with breach of promissory note, breach of lease agreements,  breach of obligation to complete build-out, interference with build-out and occupation of leased property, breach of purchase agreement, and two counts of conversion.  

Kingfish note: The home was the site of three shootouts in one day two years ago. Earlier post. Bryan and Lucille Campbell owned the home and the adjacent one until they passed away in their old age in 2006.  Their son inherited the two properties and sold them.  Rene Verhoeven bought them in 2017 and retained Terramark to manage them.  The property has sat vacant but for a few weeks since the 2021 shootout. 

Someone apparently tried to cut the grass Saturday but did a half-ass job.  (This is an attempt to highlight the sentence so someone can't claim it was not reported.)  

 

It would not be surprising to learn maintenance funds for properties such as this one and other Terramark properties are tied up in this court fight.