EF Hutton admits it has not paid mortgage on Springfield building

EF Hutton admitted in a court filing that it has defaulted under the terms of its contract with a real estate company and that the company has rightfully accelerated the debt.

The admission filed in a foreclosure lawsuit brought against EF Hutton in Clark County Common Pleas Court is in relation to one of the largest buildings in downtown Springfield — 1 Main St., now known as EF Hutton Tower. The future of the building remains unclear.

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In the filing, EF Hutton also admitted that the real estate company should be allowed to appoint a person to manage the facility and “recover rents and profits relating thereto, sell the properties and apply all net proceeds toward HUTN’s default balance.”

A phone call to attorney Joseph Oehlers, who filed the court document on behalf of Hutn Inc., was not returned Wednesday. Also, a phone call to Peer Street Funding Inc. attorney David Cliffe was not returned.

The foreclosure lawsuit filed in April by Peer Street Funding Inc. alleges Hutn, Inc., who has owned the building since September 2016, owes PS Funding more than $4.6 million on a mortgage the company took out in 2018.

“Defendant Hutn, Inc., formerly known as EF Hutton America, Inc., has defaulted under the terms of the note as well as the security agreement,” the lawsuit states. “There is due to the plaintiff, $4,656,000, plus interest at the rate of 18 percent per year from November 1, 2018….”

EF Hutton Tower is 10-plus stories in the heart of downtown Springfield and commonly known as the former Credit Life Building.

Hutn, Inc. purchased and moved into the building in late 2016. The move came with the promise of more than 400 new jobs and many city and business leaders believed the company would help rejuvenate downtown. However, the company failed to get its footing in a number of industries including trading stocks, social media and cryptocurrency.

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The failures led the company to fall into debt the Springfield News-Sun learned about through public record requests. The company owed Clark County more than $67,000 in property taxes overall, including $58,857.76 on EF Hutton Tower. A tax bill obtained by the Springfield News-Sun shows HUTN Inc., will owe more than $85,000 on the tower on July 12.

It also owes SpringForward around $7.5 million on an unsecured note. The two sides said they have been negotiating to settle the debt. SpringForward received the building for free by way of a donation from Jim Lagos and his wife, Nike, and sold the building to EF Hutton with an agreement that EF Hutton would pay them back over a period of years.

EF Hutton suspended operations in April. However, the foreclosure lawsuit indicated that satellites for Verizon Wireless, AT&T and others are still in operation at the building and rent from those entities could go to help pay off some of the debt.

$4.65 million: mortgage that PS Funding has on Hutn, Inc. building at One Main Street.

$7.5 million: unsecured note Spring Forward holds from Hunt Inc.

$67,000: unpaid taxes to the county by Hutn, Inc.

EF Hutton/Hutn Inc. time in Springfield

Sept. 2016 — EF Hutton America moves to Springfield promising more than 400 jobs over five years.

Nov. 2016 — EF Hutton America launches stock trading website.

Feb. 2017 — EF Hutton America announces expansion into mobile phone industry.

Oct. 2017 — EF Hutton America changes name to HUTN, Inc.

Nov. 2017 — HUTN, Inc. launches Meggalife websites.

Feb. 2018 - HUTN Inc. obtains a $4.65 million mortgage on EF Hutton Tower.

Sept. 2018 - HUTN, Inc. announces that it plans on raising $60 million by issuing cryptocurrencies.

Oct. 2018 — The Springfield News-Sun reports HUTN Inc. is under investigation by the Security and Exchange Commission.

March 2019 - The Springfield News-Sun reports all of the company’s websites are down and that the financial firm is behind on its taxes and water bill.

April 2019 - The company announces it has ceased normal operations and CEO Christopher Daniels has resigned.

Springfield News-Sun:

The Springfield News-Sun has closely tracked the development of HUTN INC. and its subsidiaries since the company first announced its move to downtown Springfield in 2016, including stories examining its possible impact on downtown and its new products.

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