Lawyer Tries To Borrow Money To Play Poker
May 5, 2009
A court this week ruled in favour of a financial lender over its borrower in a case that has been ongoing since October 13th 2005.
The case was due to the borrower, also a lawyer, trying to borrow funds from LLC, a financial service to the value of $250,000 at an interest rate of 18 percent.
The lawyer, Michael J. Melkersen borrowed money through his company that he described as
A serious law firm.
With the loan accepted Melkerson later returned to the firm to ask them to increase the borrowed sum to $500,000 which was then declined with an auditor ordered to review the books of Melkersen’s legal firms books.
With the suggested increase in funding been rejected Melkerson was told that he should look to get signatures of people who would be willing to guarantee the loan on his behalf due to LLC wanting to protect their investment.
Melkerson’s wife agreed to guarantee the loan with her signature and was sent into the LLC offices with the paperwork.
The lenders again refused to accept the loan on this signature and told Melkerson that he would have to find another signature in order to make his application strong enough to even be reviewed.
The borrower turned to a family friend who signed to say that he would also guarantee the loan.
Melkerson was hoping that the doctor’s signature would help to strengthen his application for increased borrowing but again the lender returned the same verdict.
The situation become worse for Melkerson with the auditor concluding is research into the financial spending of the borrower, feeding back to LLC that it was believed that Melkerson had been using the borrowed funds to enter into high stake poker games.
LLC acted quickly on this information, contacting Melkerson to advise that not only are they denying the application for increased borrowing but they are also calling in the current loan due to a breach of contracted terms and conditions.
Melkerson said
Counsel Financial decided not to extend my line or renew it because it believed I was using its money to play poker in violation of my contract.
I was not aware that I could not take personal draws from the Counsel Financial line in a reasonable amount, nor was I aware that there were any restrictions on how I used my partnership draws or otherwise spent my personal funds.
Melkerson addressed the poker playing in question saying
I had been successful in that endeavor for many years, and therefore, my activity in that regard was always done with an expectation of a profit and improving my personal financial situation.
A closer look into the online poker community showed that Melkerson was ranked 3,828th on the World Series of Poker website, showing that his poker playing ability was definately there.
With laws been sketchy to say the least regarding borrowed money funding gambling, the case has taken a considerable amount of time to be concluded, with an increasing amount of case emerging every year.
A law in Navada, USA states that a casino may take a player to court in a bid to reclaim debts aquired by a player but the protection for the player is not the same, with players not legally able to take casinos to court to collect winnings.
With questions been raised about the lending of funds via a loan to fund gambling, many lenders are increasing their paperwork in a bid to deter players from borrowing funding to enter into gambling situations.
The fact that Melkerson had stopped making payments on his borrowings meant that the court sided with the lender, with the borrow now having to find the funding to repay the loan in full.
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