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that Newport News and the Hampton Roads Sanitation District were suing the Debtor for unpaid
water, sewer and waste treatment, with the city seeking approximately $154,000.00 and the
district seeking approximately $130,000.00. The July 10, 2023 Report also references a Court
Order wherein Debtor must pay Newport News the amount of $145,000.00 related to the city’s
expenditures to temporarily house the tenants of the Property after they were displaced.
By way of example, but not limitation, pursuant to a local Virginia media report dated
September 5, 2023 (“September 5, 2023 Report”), a fire and power outage forced the Property to
be condemned a second time and forced the tenants to evacuate. The September 5, 2023 Report
also indicates that Newport News had not been reimbursed by the Debtor related to the
temporary housing provided to tenants of the Property with respect to the first condemnation.
C. Debtor’s Default
In or around July 2024, Debtor defaulted under the Loan Documents, defaults include the
following:
(a) Failure to pay the Loan - Starting with the month of July 2024 and each month
thereafter Debtor failed to make the monthly payments of principal and interest due under the
Note, which constitutes a default pursuant to §3.1(a) of the Deed Of Trust;
(b) Material Adverse Change In Financial Condition - Debtor sustained a material
adverse change in its financial condition and the condition of FourLeaf’s collateral, which
constitutes a default pursuant to §3.1(g) of the Deed Of Trust insofar as the Property can no
longer be occupied in its present condition,
Case 25-23251-MEH Doc 18-20 Filed 12/22/25 Entered 12/22/25 20:08:18 Desc
Memorandum of Law Page 6 of 20
ANN public copy | complete ECF 18-20 | combined source PDF 461/478
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